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Te tikanga moni whiwhi mahi kaute tāke takitaro Provisional tax accounting income method

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If you have turnover of less than $5 million a year you can work out your provisional tax using the accounting income method (AIM).

It will suit your business if:

  • your business is growing
  • you're new to business
  • you have irregular or seasonal income
  • it's hard to forecast your income accurately
  • you have accounting software or want to start using accounting software.

If you make your payments in full and on time, there is no exposure to use-of-money interest.

You'll only pay provisional tax when your business makes a profit.

If your business makes a loss you can get your refund of overpaid provisional tax straightaway rather than waiting until the end of the year.

You can sign up to use the accounting income method any time during the year.

Refunds of overpaid provisional tax

Your statement of activity will let us know if you've overpaid your provisional tax for the year.

A refund can be sent to you straightaway – you won't need to file an Annual imputation return (IR4J) or wait until the end of the year to get the refund.

What happens if a statement of activity isn't filed

If you miss two statements of activity, we'll contact you to make sure there hasn't been a misunderstanding or system error.

If you continue to miss filing your statement of activity you may be moved from AIM to the estimation option. This may expose you to use-of-money interest.