For those wondering about calculating their correct PIR rate, I suggest they look here
https://www.ird.govt.nz/pir
It does look like 777 is correct for FY2021 at least.
As for previous years, I think the documentation in IR855-2020 is ambiguous, given the different views on this topic expressed on this thread. Yes I can see the table says include 'your' taxable income and 'your' PIE income. But up until the start of FY2021 PIE income was not regarded as 'your' income for income tax purposes, unless you specifically chose to include it. So I would argue that undeclared PIE income is not 'your' income because it is not recognised as such by the IRD and so should not be included in any PIR calculation. To support my view, I note the instructions in IR855-2020:
"income from salary, wages and any additional sources of income you would include in your income tax return."
Now I ask the counter factual question, what sources of income are not included in your tax return? The only form of income I can think of that it is legal not to include in your tax return (prior to FY2021 at least) was PIE income. So I take this quote as a specific instruction NOT to include it UNLESS you choose to declare it, which is where the next sentence comes in.
"PIE attributed income will also be taken into account."
That means that if you choose to attribute this PIE income to yourself, it must be included. But if you don't (i.e. you leave it out of your tax return) the PIE income remains excluded for PIR calculation purposes. If anyone can see a flaw in my interpretation of what has been written in IR855-2020 please enlighten me. Until then I shall regard my interpretation of how to calculate PIR, historically, as correct.
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