Online IR4 2004

Help IR4 2004 - 2005 provisional tax

2005 provisional tax is charged for income the company will earn in the 2005 income year. It is payable in three equal instalments. There are two options for paying provisional tax - standard and estimation.

If the company's 2004 residual income tax (Box 28J of the return) is:

• less than $2,500 it does not have to pay provisional tax, but it can make voluntary payments (read the notes on interest)
• $2,500 or more but expected to be less than $2,500 for 2005 it may estimate 2005 provisional tax at nil
• $2,500 or more and expected to be $2,500 or more for 2005 it must pay 2005 provisional tax using one of the payment options.

If you anticipate your residual income tax will exceed $2,500 for the 2005 year, read the notes on interest. You may be liable for interest from your first provisional tax instalment date.

Which option to use

All companies may choose either of the payment options.

Standard option

2005 provisional tax is the 2004 residual income tax plus 5%. If you use this option write S in Box 31Aon the return and the amount of 2005 provisional tax in Box 31B.

If your 2004 return is not filed by the due date for the first instalment of the 2005 provisional tax, the provisional tax is the 2003 residual income tax plus 10%. For more information see 2004 return is not filed by your first instalment date.

Estimation option

Companies can estimate their 2005 provisional tax. They can re-estimate any number of times up to their third instalment due date. If the company's 2005 residual income tax is expected to be less than the 2004 tax, estimating may prevent the company from paying more than it has to. Reasons for estimating could be:

• If the 2005 residual income tax is expected to be less than $2,500, it can estimate its 2005 provisional tax as nil. If during the year it looks as if the 2005 residual income tax will be $2,500 or more, the company should re-estimate its 2005 provisional tax on or before the instalment due date.
• If the 2005 residual income tax is expected to be $2,500 or more, but less than the company's2004 residual income tax, it can estimate its 2005 provisional tax to the expected amount.
• If the company chooses the standard option, it still has the option of estimating its 2005 provisional tax any time before its third instalment due date.

Note
An estimate must be "fair and reasonable" at each instalment it applies to. Read the notes on the lack of reasonable care penalty and interest if you use the estimation option.

If the company estimates its provisional tax, write "E" in Box 31A on the return and the amount of 2005 provisional tax in Box 31B.

If you estimate your provisional tax your instalments should be one-third of your estimation.

If you need more help, read our booklet Provisional tax (IR289) or you can phone us. You can also order the IR289 through INFOexpress.

Other pages in this section

• Help IR4 2004 - Adjustments to debit balance
• Help IR4 2004 - Associated taxpayers
• Help IR4 2004 - Business or rental income
• Help IR4 2004 - Closing balance
• Help IR4 2004 - Has the company ceased
• Help IR4 2004 - Company controlled or owned by non-residents
• Help IR4 2004 - company details
• Help IR4 2004 - Conduit tax relief
• Help IR4 2004 - Credits
• Help IR4 2004 - Debits
• Help IR4 2004 - Credits
• Help IR4 2004 - Debits
• Help IR4 2004 - Opening Balance
• Help IR4 2004 - Dividend withholding payment account return
• Help IR4 2004 - Foreign investor tax credit
• Help IR4 2004 - Foreign rights
• Help IR4 2004 - Foreign-sourced dividends
• Help IR4 2004 - Imputation
• Help IR4 2004 - Transfer to the imputation credit account
• Help IR4 2004 - Imputation credits
• Help IR4 2004 - Imputation penalty tax
• Help IR4 2004 - Imputation return
• Help IR4 2004 - Total income after net losses brought forward
• Help with online IR 4 company return 2004
• Help IR4 2004 - Injury Prevention, Rehabilitation, and Compensation Act 2001 (ACC)
• Help IR4 2004 - Insurance premiums paid to an overseas insurer
• Help IR4 2004 - Loss attributing qualifying company
• Help IR4 2004 - Loss from a loss attributing qualifying company
• Help IR4 2003 - Late filing penalties
• Help IR4 2004 - Late payment
• Help IR4 2004 - Limitation on tax refunds
• Help IR4 2004 - Net losses brought forward
• Help IR4 2004 - Lowest economic interests of shareholders
• Help IR4 company return 2004
• Help IR4 2004 - Non-resident entertainer or contractor
• Help IR4 2004 - Non-resident
• Help IR4 2004 - New Zealand dividends
• Help IR4 2004 - New Zealand interest
• Help IR4 2004 - Opening balance
• Help IR4 2004 - Other income
• Help IR4 2004 - Overseas income
• Help IR4 2004 - Partnership, estate or trust income
• Help IR4 2004 - Payment dates
• Help IR4 2004 - Dividend withholding payment penalty tax
• Help IR4 2004 - Refunds and/or transfers
• Help IR4 2004 - Return due date
• Help IR4 2004 - 2004 return not filed by 2005 provisional tax instalment date
• Help IR4 2004 - Self-assessment by taxpayers
• Help IR4 2004 - Shareholder details
• Help IR4 2004 - Share repurchases
• Help IR4 2004 - Net losses and subvention payments
• Help IR4 2004 - Tax sparing, group investment funds and superannuation schemes
• Help IR4 2004 - Which companies must file a return

Date published: 02 Dec 2004

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