A PIE is an investment vehicle that invests contributions from investors. For example, all KiwiSaver default schemes are PIEs.
PIEs will generally pay tax on investment income based on the prescribed investor rate (PIR) of their investors, rather than the tax rate of the entity.
The income from PIEs will either be excluded income where the income may not need to be included in a tax return, or non-excluded income where the income must be included in a tax return.
There are four prescribed investor rates (PIR) – 0%, 10.5%, 17,5% and 28%.
The rates for tax residents are:
| Your taxable income in either of the last two tax years was: | AND your total income (taxable income + PIE income) was: | Your PIR is: |
| $14,000 or less | $48,000 or less | 10.5% |
| $48,000 to $70,000 | 17.5% | |
| $70,001 or more | 28% | |
| $14,001 to $48,000 | $70,000 or less | 17.5% |
| $70,001 or more | 28% | |
| More than $48,000 | 28% |
Note: If for the two previous income years you quality for two rates, your PIR is the lower rate. For example, this year’s rate is 17.5% and the previous year’s rate is 10.5%, so your PIR is 10.5%.
