Portfolio investment entities (PIEs) and New Zealand residents.
Prescribed investor rates (PIRs) for New Zealand residents
The PIR for resident individuals is based on your income from the last two years. The prescribed rates are 10.5%, 17.5% and 28%. PIE attributed income will also be considered.
If you do not provide a multi-rate PIE (MRP) with your PIR or IRD number, you will be taxed at a default 28%. If this happens, you cannot include the attributed income in your tax return to get a refund of the balance.
You may be taxed at a zero rate if you exit a MRP during the quarter. Transitional residents may also have a 0% PIR.
Income attributed by the MRP
If you’ve been taxed at your correct PIR your income is not included in your tax return.
Your MRP income must be included in your income if you have:
- Applied a PIR lower than your correct PIR.
- Had a zero rate applied due to a quarterly exit.
- Chosen not to include your worldwide income as a new resident.
If you cease to be a resident, you should have a PIR of 28% from the date you leave New Zealand. Your MRP will need to know as soon as possible.
New residents include their worldwide income when working out their PIR. You may choose not to account for worldwide income if you expect income in either of your first two resident years will be significantly lower than your total income from previous years. PIE income over $200 will then need to be included in your tax return.
PIE income may still need to be included as income if you receive Working for Families Tax Credits or you have a student loan.
MRPs generally need to provide details of your income by 31 May or 30 June of the following tax year. If you don’t receive details from your MRP or you think the investor statement is wrong, you need to contact the MRP.
If your MRP income has been zero rated or if you have given a PIR lower than your correct rate, you will need to keep records relating to that income for seven years.