Section RC 25 — Income Tax Act 2007: Consequences of change in balance date

RC 25 Consequences of change in balance date Continuing frequency (1) This section applies to a person liable to pay provisional tax who changes their balance date. Continuing to use instalment dates to new balance date (2) The person must continue to use the instalment dates that applied before the change in balance date was approved until the new balance date is reached. How amounts determined (3) Sections RC 20 to RC 24 and schedule 3, part B (Payment of provisional tax and terminal tax) apply for the person’s transitional year to determine the amount and payment date of the instalments. Estimation method (4) In a transitional year, if the person uses the estimation method, they must,— (a) before the date on which the Commissioner notifies a change in balance date, estimate the residual income tax as if no change in balance date is or will be approved; and (b) after the date on which the Commissioner notifies a change in balance date, re-estimate the residual income tax. GST ratio method (5) Subsection (6) applies if the person uses a GST ratio to determine the provisional tax payable for a tax year, and in changing their balance date, moves from— (a) a set of instalment dates in even-numbered months to a set of instalment dates in odd-numbered months; or (b) a set of instalment dates in odd-numbered months to a set of instalment dates in even-numbered months. Adjustment to liability (6) The person must— (a) adjust their provisional tax liability for the part-period of 1 month before the start of the new income year; and (b) pay the instalment of provisional tax for the part-period as their final taxable period— (i) 28 days after the end of the part period, unless subparagraph (ii) or (iii) applies; or (ii) by 15 January if the part-period falls in November; or (iii) by 7 May if the part period falls in March. Aligning taxable periods (7) For a registered person, if a change in balance date means that their taxable period is not aligned with the balance date, an adjustment must be made to their taxable period under section 15B(3) or 15C of the Goods and Services Tax Act 1985. Defined in this Act: amount , balance date , Commissioner , GST ratio , income year , instalment date , notify , pay , provisional tax , registered person , residual income tax , tax year , taxable period , transitional year , Compare: 2004 No 35 s MB 24 Section RC 25(6): substituted, on 1 April 2008, by section 536 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).