We make things easy by paying tax on the income you earn from an investment for you. This income is commonly called a dividend.

You don’t pay tax on things like withdrawing money from your Sharesies Wallet into your bank account.

New Zealand has tax treaty agreements with Australia and the US to avoid taxing you twice on the same investment.

Tax on NZ shares income

Tax on company dividends

You pay tax on dividends you receive from investing in companies. This is a mixture of tax called resident withholding tax (RWT) and imputation credits.

When you receive a dividend in Sharesies, tax will already have been deducted from the amount you receive. Sharesies makes sure your RWT and dividend imputation credits add up to 33%.

We pay tax to Inland Revenue on your behalf. At the end of each tax year, we’ll send all your RWT and imputation credit info to you in your very own tax statement.

Tax on exchange-traded fund (ETF) dividends

You pay tax on dividends you receive from investing in ETFs at a flat rate of 28%. Tax is managed by the fund provider. If your income tax rate is lower than 28%, you can apply to use the imputation credit to reduce the tax you pay on other income you’ve received.

Tax on managed funds

With managed funds, the amount of tax you pay is based on the prescribed investor rate (PIR) you set in Sharesies. Tax is applied to investment income received by the fund itself—this is regardless of whether you’re personally making a gain or loss on your investments.

Tax is calculated when you sell any units at the end of the tax year (31 March). We keep a record of how much tax needs to be paid (or returned to you) with each calculation, and make things easy by making any payment to (or from) the IRD on your behalf. This will be deducted (or paid) into your Sharesies Wallet in April.

Always make sure your PIR is correct in Settings > Tax Details. Set your PIR.

Tax on Australian shares income

New Zealand tax residents

If you’re a New Zealand tax resident, we’ll pay tax on your Australian dividends on your behalf.

When you receive a dividend payment from an Australian investment, non-resident withholding tax (NRWT) will need to be paid to the Australian Taxation Office (ATO). Sharesies will pay this tax on your behalf. The amount of NRWT that needs to be paid on your dividend depends on how many franking credits the company has already paid on it.

Franking credits are very similar to NZ imputation credits. Both are used to reduce (or eliminate) double tax being paid on a dividend. However, franking credits cannot be claimed by New Zealand tax residents.

If the Australian company fully franks their dividend, no NRWT needs to be paid. If the dividend is not fully franked, 15% of the unfranked portion needs to be paid as NRWT. Sharesies will pay this to the ATO on your behalf before you receive the dividend in your Wallet.

Resident withholding tax (RWT) will also need to be paid to Inland Revenue (IRD) in NZ. RWT will be 33% of the total (gross) amount of the dividend, minus the NRWT that needs to be paid (if there is any). You’ll always receive 67% of the gross dividend.

For example: a company pays out a $100 dividend that isn’t fully franked, so let’s say it has an unfranked amount of $80.

$80 x 15% = $12 paid as NRWT to ATO

$100 x 33% - $12 = $21 paid as RWT to IRD

$100 - $12 - $21 = $67 net amount paid into your Wallet in Australian dollars (AUD).

Capital gains tax (CGT)

For New Zealand investors, CGT applies when you hold over 10% of foreign shares in a company or ETF with significant interest in Australian real estate.

If you’re unsure if this applies to you, we recommend reaching out to a professional tax advisor for guidance.

Tax on US shares income

We keep a record of the income you receive from US shares and pay tax on your behalf to the Internal Revenue Service (IRS) and Inland Revenue.

Some countries have tax treaties to avoid taxing you twice on the same investment. Your tax options depend on what country you’re a citizen or tax resident of.

Before you start investing in US shares, we’ll ask you a few questions about your tax situation. We’ll assign your tax treaty rate for US shares based on:

  • the answers you give on the W-8 BEN tax form (or W-9 form if you’re a US citizen or green card holder), and

  • the address you’ve given in your Sharesies account.

NZ tax treaty benefit

If you live in NZ and you’re an NZ tax resident, Sharesies will pay a total of 33% tax on dividends you receive from US investments on your behalf.

For example, if you’re entitled to a $1.00 USD dividend from a US company, we’ll pay 15% of the dividend in United States dollars (USD) to the IRS, and 18% of the dividend in New Zealand dollars (NZD) to Inland Revenue. You’ll receive the remaining 67% of the dividend amount in your US Wallet.

Some US dividends can also be paid to you from a non-US company—for example, a Canadian company listed on a US exchange. Tax will be deducted by the country in which the company is based. For NZ investors, we’ll deduct up to the 33% RWT amount and pay this directly to the IRD.

Different tax treatment may apply when investing in companies that are American depositary receipts (ADRs). Read about tax on ADRs.

If you’re a US person

If you’re a US citizen or Green Card holder, you’re considered a US person. Sharesies will pay a total of 33% tax on dividends you receive from US investments to Inland Revenue on your behalf, but no tax to the IRS.

For example, if you’re entitled to a $1.00 USD dividend from a US company, we’ll pay 33% of the dividend in NZD to Inland Revenue as tax. You’ll receive the remaining 67% of the dividend into your US Wallet.

As a US citizen or green-card holder, you may have other tax obligations to the IRS. Sharesies won’t handle this for you, and you should seek tax advice.

If you live outside of NZ

If you have an address outside of NZ, you won’t be able to claim a tax treaty rate. Sharesies will pay a total of 48% tax on dividends you receive from US investments on your behalf.

For example, if you’re entitled to a $1.00 USD dividend from a US company, we’ll pay 30% of the dividend in USD to the IRS, 18% of the dividend in NZD to Inland Revenue, and you’ll receive the remaining 52% of the dividend into your US Wallet.

Tax statements

At the end of each tax year, we'll send you a statement that shows you how much tax you’ve paid. Find past tax statements in Sharesies by going to Settings > Tax Details.

What to do at the end of the tax year

Foreign investment fund (FIF) tax

If you hold overseas shares (not including Australian-listed companies) that cost more than $50,000 NZD in total, then you may be obliged to follow foreign investment rules set by Inland Revenue. If this is you, Sharesies can’t handle your FIF tax calculations for you and you should seek professional tax advice.

Some New Zealand-based funds have an overseas focus to what they invest in. For example, an NZX-listed ETF might invest in a US-listed ETF that tracks a US index. You wouldn’t need to pay FIF tax for this type of fund. But if you directly invested over $50,000 NZD in a US-listed ETF, then you’d need to consider your FIF tax obligations.

To see what exchange a fund is listed on, look for the exchange under the fund’s name.

If your overseas shares cost less than $50,000 NZD, you don’t need to pay FIF tax.

FIF tax on the Inland Revenue website

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