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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 34: Attribution rule for income from personal services

You could also call this:

“How to balance tax payments between you and your company for personal service income”

This law is about how you can move money between you and your company when you’ve paid too much tax. It’s for people who do personal work through a company.

If your company pays more tax than it needs to, it can give some of that extra money to you if you haven’t paid enough tax. This helps balance things out.

The same thing works the other way too. If you’ve paid too much tax yourself, you can give some of that extra money to your company if it hasn’t paid enough.

You can move this money after you’ve paid the extra tax, or after the day when the tax was due, whichever comes later.

You need to tell the tax office about this money move. You have to say who’s getting the money, how much it is, and when you’re moving it. You need to do this when you file your tax return, or by a later date if the tax office says it’s okay.

When you move the money, it counts as if the person or company receiving it had paid that tax themselves. This means the tax office treats it like you or your company paid the right amount of tax from the start.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1519911.

Topics:
Money and consumer rights > Taxes
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“How to calculate remaining tax for merged companies”

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RC 35: Further income tax credited to provisional tax liability, or

“Using further income tax to pay provisional tax instalments”

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

RC 34Attribution rule for income from personal services

  1. This section applies for the purposes of the provisional tax rules and Part 7 of the Tax Administration Act 1994 for provisional tax paid for income from personal services to which section GB 27 (Attribution rule for income from personal services) may apply. The references in this section to working person and associated entity reflect the terminology used in section GB 27.

  2. If, in a tax year, the associated entity pays an amount of tax that is more than the provisional tax payable for the tax year, the entity may transfer some or all of the overpayment to the working person to the extent to which the amount of provisional tax paid by the person is less than their residual income tax for the tax year.

  3. If, in a tax year, the working person pays an amount of tax that is more than the provisional tax payable for the tax year, they may transfer some or all of the overpayment to the associated entity to the extent to which the amount of provisional tax paid by the entity is less than their residual income tax for the tax year.

  4. The associated entity and the working person may transfer an amount under subsection (2) or (3), as applicable, on or after the later of—

  5. the day on which the overpayment of provisional tax is paid by the entity or person, as applicable:
    1. the day on which the instalment of provisional tax payable for the tax year becomes payable by—
      1. the person, if the entity is making the transfer; or
        1. the entity, if the person is making the transfer.

        2. The Commissioner must be notified of a transfer under subsection (2) or (3) in a notice that—

        3. names the person to whom a transfer is made, and the amount to be transferred; and
          1. states the date on which the overpayment is treated as transferred to the associated entity or working person, as applicable; and
            1. is provided within the time for filing a return of income for the tax year for the person to whom the transfer is made, or an extended time allowed by the Commissioner.

              1. For the purposes of this section,—

              2. a transfer under subsection (2) or (3) is treated as made on the day stated in the notice; and
                1. provisional tax transferred by the associated entity to the working person for a tax year is treated as provisional tax paid by the working person and not by the associated entity; and
                  1. provisional tax transferred by the working person to the associated entity is treated as provisional tax paid by the associated entity and not by the working person.

                    Compare
                    Notes
                    • Section RC 34(1) heading: substituted (with effect on 1 April 2008), on , by section 500(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                    • Section RC 34(1): substituted (with effect on 1 April 2008), on , by section 500(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                    • Section RC 34(2) heading: substituted (with effect on 1 April 2008), on , by section 500(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                    • Section RC 34(2): substituted (with effect on 1 April 2008), on , by section 500(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                    • Section RC 34(3) heading: substituted (with effect on 1 April 2008), on , by section 500(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                    • Section RC 34(3): substituted (with effect on 1 April 2008), on , by section 500(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                    • Section RC 34(4) heading: substituted (with effect on 1 April 2008), on , by section 500(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                    • Section RC 34(4): substituted (with effect on 1 April 2008), on , by section 500(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                    • Section RC 34(5) heading: substituted (with effect on 1 April 2008), on , by section 500(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                    • Section RC 34(5): substituted (with effect on 1 April 2008), on , by section 500(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                    • Section RC 34(6) heading: substituted (with effect on 1 April 2008), on , by section 500(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                    • Section RC 34(6): substituted (with effect on 1 April 2008), on , by section 500(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                    • Section RC 34 list of defined terms amount of tax: inserted (with effect on 1 April 2008), on , by section 500(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                    • Section RC 34 list of defined terms associated person: inserted (with effect on 1 April 2008), on , by section 500(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).