Plain language law

New Zealand law explained for everyone

Income Tax Act 2007

Taxation of certain entities - Portfolio investment entities - Calculating and paying tax liability

HM 41: Options for calculation and payment of tax

You could also call this:

“How to calculate and pay tax as a multi-rate PIE”

You have three options for calculating and paying your income tax if you are a multi-rate PIE. You can pay tax using the exit calculation option, the quarterly calculation option, or by paying provisional tax and terminal tax calculated on a yearly basis.

The default option is the quarterly calculation option. If you want to use one of the other options, you need to tell the Commissioner.

Your income tax liability for the tax year is the total amount calculated using the method you choose. If you use the provisional tax calculation option, it’s based on your income year that matches the tax year.

If you’re a multi-rate PIE that decides to become a foreign investment PIE, you can’t use the provisional tax calculation option to work out your income tax liability.

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM2888799.

Topics:
Money and consumer rights > Taxes
Previous

HM 40: Deductions for attributed PIE losses for zero-rated and exiting investors equal to amount attributed, or

“Zero-rated or exiting PIE investors can deduct attributed losses”

Next

HM 42: Exit calculation option, or

“How multi-rate PIEs calculate and pay tax for exiting and remaining investors”

Part H Taxation of certain entities
Portfolio investment entities: Calculating and paying tax liability

HM 41Options for calculation and payment of tax

  1. The options available to a multi-rate PIE for calculating and paying its income tax liability are—

  2. the payment of tax calculated under the exit calculation option, see section HM 42; or
    1. the payment of tax calculated under the quarterly calculation option, see section HM 43; or
      1. the payment of provisional tax and terminal tax calculated on an income-year basis, see section HM 44.

        1. The PIE must use the default option under subsection (1)(b) unless it chooses an option under subsection (1)(a) or (c) by notifying the Commissioner.

        2. The income tax liability of the PIE for the tax year is equal to the total amount calculated under the relevant method for periods in the tax year or, in the case of the provisional tax calculation option under section HM 44, for the PIE's income year corresponding to the tax year.

        3. Despite subsection (1)(c), a multi-rate PIE that chooses under section HM 71B to become a foreign investment PIE must not use the provisional tax calculation option in section HM 44 to calculate its income tax liability.

        Compare
        • ss HL 16(3), HL 22–HL 24
        Notes
        • Section HM 41: inserted, on (applying for the 2010–11 and later income years), by section 292(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
        • Section HM 41(4) heading: added, on (applying for the 2012–13 and later income years for a foreign investment variable-rate PIE and a notified foreign investor in the PIE), by section 72(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
        • Section HM 41(4): added, on (applying for the 2012–13 and later income years for a foreign investment variable-rate PIE and a notified foreign investor in the PIE), by section 72(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).