Portfolio Investment Entity (PIE)‚Äč

A PIE is an investment vehicle that invests contributions from investors.  PIEs will generally pay tax on investment income based on the prescribed investor rate 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 after 1 October 2010 are as follows:


Taxable income was $14,000 or less

If, in either of the previous two income years
your taxable income was $14,000 or less,
andwhen combined with your PIE income or loss
was ...

and ...

then Your PIR is ...

$48,000 or less in the income year

-

10.5%

$48,001 to $70,000 in the income year

you don't already quality for 10.5%

17.5%

$70,001 or more in both of the previous two income years


-

28%


Taxable income was $14,001 to $48,000

If in either of the previous two income years, your taxable income plus your PIE income or loss was:
  • $70,000 or less in the income year, your PIR is 17.5% or,
  • $70,001 or more in both of the previous two income years, your PIR is 28% 

Taxable income was more than $48,000
  • If your taxable income was more than $48,000 in both of the previous two income years, your PIR is 28%

Note:
  • If for the two previous income years you quality for two rates, your PIR is the lower rate
  • For example, last year your rate is 17.5%, the previous year's rate is 10.5%, so your PIR is 10.5%
 
Trusts

  • A trust has a choice of electing a PIR of 0%, 17.5% or 28%
  • A testamentary trust may also choose 10.5%

Companies
  • Companies only have one PIR which is 0%

Non-residents
  • Non-residents who invest in a foreign investment zero-rate PIE, may elect a PIR of 0%
  • Non-residents who invest in a foreign investment variable-rate PIE, may elevt a PIR ranging from 0% to 30%
  • Non-residents who are neither a notified foreign investor nor investing in a foreign investment PIE, must elect a PIR of 28%
  • A non-resident investor that meets the criteria and notifies their foreign investment PIE can become a notified foreign investor


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