PROVISIONAL TAX CHANGES

Aug 8, 2017

From the 2018 income year (that is, 1 April 2017 onwards), the safe harbour threshold has been increased! Hooray, I hear you say. It’s gone from $50,000 to $60,000. It has also been extended to non-individual taxpayers e.g. companies. 

What does this mean? Use of Money Interest (UOMI) will only be payable from terminal tax date* for natural persons and non-individuals where their residual income tax liability is less than $60,000 and the following requirements have been met:

The taxpayer must have:

  • Paid all provisional tax instalments under the standard# methods on time,
  • Not estimated their Residual Income Tax (RIT), and
  • Not used the GST ratio method.

There are a couple of other points: The requirement that they must not have held an RWT exemption certificate at any time during the year has been removed. Oh, and there is an anti-avoidance rule as well, so that you can’t manipulate your incomes to fall within the safe harbour provisions.

See this article for the 2020 changes to provisional tax. Basically, you’ll have to pay provisional tax if you had to pay more than $5,000 tax at the end of the year from your last return. $2,500 was the threshold for years before the 2020 return


* Terminal tax date is either 7th February if you do not have an accountant or tax agent OR 7th April if you have an accountant or tax agent who has an extension of time on your behalf…. more info
# Standard method is last years residual income tax + 5%, OR your residual income from two years ago + 10% (only if you haven’t filed last year’s return yet)… more info

Recent Posts

NEW TAX RATES IN NZ

Yes! New tax rates in...

SHARE MARKET VOLATILITY AND EFFECTS ON PROPERTY PRICES AND INFLATION

The Interplay of Share Market...

WHERE WILL INTEREST RATES IN NEW ZEALAND GO NEXT?

Where will interest rates in...

RETIREMENT PLANNING – HOW TO ESCAPE THE POVERTY CYCLE

Retirement Planning Strategies to Escape...

RENTAL PROPERTY ACCOUNTANT AUCKLAND

Navigating the Maze of Rental...

THE FOUR KEY ELEMENTS TO INVESTMENT PROPERTY THAT YOU MUST GET RIGHT

What are the four key...

Useful Links

Contact Details

Phone: 0800-890-132
Email: support@epsomtax.com
Fax: +64 28-255-08279

EpsomT​ax.com © 2021