Section RC 9 — Income Tax Act 2007: Provisional tax payable in instalments

RC 9 Provisional tax payable in instalments Who this section applies to (1) This section applies to a person who is liable to pay provisional tax. General principle (2) For a person liable to pay provisional tax using the standard and estimation methods, the amount of the provisional tax liability must be spread evenly over the applicable number of instalments, so that equal amounts are paid on each instalment date. If the full amount is not divisible into exactly equal instalments, the final instalment carries the difference. Provisional tax payable in 3 instalments (3) A person pays provisional tax in 3 instalments on the interest instalment dates for the tax year in the months set out in schedule 3, part A , columns B, D, and F (Payment of provisional tax and terminal tax) for the person’s corresponding income year. The amount of each instalment is calculated under section RC 10 . Subsection (4) overrides this subsection. Exclusions (4) Subsection (3) does not apply— (a) to a person liable to pay provisional tax who— (i) pays GST on a 6-monthly basis; or (ii) uses a GST ratio to determine the amount of provisional tax payable, or who changes their calculation method under section RC 18(5) ; or (iii) changes the cycle of their taxable periods under section 15C of the Goods and Services Tax Act 1985: (b) to a person with an initial provisional tax liability who— (i) pays GST on a 6-monthly basis; or (ii) pays GST on a monthly or 2-monthly basis, and starts a taxable activity within 30 days before the date of instalment B in their corresponding income year: (c) to a person liable to pay provisional tax who has not provided a return of income for the preceding tax year, and whose residual income tax for the tax year before the preceding tax year was $2,500 or less: (d) in a transitional year. Provisional tax when GST paid on 6-monthly basis (5) A person liable to pay provisional tax who pays GST on a 6-monthly basis must pay provisional tax on the 2 interest instalment dates for the tax year in the months set out in schedule 3, part A , columns C and F for their corresponding income year. This subsection applies to a person with an initial provisional tax liability other than 1 who pays GST on a 6-monthly basis and starts a taxable activity within 30 days before the date of instalment C. Provisional tax determined using GST ratio (6) A person liable to pay provisional tax who uses a GST ratio to determine the amount of provisional tax payable for a tax year, must pay provisional tax on the 6 ratio instalment dates in the months set out in schedule 3, part A , columns A to F for their corresponding income year. The amount of each instalment is calculated under section RC 11 . Changing calculation method (7) A person who is unable or who decides not to use a GST ratio, changing their calculation method under section RC 18 , must pay the provisional tax payable for the tax year on the relevant instalment dates under the replacement method. The amount of each instalment is calculated under section RC 10 . Changing cycle of taxable periods (8) A person who changes the cycle of their taxable periods under section 15C of the Goods and Services Tax Act 1985 must pay provisional tax for the tax year on the instalment dates set out in section RC 27 after the change in taxable period takes effect. The amount of each instalment is calculated under section RC 10 . Persons with initial provisional tax liability (9) A person with a new provisional tax liability who starts a taxable activity in a tax year is liable to pay interest calculated under section 120KC of the Tax Administration Act 1994 as if they were liable to pay provisional tax for the tax year— (a) in 3 instalments under subsection (3) if they start a taxable activity at some time in the period that starts at the beginning of the corresponding income year and ends 30 days before the date of instalment B: (b) in 2 instalments— (i) in a case to which section RC 13 applies; or (ii) if they pay GST on a 6-monthly basis and start a taxable activity at some time in the period that starts at the beginning of the corresponding income year and ends 30 days before the date of instalment C: (c) in 1 instalment in a case to which section RC 14 applies. Extension of time for return (10) A person who has not provided a return of income for a preceding tax year and whose residual income tax for the tax year before the preceding tax year was $2,500 or less must pay provisional tax for the tax year on the instalment dates set out in section RC 13 or RC 14 , as applicable. Transitional years (11) In a transitional year, provisional tax is payable as set out in section RC 21 and schedule 3, part B . The amount of each instalment is calculated under sections RC 22 to RC 24 . Voluntary payments (12) A person liable to pay provisional tax may pay an instalment under section RC 12 at any time. Defined in this Act: amount , corresponding income year , final instalment , GST , GST ratio , initial provisional tax liability , instalment date , interest instalment date , pay , provisional tax , ratio instalment date , residual income tax , return of income , tax year , taxable activity , taxable period , transitional year , Compare: 2004 No 35 s MB 8 Section RC 9(7): amended, on 1 April 2008, by section 529(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109). Section RC 9(9): amended, on 1 April 2008, by section 529(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109). Section RC 9(9)(b)(ii): substituted, on 1 April 2008, by section 529(3) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).