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Benefit fund portfolio investment entities (PIEs) are registered superannuation schemes under the Superannuation Scheme Act 1989 and compliant with section 15(1)(a) of the Act.

Paying tax

Benefit fund PIEs are taxed at the basic income tax rate that currently applies to the fund.

Benefit fund PIEs do not attribute income to investors. They cannot calculate tax liability using rates provided by investors (prescribed investor rates).

Benefit fund PIEs must file income tax returns annually.

Responsibilities of benefit fund PIEs

Benefit funds may also be contribution funds. These are known as hybrid funds.

Hybrid funds need to separate their benefit fund and contribution businesses to create two investor classes.

The benefit fund side of the hybrid treats its income as kept by the PIE and is taxed at 28%.

The contribution side can be treated as a multi-rate PIE.