Prescribed investor rates (PIRs)
If you're a New Zealand tax resident, your PIE income will be taxed using the prescribed investor rate (PIR) you provide. Your prescribed investor rate is based on your income from the last 2 years, including PIE income.
The prescribed rates are 10.5%, 17.5% and 28%.
If you have a multi-rate PIE (MRP) you need to provide them with your IRD number and prescribed investor rate. A common type of multi-rate PIE is your Kiwisaver scheme provider. If you do not provide the multi-rate PIE with your details, you will be taxed at the default rate of 28%.
PIE income and your end of year tax assessment
If you’ve been taxed at your correct prescribed investor rate, your PIE income is not included in your end of year tax return or assessment.
However, if your prescribed investor rate is too high and you overpay your tax, you cannot get a refund. If your rate is too low, you may have a tax bill.
Your multi-rate PIE income must be included in your end of year tax assessment if you have:
- used a prescribed investor rate that's too low
- been taxed at 0% because you exited a multi-rate PIE during a quarter
- chosen not to include your worldwide income as a new tax resident.
New residents include their worldwide income when working out their prescribed investor rate. You may choose not to account for worldwide income if you expect income in either of your first 2 resident years will be much 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.
Multi-rate PIEs generally need to provide details of your income by 31 May or 30 June of the following tax year. If you do not receive details from your multi-rate PIE or you think the investor statement is wrong, you need to contact the multi-rate PIE.
If your multi-rate PIE income has been taxed at 0% or if you have given a prescribed investor rate that is too low, you will need to keep records relating to that income for seven years.