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Income Tax Act 2007

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

HM 44: Provisional tax calculation option

You could also call this:

“How PIEs can choose to calculate and pay provisional tax for the whole year”

If you are a multi-rate PIE, you can choose to calculate your income tax liability for the whole income year and pay provisional tax. To do this, you need to tell the Commissioner before the start of the income year or when you become a PIE. You must let the Commissioner know about this choice and when you will attribute income to investors.

However, if you are a foreign investment PIE, you can’t use this option to calculate and pay your income tax.

When you use this option, you need to work out your tax for the income year that matches the tax year. You’ll need to pay provisional tax during the year and any final tax at the end of the year, just like other taxpayers do.

If your calculations show that you’ve made a loss, you can’t use it right away. Instead, you must carry it forward to use in a later 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=DLM2888805.

Topics:
Money and consumer rights > Taxes
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“How PIEs can calculate and pay tax every three months”

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HM 44B: NRWT calculation option, or

“How foreign investment PIEs can choose to calculate tax on certain dividends paid to overseas investors”

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

HM 44Provisional tax calculation option

  1. This section applies when a multi-rate PIE chooses to calculate its income tax liability on an income year basis and pay provisional tax by notifying the Commissioner before the start of the income year or when choosing to become a PIE. 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. Despite subsection (1), a multi-rate PIE that chooses under section HM 71B to become a foreign investment PIE must not apply this section to calculate and pay its income tax liability.

  3. The PIE must calculate its tax liability for the income year corresponding to the tax year under section HM 47 and pay provisional tax for the tax year as required by subpart RC (Provisional tax) and terminal tax for the tax year as required by subpart RB (Terminal tax).

  4. If the calculation of the liability results in a negative amount, the loss must be carried forward to a later tax year, and section HM 64 does not apply.

Compare
  • s HL 23(1), (2)
Notes
  • Section HM 44: 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 44(1): replaced, on (with effect on 1 April 2010), by section 130(1) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
  • Section HM 44(1B) heading: inserted, on , by section 73(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
  • Section HM 44(1B): inserted, on , by section 73(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
  • Section HM 44 list of defined terms attribution period: inserted, on (with effect on 1 April 2010), by section 130(2) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
  • Section HM 44 list of defined terms Commissioner: inserted, on (with effect on 1 April 2010), by section 130(2) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
  • Section HM 44 list of defined terms foreign investment PIE: inserted, on , by section 73(2) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).