We’re aware of an issue where provisional tax is being applied to agents for non-resident insurers and non-resident contractors who are not required to pay provisional tax.
Agents for non-resident insurers
This issue only occurs when premiums paid to non-resident insurers are returned on a Companies income tax return - IR4 by E-File or a paper return. When an agent for a non-resident returns the premiums paid in myIR it is returned on an As-agent (IR1215) and provisional tax is not applied to the account.
The 2020 income tax year is the last year for using E-File. This issue will not occur through Gateway services from 2021 onwards as income will be returned on the IR1215.
A non-resident contractor who has not been given an exemption by the Commissioner for the tax year is not required to pay provisional tax. We are working on a fix so that any customers who are not required to pay provisional tax are identified and provisional tax is not applied to their accounts. We will provide an update once this issue has been fixed.
If you have any clients affected by the above issue, please send us a message in myIR to have the provisional tax removed.