Whai Rawa and Tax
Budget change to tax rates from 1 October 2010
What impact do the latest tax changes announced in the budget have on PIE and RSCT rates?
All PIE and RSCT rates will drop on 1 October. You can still update your rates now if they have changed as we will be doing a PIE tax calcaulation at the end of September 2010. When the changes come in on 1 October, whatever current rate we hold for you will automatically drop and you won't have to declare a new rate. The current rates and the rates they will drop to are as follows:
Rates for NZ Tax Residents
PIE Rates
| Current rate (%) | Rate after 1 October 2010 |
|---|---|
| 12.5 | 10.5 |
| 21 | 17.5 |
| 30 | 28 |
RSCT Rates
| Current rate (%) | Rate after 1 October 2010 |
|---|---|
| 12.5 | 10.5 |
| 21 | 17.5 |
| 33 | 30 |
| 38 | 33 |
What about rate for non NZ tax residents?
After 1 October the reates applying to non NZ tax residents providing an NZ IRD number will be: RSCT 10.5% & PIR 28%. Members not providing a NZ IRD number will be taxed at: RSCT 33% PIR 28%
From 1 April 2010 new tax rates come into effect for Whai Rawa. For most members these changes will have effect at the time of the next members payments and tax on earnings in March 2011. Members making withdrawals will also be affected.
Remember: If you do not supply the relevant tax rates and your IRD number you will be taxed at the default (maximum rates).
Follow the links below to make sure you are providing the correct information. Once you have calculated your rates update them by:
- Logging into the secure website and going to the Whai Rawa section
- Emailing us with your updated rates; or
- Phoning us on 0800 942 472 or fax 03 3638905.
Remember if you are not sure how to work out your rates we can help.
Work out your tax rates here
- NZ Residents need to provide an IRD number, a PIR rate and an RSCT rate
- Non NZ tax residents need to supply only an NZ IRD number
Not sure whether you are an NZ resident for tax purposes?
- Tax on Investment Returns into your Whai Rawa Account
- Retirement Scheme Contribution Tax (RSCT)
- Calculating your RSCT rate
- IRD Numbers
- Non NZ Tax Residents
- Tax on investment returns (PIE and PIR)
- Work out your Prescribed Investor Rate
Frequently asked Tax Questions
- What is a Māori Authority Tax Credit?
- What do I need to do now to make sure Whai Rawa contributions (Distributions and Matched Savings) from Te Rūnanga are correctly taxed?
- What is a PIE (Portfolio Investment Entity)?
- What is PIR (Prescribed Investor Rate)?
- What happens if I give you the wrong PIR or RSCT rate or if I don't give my IRD number?
- What if I am not a NZ Tax Resident?
- What happens if my PIR or RSCT rate changes?
- How do I find out my IRD number?
Tax on Investment Returns into your Whai Rawa Account
Whai Rawa is invested in a Portfolio Investment Entity (PIE), therefore members are taxed on investment returns at their Prescribed Investor Rate (PIR), either 12.5% or 21%.
Retirement Scheme Contribution Tax (RSCT)
Whai Rawa operates under the Retirement Scheme Contribution Tax (RSCT) rules. This means Te Rūnanga will deduct the tax payable on contributions it makes into Whai Rawa (such as distributions and matched savings) at the members' RSCT rate, provided members supply that rate and their IRD number.
The RSCT is a final tax meaning members will not be required to pay any further tax on their contributions from Te Rūnanga and will not have to file tax returns in relation to these contributions (MATC).
Please note:
- Te Rūnanga is able to offset by applying Māori Authority Tax Credits (at up to 19.5%) to any distribution and matched savings payment.
- RSCT is a 'final' tax. This means you will not be required to file a tax return in relation to Te Rūnanga contributions such as distributions and matched savings.
- If you do not supply us with both your IRD number and RSCT rate (NZ Residents only) your distribution and matched savings will be taxed at 38% (subject to offsetting of Māori Authority Tax Credits).
- Non residents are taxed at 12.5% provided they supply a NZ IRD number. If no NZ IRD number is supplied non residents will be taxed at 38%.
- If your income changes in the future you will need to advise us of those changes if it affects your RSCT rate (or PIR).
For more information about RSCT go here.
Calculate your Retirement Scheme Contribution Tax (RSCT) rate for the year ending 31 March 2010
The flow chart below shows how to calculate your Retirement Scheme Contribution Tax (RSCT) rate if you are a NZ resident:
Click to view a larger version of this chart »
IRD Numbers
To ensure that Whai Rawa members pay the correct amount of tax we require all members to supply us with their IRD number. Please note this includes child members and overseas residents.
