Multi-rate PIEs are the most common type of portfolio investment entity (PIE). Their income is taxed at the prescribed investor rates (PIRs) of their investors.
Becoming a multi-rate PIE
You can register your company, superannuation fund or group investment fund as a multi-rate PIE if you meet the eligibility requirements for portfolio investment entities.
You need to register as a multi-rate PIE electronically, in myIR.
Eligibility to be a portfolio investment entity
Foreign investment multi-rate PIEs
Multi-rate PIEs may invest some or all of their funds overseas. Foreign investment PIEs are a type of multi-rate PIE that allows for special treatment of non-resident investors.
Foreign portfolio investment entity
Tax advantages and requirements
Most multi-rate PIEs need to attribute income, losses and tax credits to their investors. Investors pay tax based on their prescribed investor rates, which are capped at 28%. This encourages investors to invest in a multi-rate PIE rather than other types of managed fund where they would be taxed at the fund’s basic income tax rate.
Resident withholding tax (RWT) is not paid on multi-rate PIE income.
Multi-rate PIEs and prescribed investor rates
Filing methods
There are 3 filing methods you can choose from when you register as a multi-rate PIE.
Quarterly method
- Work out and pay your tax quarterly.
- File periodic returns quarterly, and you can choose to zero-rate any investors who exit the multi-rate PIE during a quarter.
Daily or exit method
- Work out your income and tax credits daily.
- File monthly periodic returns and calculate and pay tax for investors who exit the multi-rate PIE during a month.
- File your return to 31 March and calculate and pay tax for the year for the remainder of your investors.
Provisional method
- Work out your tax based on your investors' PIRs and pay provisional tax.
- File your income tax returns for the tax year to your balance date.
- Carry forward any losses, as these cannot be passed on to your investors.
- Foreign investment PIEs cannot choose to pay tax under this option.
Filing responsibilities
Your multi-rate PIE also files investor certificates and an annual reconciliation after the end of the tax year.
If you want to change your filing method, you need to tell us before the start of the next income year. The new filing method will start from the beginning of the new income year.
If an MRP wants to change its filing method, it needs to notify us before the start of the next income year. The new filing method will apply from the start of the new tax year.