A PIE is a managed fund that aims to encourage savings for your retirement. Your KiwiSaver scheme might be a PIE.
When you invest in a PIE, you need to give them your IRD number. For new investments, you have 6 weeks to provide your IRD number or your account will be closed.
You’ll usually also need to choose a prescribed investor rate (PIR).
Prescribed investor rates (PIR)
The PIR you use depends on how much you have earned over the past 2 years.
The prescribed investor rates (PIR) are 10.5%, 17.5% and 28%. You cannot choose a PIR of 0%.
If you do not give your PIE your PIR, the default rate of 28% will be applied. If you do not give the correct PIR, you may have further tax to pay at the end of the year.
Find your prescribed investor rate
Withdrawing your investment
If you withdraw your entire investment during a quarter, you might have to pay tax at the end of the year. This can happen when your PIE files their returns quarterly and calculates your tax at 0% (zero-rate).