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Income Tax Act 2007

General collection rules - Terminating provisions

RZ 4: GST ratio method: 2010–11 to 2013–14 income years

You could also call this:

“Special rules for calculating provisional tax using GST ratio method from 2010 to 2014”

When you calculate your provisional tax using the GST ratio method, you need to follow some special rules for certain income years. These rules apply if you’re a new personal tax rate person or a new company tax rate person.

If you’re a new personal tax rate person, the rules affect your calculations for the 2010-11 to 2013-14 income years. The amount of tax you use in your calculations will be reduced. For example, for the 2010-11 and 2011-12 income years, you’ll use 90% of your previous year’s tax, 85% of the tax from two years ago, and 80% of the tax from three years ago.

If you’re a new company tax rate person, the rules affect your calculations for the 2011-12 to 2013-14 income years. For these years, you’ll use 95% of your previous years’ tax amounts in your calculations.

These reductions in the tax amounts you use for your calculations are designed to help you adjust to new tax rates. The exact percentage you use depends on which income year you’re calculating for and how far back the tax year is that you’re using in your calculation.

Remember, these rules only apply if you’re using the GST ratio method to calculate your provisional tax. The method is slightly different for each affected income year, so make sure you’re using the right percentages for your situation.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1520555.

Topics:

Money and consumer rights > Taxes

RZ 3: Standard method: 2010–11 to 2012–13 income years, or

“Rules for calculating provisional tax from 2010 to 2013”

RZ 5: Calculating amounts under standard method: 2010–11 to 2012–13 income years, or

“Provisional tax calculation adjustments for new tax rates from 2010 to 2013”

Part R General collection rules
Terminating provisions

RZ 4GST ratio method: 2010–11 to 2013–14 income years

This section applies to the calculation of a person's provisional tax liability, when section RC 8 (GST ratio method) applies and requires an amount of residual income tax or an assessment of income tax for the calculation of the GST ratio,—
for instalments payable on or after 1 October 2010 for the 2010–11 income year and for instalments for the 2011–12, 2012–13, and 2013–14 income years, if the person is a new personal tax rate person:
for instalments payable for the 2011–12, 2012–13, and 2013–14 income years, if the person is a new company tax rate person.

The GST ratio method under section RC 8 is modified so that—
for instalments payable on or after 1 October 2010 for the 2010–11 income year, and for the 2011–12 income year, if the person is a new personal tax rate person,—
1. the amount of residual income tax or the amount of an assessment of income tax for the preceding year, as applicable, is reduced by multiplying the amount by 0.90:
2. the amount of residual income tax or the amount of an assessment of income tax for the tax year before the preceding year or the transitional year, as applicable, is reduced by multiplying the amount by 0.85:
3. the amount of residual income tax or the amount of an assessment of income tax for the year that is 2 years before the preceding year or the transitional year, as applicable, is reduced by multiplying the amount by 0.80:
for instalments payable for the 2012–13 income year, if the person is a new personal tax rate person,—
1. the amount of residual income tax or the amount of an assessment of income tax for the tax year before the preceding year or the transitional year, as applicable, is reduced by multiplying the amount by 0.90:
2. the amount of residual income tax or the amount of an assessment of income tax for the year that is 2 years before the preceding year or the transitional year, as applicable, is reduced by multiplying the amount by 0.85:
for instalments payable for the 2013–14 income year, if the person is a new personal tax rate person, the amount of residual income tax or the amount of an assessment of income tax for the year that is 2 years before the preceding year or the transitional year, as applicable, is reduced by multiplying the amount by 0.90:
for instalments payable for the 2011–12 income year, if the person is a new company tax rate person,—
1. the amount of residual income tax or the amount of an assessment of income tax for the preceding year, as applicable, is reduced by multiplying the amount by 0.95:
2. the amount of residual income tax or the amount of an assessment of income tax for the tax year before the preceding year or the transitional year, as applicable, is reduced by multiplying the amount by 0.95:
3. the amount of residual income tax or the amount of an assessment of income tax for the year that is 2 years before the preceding year or the transitional year, as applicable, is reduced by multiplying the amount by 0.95:
for instalments payable for the 2012–13 income year, if the person is a new company tax rate person,—
1. the amount of residual income tax or the amount of an assessment of income tax for the tax year before the preceding year or the transitional year, as applicable, is reduced by multiplying the amount by 0.95:
2. the amount of residual income tax or the amount of an assessment of income tax for the year that is 2 years before the preceding year or the transitional year, as applicable, is reduced by multiplying the amount by 0.95:
for instalments payable for the 2013–14 income year, if the person is a new company tax rate person, the amount of residual income tax or the amount of an assessment of income tax for the year that is 2 years before the preceding year or the transitional year, as applicable, is reduced by multiplying the amount by 0.95.

Notes

Section RZ 4: substituted, on 1 October 2010, by section 29 of the Taxation (Budget Measures) Act 2010 (2010 No 27).