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Income Tax Act 2007

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

HM 43: Quarterly calculation option

You could also call this:

"Paying tax each quarter for some investments"

If you have a multi-rate PIE, you must calculate your tax liability each quarter using a formula from section HM 47. You need to tell the Commissioner about this under section 31B of the Tax Administration Act 1994. You have to pay your tax liability within one month of the end of each quarter. If an investor's interest in your PIE reaches a certain level, they are treated as zero-rated for a period that includes a few extra working days after the quarter ends, as stated in section HM 61. However, this does not apply if you choose to pay an amount under section HM 45. If an investor's interest is more than zero at the end of a period, you must pay the value of that interest to the Commissioner at the same time as your quarterly payment. You do not have to pay provisional tax under subpart RC for the tax year.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM2888803.

Topics:
Money and consumer rights > Taxes
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HM 42B: Part-year tax calculations for PIEs under the exit calculation option for the 2010–11 tax year, or

"How PIEs calculate tax in two parts for the 2010-11 tax year"

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HM 44: Provisional tax calculation option, or

"A way for some investors to choose how they calculate and pay tax on their income throughout the year."

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

HM 43Quarterly calculation option

  1. A multi-rate PIE that does not choose to calculate and pay its income tax liability under the exit calculation or provisional tax calculation options, must calculate its tax liability for each quarter of the tax year using the formula set out in section HM 47. The PIE must notify the Commissioner under section 31B of the Tax Administration Act 1994 of the calculation option and of the applicable attribution period.

  2. The PIE must pay to the Commissioner the amount of its income tax liability for the quarter within 1 month of the end of the quarter.

  3. If the investor interest of an investor in the PIE has reached the exit level, they are treated under section HM 61 as zero-rated for the exit period which includes a grace period of 5 working days after the end of the quarter. This subsection does not apply if the PIE voluntarily chooses to pay an amount under section HM 45.

  4. If the investor interest of an investor at the end of an exit period is more than zero, the PIE must pay an amount equal to the value of the interest to the Commissioner at the same time as the payment referred to in subsection (2).

  5. The PIE is not required to pay provisional tax under subpart RC (Provisional tax) for the tax year.

Compare
  • s HL 22
Notes
  • Section HM 43: 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 43(1): replaced, on (with effect on 1 April 2010), by section 129(1) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
  • Section HM 43(3): amended, on , by section 102(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
  • Section HM 43(3): amended (with effect on 1 April 2010), on (applying for the 2010–11 and later income years), by section 97(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
  • Section HM 43(4): amended (with effect on 1 April 2010), on (applying for the 2010–11 and later income years), by section 97(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
  • Section HM 43 list of defined terms attribution period: inserted, on (with effect on 1 April 2010), by section 129(2) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
  • Section HM 43 list of defined terms zero-rated investor: repealed, on , by section 102(2) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).