HWI Chartered Accountants Auckland

The new rules:

Align provisional tax payment dates with GST payment dates and introduce the GST ratio option for calculating provisional tax payments.

The most important impact of the new rules is that the payment dates for provisional tax will change to the date GST payments are due. GST payment dates were changed back in 2007 from the last working day of the month to the 28th of the month. The exceptions to this are for GST taxable periods that end on 30 November, payment is due on 15th January, and GST taxable periods that end on 31 March, payment is now due on 7th May.

For most taxpayers provisional tax will continue to be paid in three instalments, however for taxpayers with a March balance date the due dates will change from the 7 July, 7 November & 7 March to 28 August, 15 January and 7 May. If the due date falls on a weekend or public holiday, it is extended to the next working day.

GST and provisional tax payments can now be made on one form (GST 103). If you have a GST refund for the period, the refund can be used to offset the provisional tax payment. HWI will continue to send you a separate payment slip so that you know what your provisional tax liability is.   You can elect to use this slip for payment or add the information to your GST return.

The number of provisional tax instalments in a year will depend on which option you use to calculate your provisional tax payments and your GST filing frequency. Generally, everyone will make three instalments unless:

You pay GST 6-monthly, in which case you will make two provisional tax instalments on the GST payment dates

You use the GST-ratio option, you will make 6 provisional tax instalments with each of your GST returns