If you are a company with portfolio investment entity (PIE) status you have certain responsibilities.
Prescribed investor rates (PIR)
The PIR for resident companies is 0%. Non-resident companies have a PIR of 28% if they are not notified foreign investors.
A company that has become resident in New Zealand can apply a PIR of 0% from the date its New Zealand residency starts.
A company that ceases to be a New Zealand resident should apply a PIR of 28% from the date its New Zealand residency ceases.
Income attributed by the multi-rate PIE (MRP)
All income attributed to the company must be included in the company’s tax return.
A deduction is allowed for attributed losses and a credit will be allowed for attributed tax credits. The PIE cannot claim a tax credit attributed to zero-rated investors.
Dividends or distributions received from an MRP are excluded income and not included in the company’s tax return.
If a PIE makes a tax-free distribution to an investor and the company forwards the distribution on to its shareholders, the tax-free status does not carry through to the dividend.
If a company exits an MRP that files quarterly, any residual interest may be paid to us. This residual interest will be paid within one month of the quarter end for the exit period. The company will be entitled to a tax credit equal to the residual interest paid.
Information handling
If the company and the MRP have standard 31 March balance dates, the company will receive income in the same year the MRP attributes it.
If they have different balance dates, the company uses the income year that includes the end of the MRP income year.
All records relating to the company’s investments must be kept for at least 7 years.