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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 29: Residual income tax of consolidated groups

You could also call this:

“How to calculate provisional tax when joining a consolidated group”

When you are part of a group of companies that file taxes together, this is called a consolidated group. If you join this group in the current tax year, but weren’t part of it for some or all of the last two tax years, there are special rules about how to calculate your provisional tax.

The group’s leftover income tax (called residual income tax) for the last year or the year before is treated as if it has gone up. It goes up by the amount of your own leftover income tax from that same time. If you’re only part of the group for some of the current tax year, the increase is only for the time you’re in the group.

These special rules only apply to the provisional tax payments you need to make after you join the group. They don’t affect any payments you made before joining.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1519898.

Topics:
Money and consumer rights > Taxes
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“How consolidated groups pay provisional tax as one company”

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RC 30: Consolidated groups using estimation method, or

“How to estimate tax when a company joins or leaves a group”

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

RC 29Residual income tax of consolidated groups

  1. This section applies for the purposes of the provisional tax rules if a company is part of a consolidated group of companies in a tax year but was not part of the group for some or all of the preceding tax year, or some or all of the tax year before the preceding tax year, as applicable.

  2. The residual income tax of the consolidated group for the preceding tax year, or for the tax year before the preceding tax year, as applicable is treated as increased by an amount equal to the residual income tax of the company for the preceding tax year, or for the tax year before the preceding tax year, as applicable. If the company is part of the group for part of the current tax year, the amount of residual income tax is increased as a proportion on the basis of the part of the tax year during which the company is part of the group.

  3. If the company is part of a group for part of the tax year, this section applies only to instalments of provisional tax payable after the date on which the company becomes part of the group.

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Notes
  • Section RC 29(1): amended, on , by section 175(1) (and see section 175(3) for application) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).
  • Section RC 29(2): amended, on , by section 175(2) (and see section 175(3) for application) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).