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Income Tax Act 2007

General collection rules - Provisional tax - Table R1: Summary of instalment dates and calculation methods for provisional tax

RC 24: Calculating instalments in transitional years: GST ratio method

You could also call this:

“How to calculate tax instalments during a year when your income year changes if you use the GST ratio method”

If you use the GST ratio method to pay provisional tax, and you’re in a transitional year, there are special rules for calculating your instalments. A transitional year is when your income year changes.

For any part of the transitional year that falls before your new income year starts, you need to use the GST ratio method described in section RC 11. You’ll apply this method on the instalment dates A, B, C, D, E, and F that fall within your transitional year. These dates match up with the ones from your previous income year.

Remember, this only applies if you’re using the GST ratio method for your provisional tax and you’re in a transitional year. If you’re not sure what these terms mean, it’s a good idea to ask an adult or a tax expert for help.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1519886.

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RC 23: Calculating instalments in transitional years: estimation method, or

“Estimating provisional tax instalments for a transitional year”

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RC 25: Consequences of change in balance date, or

“How to handle tax payments when you change your financial year-end date”

Part R General collection rules
Provisional tax: Table R1: Summary of instalment dates and calculation methods for provisional tax

RC 24Calculating instalments in transitional years: GST ratio method

  1. This section applies to a person liable to pay provisional tax using a GST ratio in relation to instalments of provisional tax payable in a transitional year.

  2. For a period or part period before the start of the new income year, the person must apply the GST ratio under section RC 11 on whichever dates of instalments A, B, C, D, E, and F for their corresponding income year occur in the transitional year.

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Notes
  • Section RC 24(2): amended, on , by section 40(1) (and see section 40(2) for application) of the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 (2017 No 3).