IR8 Question 11 Initial provisional tax liability

A Maori authority has an initial provisional tax liability for a tax year if it:

starts to derive income from a taxable activity in the tax year, and
had not derived income from a taxable activity within the preceding four years, and
had residual income tax (RIT) $60,000 or more for the tax year.

If a Maori authority meets the above criteria it will have an initial provisional tax liability and interest will be calculated. Interest can be reduced by making voluntary payments.

Interest rules for an initial provisional tax liability

You may be charged interest from the first, second or third instalment date, if you have an initial provisional tax liability.

The instalment date that interest applies from is determined by the taxable activity start date.

More information about your initial provisional tax liability and the dates that interest applies from is available in our Provisional tax (IR289) guide.

There are special rules about how interest is calculated when an authority has an initial provisional tax liability and has changed its balance date. For further information see our Provisional tax (IR289) guide.