New Tax Codes for Contractors
From 1 April 2017, if you are hiring any contractors that are required to have withholding tax deducted, or are a contractor yourself the IRD have issued a new form to be filled in from April 2017 onwards.
Contractors providing labour hire services, such as Recruitment Agency or IT Contractors, are required to have these deductions made no matter the structure their business activity is under. Previously, companies did not have an obligation for withholding tax deductions.
This gives separation between employees and contractors and the tax codes that each should use. There is also the ability for contractors to elect the tax rate to be deducted rather than using the standard rates as was required in the past.
If you’re a contractor now, and happy with your current withholding tax rate, you don’t need to do anything.
Here is the link to the new form below if this applies to you or your business:
If you would like help choosing the rate of your withholding tax deductions, please contact us