This guide explains the tax rules relating to portfolio investment entity.
Since 1 October 2007, eligible entities can become portfolio investment entities (PIEs), which aren’t taxed on gains on shares in New Zealand and certain Australian companies. The aim is to encourage savings by lower and middle income earners who have been reluctant to save through collective investment vehicles (such as a managed fund).
PIEs generally pay tax on investment income based on the tax rates of their investors, rather than at a flat rate. Most PIEs fall into the multi-rate PIE (MRP) category, unless otherwise specified.