IRD and Certificate of Exemptions

The IRD continue to be very difficult and unreasonable in this area. Currently the IRD are working to eliminate the contractors within the kiwifruit industry that do not play by the rules. As a consequence of their current strategy and actions, they are (in our opinion unfairly) refusing Certificate of Exemptions for Withholding Tax to nearly all horticultural contractors for reasons that are totally outside the contractor’s control.

So, if you are a grower that engages contractors you may now be asked to deduct Withholding Tax from your contractor payments. This will mean you must register as an employer and make certain disclosures to the IRD within 7 days of each payment and pay the required Withholding Tax to the IRD. If you fail to do so, the IRD will require you to pay Withholding Tax on top of what you have already paid to the contractor (it is 100% the payer’s risk).

We suggest that you should check their Exemption Certificate every time they start work for you, as it must always be up to date. If your contractor comes to you with a request to deduct Withholding Tax in most cases it is not an indication they are in trouble with the IRD, it is just they have been caught up in the unreasonable way the IRD are trying to fix a problem within the industry. If this matter affects you in any way, please reach out to the team. They know what needs to happen to make sure you are compliant.