Section RC 22 — Income Tax Act 2007: Calculating instalments in transitional years: standard method

RC 22 Calculating instalments in transitional years: standard method When this section applies (1) This section applies to a person liable to pay provisional tax using the standard method in relation to instalments of provisional tax payable in a transitional year under section RC 21 . Instalment other than final instalment (2) For an instalment date other than the date of the final instalment, the person must pay an amount calculated using the formula— person's provisional tax × instalments payable − tax previously payable. total instalments Definition of items in formula (3) In the formula in subsection (2),— (a) person’s provisional tax is the person’s provisional tax liability under section RC 5(2) or (3) : (b) instalments payable is the number of instalments that the person has in the transitional year on or before the instalment date: (c) total instalments is whichever of the following applies: (i) 3, for a person who pays on instalment dates B, D, and F; or (ii) 2, for a person who pays on instalment dates C and F: (d) tax previously payable is the amount for the transitional year of the person’s provisional tax payable before the instalment date. Final instalment (4) For the final instalment, the person must pay an amount calculated using the formula— person's provisional tax × transitional year days − tax previously payable. preceding year days Definition of items in formula (5) In the formula in subsection (4),— (a) person’s provisional tax is the person’s provisional tax liability under section RC 5(2) or (3) : (b) transitional year days is the number of days in the person’s transitional year: (c) preceding year days is the number of days in the person’s preceding tax year: (d) tax previously payable is the amount of provisional tax for a tax year calculated on the basis of the person’s transitional year that is payable before the instalment date. Defined in this Act: amount , instalment date , final instalment , pay , provisional tax , tax year , transitional year , Compare: 2004 No 35 s MB 21