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Income Tax Act 2007

Taxation of certain entities - Portfolio investment entities - Elections and consequences

HM 74: Transition: entities with non-standard income years

You could also call this:

“Rules for companies with special financial years becoming PIEs”

This section of the law talks about what happens when a company with a special financial year decides to become a type of investment called a PIE. It applies if the company uses certain ways to work out and pay its taxes.

When this happens, the law treats the day before the company becomes a PIE as if it’s the end of the company’s financial year. Then, it treats the next 31 March after the company becomes a PIE as if it’s the start of a new financial year that the tax office has approved.

This helps the company change from its special financial year to the standard financial year that PIEs use, which ends on 31 March. It’s a way to make sure the company’s taxes are calculated correctly during this change.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM2888880.

Topics:
Money and consumer rights > Taxes
Business > Industry rules
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“Rules for tax changes when becoming a Portfolio Investment Entity (PIE)”

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HM 75: Transition: treatment of shares held in certain companies, or

“How shares are handled when you become or stop being a PIE”

Part H Taxation of certain entities
Portfolio investment entities: Elections and consequences

HM 74Transition: entities with non-standard income years

  1. This section applies when—

  2. an entity with a non-standard income year chooses to become a PIE; and
    1. the entity calculates and pays its tax liability using the exit calculation or quarterly calculation option under section HM 42 or HM 43.

      1. Section 39 of the Tax Administration Act 1994 applies as if—

      2. the day before that on which the election takes effect were the original balance date of the entity; and
        1. the next 31 March after the election takes effect were a new balance date approved by the Commissioner for the entity.

          Compare
          • s HL 13(2)
          Notes
          • Section HM 74: 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).