Guide to your tax statement

For investors with a 10.5%, 17.5% or 28.0% PIR rate (Investment Funds and KiwiSaver Plan)

The information included in your ‘PIE Tax Statement’ is for your reference only.

Below are summary explanations of various tax terms, designed to help you read and understand your ‘PIE Tax Statement’. If you have any queries about your specific tax situation, we recommend seeking independent tax advice.

Prescribed Investor Rate (PIR)

PIR is the rate used to calculate the tax on the income from your investment. For individuals, your PIR can be 10.5%, 17.5% or 28.0%. If you have not provided us with your PIR we are required to use 28.0%. Inland Revenue receives your PIE income details directly and displays it in your MyIR portal. If you are required to file a tax return, it will automatically include this information in the return. Inland Revenue will then verify if you were taxed at the correct PIR and make adjustments to your total tax position for the year accordingly. In the case of joint accounts with both members having IRD numbers, the IRD will divide the PIE income equally between each member.

If your recorded PIR is higher than your correct rate, any tax over-withheld will be used to reduce any income tax liability you may have for the tax year and any remaining amount will be rebated to you.

If your recorded PIR is lower than your correct rate, you are required to include the following information in your tax return:

‘taxable income or (loss)’;
‘total tax credits’; and
‘net tax paid or (rebated)’.

Taxable Income/(Loss)

This is the portion of income or loss earned on your investment that is taxable or refundable. The underlying fund performance may not align with your ‘taxable income or (loss)’ as not all income from your investment is taxable and not all losses refundable. This difference is because fund performance includes all gains and losses.

Gross Tax Payable/(Rebate)

Your ‘gross tax payable or (rebate)’ is your PIR multiplied by your ‘taxable income or (loss)’. This is the amount of tax payable or tax refund before tax credits have been included.

Tax Credits

This is the total amount of tax credits allocated to you. These are used to either offset your gross tax payable or to provide you with a refund. Available tax credits may include:

imputation credits;
resident withholding tax credits;
foreign tax credits; and
foreign dividend payment credits.

Tax Paid/(Rebated) on redemptions during the year

This is the amount of tax already paid on your behalf or refunded to you during the period. Any switch, transfer or withdrawal transaction is taxable. Your investment will be adjusted for tax by either cancelling or issuing units at the time of the transaction.

Net Tax Payable/(Rebate)

This is the amount of tax to be paid or refunded to you at the tax year end. Any income earned on your investment over the period may be taxable, and any loss incurred on your investment over the period may result in a rebate. Your investment will be adjusted for tax by either cancelling or issuing units at the tax year end.

For investors with a 0.0% PIR rate (Investment Funds only)

The information included in your ‘PIE Tax Statement’ is required to complete the details of your PIE investment income in your tax return.

Taxable Income or (Loss)

Total Imputation Credits

This is the total amount of credits allocated to you for the tax paid by any New Zealand companies (and certain Australian companies) on their profits and passed on to shareholders when paying a dividend. You can use these to offset your tax payable on your income but not to provide you with a refund. If you have excess imputation credits, it can be carried forward to offset in a later tax year.

Total Resident Withholding Tax Credits

This is the total amount of credits allocated to you for the tax withheld and paid on any New Zealand interest and dividend income. You can use these to offset your tax payable on your income or to provide you with a refund.

Total Foreign Tax Credits

This is the total amount of credits allocated to you for foreign income tax imposed on any income derived from overseas. You can use these to offset your tax payable on your income but not to provide you with a refund. If you have excess foreign tax credits, these are surrendered and can’t be carried forward to offset in a later tax year.

Total Foreign Dividend Payment Credits

This is the total amount of credits allocated to you for the tax paid by New Zealand companies on any dividends received from overseas. You can use these to offset your tax payable on your income or to provide you with a refund.

FAQ’s

Do I include taxable income and tax paid in my tax return?

You do not need to include this income in your tax return unless you had tax deducted at an incorrect rate or you are an investor on a 0% PIR.

What should I do if my PIR rate is wrong and I have paid too much or too little tax?

See Prescribed Investor Rate (PIR) section above

When/how can I change my PIR?

You can change your PIR at any time. You can do this on the online Client Portal and mobile app, under ‘Profile & Settings’. Alternatively you can email [email protected] to amend your PIR.

Why can my investment returns differ from taxable income on my PIE tax statement?

Your overall total investment return is made up of taxable income and non-taxable income. The tax statements relate only to taxable income.

Why does taxable income differ from my distribution amounts?

Distributions and taxable income are different elements within PIEs and can be different amounts. Distributions to your bank account are non-taxable events.