173QTransfer of excess provisional tax if taxpayer estimates or revises estimate of residual income tax, determined before assessment

1. This section applies in respect of excess provisional tax if—

2. a taxpayer or their agent requests a transfer allowed by section 173L, section 173M(2)(a) to 173M(2)(f), or section 173M(3); and
3. on the date that the Commissioner actions the request, the taxpayer—
   1. has paid provisional tax for a tax year based on an estimate of their residual income tax and, as a result of a revised estimate for the year, the taxpayer has paid more provisional tax than the revised estimate for the year; or
   2. pays provisional tax for a tax year in accordance with section RC 5(2) and (3) of the Income Tax Act 2007 and, as a result of estimating their residual income tax for the year, the taxpayer has paid more provisional tax than the estimated residual income tax for the year; and
4. the request is actioned before an assessment is made under Part 6.

5. The excess provisional tax that may be transferred on a particular date (date A) is calculated according to the formula:

   $provisional\; tax\; paid\; -\; refunds\; -\; estimated\; RIT$

   Where:

   • provisional tax paid provisional tax paid

     is the provisional tax paid for a tax year on or before date A, including:

   • voluntary payments made under section RC 12 of the Income Tax Act 2007; and
   • tax transferred to the taxpayer
   • refunds refunds

     are the refunds of the provisional tax that are paid to the taxpayer on or before date A, including transfers by the taxpayer or offsets by the Commissioner against unpaid tax

   • estimated RIT estimated RIT

     is the taxpayer's estimated residual income tax or revised estimated residual income tax that would be due by date A for the purpose of calculating interest under Part 7, calculated as if the estimated residual income tax or revised estimated residual income tax were residual income tax and section 120KE(1) did not apply.

6. The Commissioner must not transfer an amount on date A if, as a result,—

7. a taxpayer to whom subsection (1)(b)(i) applies would not have paid, on a date (date B) that falls after date A, the amount of their revised estimated residual income tax that would have been due on date B under Part 7, calculated as if the revised estimated residual income tax were residual income tax and section 120K(4) did not apply, unless the taxpayer requests a transfer back to their account on or before date B; or
8. a taxpayer to whom subsection (1)(b)(ii) applies would not have paid, on a date (date B) that falls after date A, the amount of their estimated residual income tax that would have been due on date B under Part 7, calculated as if the estimated residual income tax were residual income tax and section 120K(4) did not apply, unless the taxpayer requests a transfer back to their account on or before date B.

9. The amount that may be transferred under subsection (2) may not be more than—

10. if subsection (1)(b)(i) applies, the net provisional tax paid less the revised estimated residual income tax for the tax year:
11. if subsection (1)(b)(ii) applies, the net provisional tax paid less the estimated residual income tax for the tax year.