---
title: "What is Withholding Tax?"
description: "Withholding tax is the tax taken out of the income you earn from your investment before you receive it and is then paid to the tax office on your behalf."
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md_url: "https://help.blossomapp.com/articles/what-is-withholding-tax-un38jw9lpz.md"
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# What is Withholding Tax?

Withholding tax is the tax taken out of the income you earn from your investment before you receive it and is then paid to the tax office on your behalf.

When a New Zealand resident invests in Blossom, an Australian Fund, they may have to pay Australian withholding tax.

The good news is there’s a Double Tax Agreement between Australia and New Zealand which provides a way to avoid paying tax twice on the same income (once in Australia and once in New Zealand). 

Kiwi investors may be able to claim a foreign tax credit in New Zealand for the tax already paid in Australia.