Provisional tax changes
From 1 April 2009 there were some provisional tax payment changes that relate to:
- reducing your provisional tax payments for the 2008/09 and 2009/10 income years
- provisional tax use of money interest (UOMI).
Reducing your provisional tax payments
If you use the standard method to calculate your provisional tax payments, there was a change to the way provisional tax is calculated for the 2008/09 and 2009/10 income years - since 1 April 2009 you pay less provisional tax.
Note
You can make voluntary provisional tax payments at any time to reduce the amount of tax left to pay at the end of the income year.
Provisional tax payments for the 2008/09 income year
In April we sent you or your tax agent a statement showing your remaining provisional tax payments due for the rest of the 2008/09 income year.
Already filed your 2007/08 tax return?
| If you use the standard method and... | then your reduced provisional tax calculation is... |
|---|---|
| normally file an Individual tax return (IR3) | the amount of your residual income tax (RIT) for 2007/08 minus $730.00. |
| are normally taxed at the 30% rate (for example you file an Income tax return companies (IR4)) | the amount of your RIT for 2007/08 multiplied by 90%. |
| file other income tax returns (for example an Income tax return: Maori authorities (IR8) or an Income tax return: estate or trust (IR6)) | the amount of your RIT for 2007/08. |
What is residual income tax?
Residual income tax (RIT) is the tax you have left to pay, less any tax credits.
Haven't filed your 2007/08 return yet?
| If you use the standard method and... | then your reduced provisional tax calculation is... |
|---|---|
| file an Individual tax return (IR3) | the amount of your RIT for 2006/07 minus $730.00 multiplied by 105%. |
| are normally taxed at the 30% rate (for example you file an Income tax return companies (IR4)) | the amount of your RIT for 2006/07 multiplied by 95%. |
| file other income tax returns (for example an Income tax return: Maori authorities (IR8) or an Income tax return: estate or trust (IR6)) | the amount of your RIT for 2006/07 multiplied by 105%. |
Important
Please do not refer to the existing Individual income tax return guide 2009 (IR3G) when you calculate your provisional tax payments. This guide was printed before the changes were introduced.
Provisional tax payments for the 2009/10 income year
Already filed your 2008/09 tax return?
| If you use the standard method and ... | then your reduced provisional tax calculation is... |
|---|---|
| normally file an Individual tax return (IR3) | the amount of your residual income tax (RIT) for 2008/09 minus $730.00. |
| file other income tax returns (for example an Income tax return companies (IR4)) | the amount of your RIT for 2008/09. |
Haven't filed your 2008/09 tax return yet?
| If you use the standard method and ... | then your reduced provisional tax calculation is... |
|---|---|
| file an Individual tax return (IR3) | the amount of your RIT for 2007/08 minus $1460.00 multiplied by 105%. |
| are normally taxed at the 30% rate (for example you file an Income tax return companies (IR4)) | the amount of your RIT for 2007/08 multiplied by 95%. |
| file other income tax returns (for example an Income tax return: Maori authorities (IR8) or an Income tax return: estate or trust (IR6)) | the amount of your RIT for 2007/08 multiplied by 105%. |
Provisional tax use of money interest (UOMI)
The threshold for being charged provisional tax UOMI, based on your RIT, has increased from $35,000 to $50,000 for individuals.
If you have a provisional tax shortfall after using the standard method to calculate and pay your provisional tax, and your RIT is less than $50,000, you won't be charged any UOMI from the provisional tax instalment due date.
Note
UOMI continues to be applied to any tax shortfalls after the due date for the tax left to pay at the end of the income year (after provisional tax payments have been deducted).
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