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Change to Provisional Tax

April 18, 2016

The Government has recently announced a number of proposals to simplify business tax. These are outlined in the Officials' Issues Paper Better Business Tax.

One of those proposals is a new way of calculating and paying provisional tax, called the Accounting Income Method (AIM). Under AIM, businesses with gross income less than $5m can use their accounting software to calculate their tax payments throughout the year. Tax payments will be based on accounting income instead of being a separate calculation. Businesses which choose to use AIM will make payments more regularly throughout the year. If they make the payments calculated by their software, they will not be liable for use of money interest.

AIM is a significant step forward in making tax part of running a business, rather than a separate process, and is a big change to the way the provisional tax system works now. This website provides information about how AIM could work, and asks questions about key issues. Please take a look at the proposals and give us your feedback - officials are keen to hear your views about how AIM should work. The AIM method will be implemented from 1 April 2018 and we will be updating this website with further questions for your feedback as the policy develops.


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