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RC 24: Calculating instalments in transitional years: GST ratio method
or “How to calculate tax instalments during a year when your income year changes if you use the GST ratio method”
You could also call this:

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

If you need to pay provisional tax and you change your balance date, you need to follow some rules. You must keep using the same payment dates as before until you reach your new balance date. There are special rules in [Sections RC 20 to RC 24] and [part B] that tell you how much to pay and when to pay during this change period.

If you’re estimating your tax during this change period, you need to do two estimates. First, you estimate as if you’re not changing your balance date. Then, after the Commissioner tells you that your change is approved, you need to estimate again.

If you use a GST ratio to work out your provisional tax and you’re changing from even-numbered months to odd-numbered months (or the other way around), you need to do something special. You have to adjust your tax for the one-month period before your new income year starts. You also need to pay this extra bit of tax either 28 days after that month ends, or by 15 January if it’s in November, or by 7 May if it’s in March.

If you’re registered for GST and changing your balance date means your GST period doesn’t match up with your new balance date, you need to adjust your GST period too. This is done under [section 15B(3) or 15C of the Goods and Services Tax Act 1985].

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Next up: RC 26: Registering for GST or cancelling registration

or “How registering for GST or cancelling registration affects your provisional tax payments”
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Part R General collection rules
Provisional tax: Table R1: Summary of instalment dates and calculation methods for provisional tax

RC 25Consequences of change in balance date

  1. This section applies to a person liable to pay provisional tax who changes their balance date.

  2. The person must continue to use the instalment dates that applied before the change in balance date was approved until the new balance date is reached.

  3. Sections RC 20 to RC 24 and schedule 3, part B (Payment of provisional tax and terminal tax) apply for the person’s transitional year to determine the amount and payment date of the instalments.

  4. In a transitional year, if the person uses the estimation method, they must,—

  5. before the date on which the Commissioner notifies a change in balance date, estimate the residual income tax as if no change in balance date is or will be approved; and
    1. after the date on which the Commissioner notifies a change in balance date, re-estimate the residual income tax.

      1. Subsection (6) applies if the person uses a GST ratio to determine the provisional tax payable for a tax year, and in changing their balance date, moves from—

      2. a set of instalment dates in even-numbered months to a set of instalment dates in odd-numbered months; or
        1. a set of instalment dates in odd-numbered months to a set of instalment dates in even-numbered months.

          1. The person must—

          2. adjust their provisional tax liability for the part-period of 1 month before the start of the new income year; and
            1. pay the instalment of provisional tax for the part-period as their final taxable period—
              1. 28 days after the end of the part period, unless subparagraph (ii) or (iii) applies; or
                1. by 15 January if the part-period falls in November; or
                  1. by 7 May if the part period falls in March.

                  2. For a registered person, if a change in balance date means that their taxable period is not aligned with the balance date, an adjustment must be made to their taxable period under section 15B(3) or 15C of the Goods and Services Tax Act 1985.

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                  Notes
                  • Section RC 25(6): substituted, on , by section 536 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).