Table R1: Summary of instalment dates and calculation methods for provisional tax

Categories: ordinaryVariablesMethodInstalmentsInstalment datesCalculationInterest, penalties
Standard RC 5(2), (3)RC 63: RC 9(3)B, D, FRC 10120KBB, 120KE(1), (2)
Estimation RC 5(5)RC 73: RC 9(3)B, D, FRC 10120KB
AIM2 monthRC 7B6: RC 9(4B)(a) and (b)A, B, C, D, E, and F, or A1, B1, C1, D1, E1, F1RC 10B120KBC
RC 5(5B)1 monthRC 7B12: RC 9(4B)(c)A to F1RC 10B120KBC
GST ratio RC 5(6)1 monthRC 86: RC 9(6)A, B, C, D, E, and FRC 11120KE(3), 139C
2 monthRC 86: RC 9(6)A, B, C, D, E, and FRC 11120KE(3), 139C
GST 6-month RC 9(4)standardRC 62: RC 9(5)C and FRC 11120KE(1)
estimationRC 72: RC 9(5)C and FRC 11120KB
Categories: exceptional
Persons with initial provisional tax liabilityRC 6 or RC 7RC 9(9), RC 13(3), RC 14(2)D and F, or F as requiredRC 10 (RC 13(4)), RC 10 (RC 14(3))120KC
Transitional yearsRC 20RC 22 (RC 9(11))B, D, F, or C, F as requiredRC 22– RC 24120KC
Changing taxable period, or starting and stopping GST registrationRC 27, 15C, 15E (GST Act)RC 27 (RC 9(8))B, D, F, or C, F as requiredRC 26, RC 27120KD
Changing calculation methodRC 18RC 7(6), RC 9(7)B, D, F, or C, F as requiredRC 18120KE(5) –(7)
Voluntary paymentsRC 12120E
Note: references in the last column are to sections of the Tax Administration Act 1994.

Table R1: amended, on 1 April 2018, by section 38(1) (and see section 38(3) for application) of the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 (2017 No 3).

Table R1: amended, on 1 April 2018, by section 38(2) (and see section 38(3) for application) of the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 (2017 No 3).

Table R1: amended, on 1 April 2017 (applying for the 2017–18 and later income years), by section 85(1) of the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 (2017 No 3).

RC 10 Calculating amount of instalment under standard and estimation methods
When this section applies

(1)

This section applies for the purposes of—

(a)

section RC 5(2), (3), and (5) (which relates to the calculation of a provisional tax liability); and

(b)

section RC 9(3) and (5) (which relates to payment of instalments); and

(c)

sections RC 13 and RC 14 (which relate to persons with an initial provisional tax liability and those with an extension of time for providing a return); and

(d)

sections RC 26 and RC 27 (which relate to changes in taxable periods).

Calculation

(2)

The amount of an instalment of provisional tax is calculated using the formula—

(residual income tax × instalment number ÷ total instalments)
− provisional tax.

Definition of items in formula

(3)

In the formula,—

(a)

residual income tax is a person’s residual income tax, as applicable—

(i)

for the preceding tax year, uplifted by 5% (modified as applicable by sections RZ 5 (Calculating amounts under standard method: 2010–11 to 2012–13 income years) and RZ 5D (Standard method or GST method: transition for Maori authorities); or

(ii)

for the tax year before the preceding tax year, uplifted by 10% (modified as applicable by sections RZ 5 and RZ 5D); or

(iii)

the amount estimated by them:

(b)

instalment number is the number of the instalment for the tax year, whether first, second, or third:

(c)

total instalments is the total number of instalments for the tax year:

(d)

provisional tax is the amount of a person’s provisional tax liabilities for the tax year to date.

Instalment amounts after change in balance date or taxable period

(4)

If a change occurs to the balance date or cycle of a person’s taxable periods, the calculation of the amount of an instalment is made under this section, applying the updated figures to the items in the formula.

Some standard method taxpayers

(5)

A person who uses the standard method may, despite subsection (2), choose that the amount of their final instalment of provisional tax of a tax year is calculated using the following formula, if their expected RIT under subsection (6)(a) is $60,000 or more—

expected RIT − tax.

Definition of items in formula

(6)

In the formula,—

(a)

expected RIT is the person’s expectation of their residual income tax for the tax year:

(b)

tax is the amount of a person’s provisional tax liabilities for the tax year to date.

Truncation

(7)

An instalment calculated under this section is truncated to whole dollars, for example $10.98 equals $10.

Defined in this Act: amount, balance date, initial provisional tax liability, pay, provisional tax, residual income tax, return of income, tax year, taxable period

Compare: 2004 No 35 s MB 9

Section RC 10(1)(b): amended, on 1 April 2008, by section 530 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section RC 10(3)(a)(i): amended (with effect on 1 October 2010), on 21 December 2010, by section 123(a) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section RC 10(3)(a)(i): amended, on 1 October 2010, by section 27(a) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section RC 10(3)(a)(i): amended, on 1 October 2008, by section 41(a) of the Taxation (Personal Tax Cuts, Annual Rates, and Remedial Matters) Act 2008 (2008 No 36).

Section RC 10(3)(a)(ii): amended (with effect on 1 October 2010), on 21 December 2010, by section 123(b) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section RC 10(3)(a)(ii): amended, on 1 October 2010, by section 27(b) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section RC 10(3)(a)(ii): amended, on 1 October 2008, by section 41(b) of the Taxation (Personal Tax Cuts, Annual Rates, and Remedial Matters) Act 2008 (2008 No 36).

Section RC 10(5) heading: inserted (with effect on 1 April 2019), on 23 March 2020, by section 171(1) (and see section 171(3) for application) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).

Section RC 10(5): inserted (with effect on 1 April 2019), on 23 March 2020, by section 171(1) (and see section 171(3) for application) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).

Section RC 10(6) heading: inserted (with effect on 1 April 2019), on 23 March 2020, by section 171(1) (and see section 171(3) for application) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).

Section RC 10(6): inserted (with effect on 1 April 2019), on 23 March 2020, by section 171(1) (and see section 171(3) for application) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).

Section RC 10(7) heading: inserted (with effect on 1 April 2017), on 23 March 2020, by section 171(2) (and see section 171(4) for application) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).

Section RC 10(7): inserted (with effect on 1 April 2017), on 23 March 2020, by section 171(2) (and see section 171(4) for application) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).