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New provisional tax option for small businesses

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Small businesses that have turnover of less than $5 million a year can work out their provisional tax using the accounting income method (AIM).

AIM uses new functionality included in approved accounting software to work out payments. You can continue to use another provisional tax option if you think your business won't suit AIM. It will suit your business if you have:

  • irregular or seasonal income

  • accounting software or want to start using accounting software.

Once you've opted in to AIM you'll only pay provisional tax when your business makes a profit. This will help you to avoid cash flow problems.

As long as you make your payments in full and on time, there is no exposure to use-of-money interest. If your business makes a loss you can get your refund straightaway rather than waiting until the end of the year. Choosing AIM for your provisional tax

To choose AIM, complete the set up in your software. The set up will include a step where we'll confirm if you're eligible to use AIM. You shouldn't need to contact us.If you choose to use AIM, you must opt into this at the beginning of the tax year before your first payment would be due.

If you’re a new business (or new to paying provisional tax) you can opt into AIM at any time before your first payment would be due.

You can't choose AIM for a transitional year or if you're a:

  • partnership portfolio investment entity

  • superannuation fund

  • trust

  • Māori authority.

You're also excluded if you have foreign investment funds (FIF) or controlled foreign companies (CFC) attributed income.On your first due date send us your statement of activity through your software.

You'll also need to send your payment if there is one to make.

Taking Care of Business


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