When opening an account with Kernel, in addition to an IRD number, you will need to provide three pieces of tax information. These are as follows:
1. Prescribed Investor Rate (PIR)
Your prescribed investor rate (PIR) is the rate used to calculate how much tax you'll pay on your portfolio investment entity (PIE) taxable income.
In order for us to ensure you pay the right amount of tax at the end of the financial year (April), we need to have your correct tax details at all times.
The default PIR is 28% unless you have selected a lower rate. To read more on calculating your PIR, check out our FAQ.
2. Resident Withholding Tax (RWT) rate
Your Resident Withholding Tax (RWT) is the tax rate at which interest earned on savings is deducted, the same as for any bank interest or dividend on direct investments are taxed.
Your RWT rate is chosen by you and based on your estimate of your total income in the current financial year (1 April to 31 March).
For this reason, it’s important to choose an RWT rate that is reflective of your total income – wages, dividends from shares, interest from a bank account etc. Noting that it’s only on the income you’ve received.
Read more and find your RWT rate in our FAQ.
3. Tax residency information
New Zealand is part of a global initiative called the Automatic Exchange of Information (AEOI), which is aimed at preventing offshore tax evasion.
Kernel is legally required to collect, report, and exchange foreign tax and financial information about your account to the IRD.
When opening an account you will be required to confirm if you are a tax resident of any other country and provide the relevant tax identification number(s). You must advise us of any changes in your eligibility or tax status.
We are required by New Zealand law to pass on the tax information you supply, in addition to financial information about your account, to the IRD if you are a foreign tax resident. The IRD may share this information with your home country or jurisdiction if New Zealand has an AEOI exchange relationship with them.
You can find out more information about and the Common Reporting Standard (CRS) and AEOI on the IRD website.
If you have any questions on tax please email our team at support@kernelwealth.co.nz.