Non NZ Tax Residents
Non Resident Members only need to supply an IRD number to have the correct default rates applied*.
We have set up a process to assist non NZ tax resident to obtain IRD numbers so they can be taxed at the correct rate as outlined in the forms below forms below:
- Procedure for non-resident adult members of Whai Rawa applying for IRD numbers from overseas:
- Procedure for non-resident child members of Whai Rawa applying for IRD numbers from overseas
As well as supplying the ID as outlined in these forms you will need to complete an IR595 and, if you are an account holder for a Whai Rawa child member, you will need to complete an IR595D Statutory Declaration.
PLEASE REMEMBER TO RETURN THE COMPLETED FORMS TO WHAI RAWA AT PO BOX 13046, CHRISTCHURCH or email to whairawa@ngaitahu.iwi.nz
* Whai Rawa will apply the following rates to those who declare themselves to be non resident members:
- PIR 30%
- RSCT rate 12.5% if IRD number supplied, otherwise 38%
Tax on investment returns (PIE and PIR)
Whai Rawa member individual accounts are pooled and invested into a Wholesale Cash Fund. This pooled Whai Rawa investment earns a return. Whai Rawa is a Portfolio Investment Entity (PIE) and therefore any returns are taxed within the rules relating to PIEs.
The rules relating to PIEs states that investors are able to declare their Prescribed Investor Rate (PIR), which is the rate used to calculate the tax for individuals.
Members can declare either a PIR of 12.5%, 21% or 30%.
Calculate your Prescribed Investor Rate (PIR) for the year ending 31 March 2011
There are three rates: 12.5%, 21% or 30%. Use the chart below to identify the correct rate for your circumstances.
Click to view a larger version of this chart »
Frequently asked Questions
What is a Māori Authority Tax Credit?
A Māori Authority Credit is similar to a company imputation credit. It is income tax paid by the Māori authority that may be passed on to a member by attaching it to a distribution, for the benefit of the member.
These credits are added to the distribution to calculate gross income to the member. The member receiving the distribution may then claim the Māori authority credits against their income tax liability.
This system helps stop the double taxation of a Māori authority distribution by effectively taxing the distribution once - in the Māori authority's income tax return.
What do I need to do now to make sure Whai Rawa contributions from Te Rūnanga are correctly taxed?
You need to supply us with both your IRD number and your RSCT rate. If you are a non NZ Tax resident you only need to supply your IRD number.
What is a PIE (Portfolio Investment Entity)?
These are collective investment vehicles which have adopted a new tax structure from 1 October 2007. This new structure allows investors taxable income from a PIE to be taxed at their prescribed investor rate to a maximum of 30%.
What is PIR (Prescribed Investor Rate)?
This is the rate that tax will be paid for you within a PIE. This rate reflects your income from salary, wages and any additional income and is currently either 19.5% or 30%.
What happens if I give you the wrong PIR or RSCT rate or if I don't give my IRD number?
If you do not advise us of a change in your prescribed investor rate or RSCT rate or provide us with the wrong rate you may have an obligation to file a tax return and pay further tax and penalties.
If you don't provide your IRD number you will be taxed at the higher rate of 30% on your PIE earnings and 38% on your Te Rūnanga contributions.
What if I am not a NZ Tax Resident?
Non Resident Members should not elect a PIR and RSCT rate, but should supply an IRD number. Whai Rawa will apply the following rates to those who declare themselves to be non resident members:
- PIR 30%
- RSCT rate 12.5% if IRD number supplied, otherwise 38%
We have set up a process to assist non NZ tax resident to obtain IRD numbers so they can be taxed at the correct rate. Please download these forms:
- Procedure for non-resident adult members of Whai Rawa applying for IRD numbers from overseas: IRD Number Adult
- Procedure for non-resident child members of Whai Rawa applying for IRD numbers from overseas: IRD Number Child
Follow the instructions to obtain an IRD number for yourself and anyone you are an account holder for. As outlined in the forms you will need to complete an IR595 and if you are an account holder for a Whai Rawa child member you will need to complete an IR595D Statutory Declaration.
PLEASE REMEMBER TO RETURN THE COMPLETED FORMS TO WHAI RAWA AT PO BOX 13-046, CHRISTCHURCH.
What happens if my PIR or RSCT rate changes?
It is very important that you tell us your correct Prescribed Investor Rate and RSCT rate and also tell us if your rates change.
If you do not advise us of a change in your rates or if you provide us with the wrong rates you may have an obligation to file a tax return and pay further tax and penalties.
How do I find out my IRD number?
If you don't know your IRD number, the easiest way to find it is to ask your employer for it or access it through the IRD on 0800 377 774 or www.ird.govt.nz