If you are a company with portfolio investment entity (PIE) status you have certain responsibilities.
Prescribed investor rates (PIR)
Resident companies are zero-rated investors, so their PIR is 0%. So long as they are not notified foreign investors in a foreign investment PIE, non-resident companies have a PIR of 28%.
A company that is resident in New Zealand can use a PIR of 0% from the date its New Zealand residency starts.
A company that is no longer a New Zealand resident should use a PIR of 28% from the date its New Zealand residency stopped.
When is PIE income received?
PIE income is income of the investor in the investor’s income year which includes the PIE’s income year.
If the company and the MRP have standard 31 March balance dates, the company will receive income in the same year the MRP attributes it.
If the company’s balance date is later than the PIE’s balance date the year in which the PIE income is attributed and the company receives it will be the same.
For example, the company has a 30 June 2024 balance date (its 2024 income year).
The MRP has a 31 March 2024 balance date.
Because the end of the MRP’s 2024 income year falls within the company’s 2024 income year, the income is also the company’s 2024 attributed income.
If the company’s balance date is earlier than the PIE’s balance date the year in which the PIE income is attributed and the company receives it will not be the same.
For example, the company has a 31 December 2023 balance date (its 2024 income year). The MRP has a 31 March 2024 balance date. Because the end of the MRP’s 2024 income year falls after the end of the company’s 2024 income year, the income falls into the company’s 2025 income year.
Distributions from a PIE
Dividends or distributions you get from an MRP are excluded income and are not included in the company’s tax return.
Dividends or distributions you get from listed PIE are excluded income, and are not included in the company’s tax return, to the extent that the dividend exceeds the fully imputed amount.
If a PIE makes a tax-free distribution to a company investor and the company passes the distribution on to its shareholders, the tax-free status does not carry through to the shareholder.
Record keeping
All records about the company’s investments must be kept for at least 7 years.