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Customers can use tax pooling arrangements run by intermediaries registered with Inland Revenue. If a customer underpays provisional tax, we may charge use-of-money interest (UOMI). If a customer pays too much provisional tax, they may receive UOMI. Tax pooling allows customers to pool provisional tax payments, allowing offsetting of underpayments within the same pool, reducing the amount of UOMI charged.

In order to use funds in a tax pooling account to satisfy a provisional or income tax obligation for the 2019 income year, your transfer request by your intermediary must normally be made on or before either 75 or 76 days of your terminal tax date. However, if you have been affected by COVID-19, your request for the 2019 income year may be able to be made up to 365 days after terminal tax date.

You will need to contact your tax pooling intermediary to discuss your eligibility.

The impact of COVID-19 means that some customers who would have used tax pooling couldn’t because of cashflow difficulties. If eligible, your tax pooling intermediary now has 365 days from your terminal tax date to request a transfer, if:

  • your contract with a tax pooling intermediary to purchase tax pooling funds was in place on or before 21 July 2020
  • between January and July 2020, your business experienced or is expected to experience a significant decline in revenue as a result of COVID-19.

The Commissioner’s variation decision, COV 20/05 approving this extension can be found in the link below. Further details on tax pooling, including a list of registered tax pooling intermediaries, can be found in the link below.

COV 20/05 Variation in relation to s RP 17B(4) of the Income Tax Act 2007 to extend time for tax pooling transfers

Tax pooling