Add a PIE income workpaper to an IR3 Entity

Modified on Wed, 01 May 2024 at 03:00 PM

The PIE income workpaper in an IR3 entity calculates the PIE tax payable or receivable for an individual using their Prescribed Investor Rate (PIR).

Add a PIE income workpaper

  1. On the Workpapers page, click New Workpaper and select PIE income
  2. Enter the Portfolio Investment Entity income (loss).
  3. Enter the PIE tax (deducted) credited. 
  4. Select the Prescribed Investor Rate at year end.
  5. Select the Correct PIR rate.
  6. Click the appropriate response for Did the PIR change during the year?


A PIE income workpaper can also be added to an Income Statement account if the individual has a trial balance. 


Because the tax on PIE income is calculated using the PIR, the income is not included in the taxpayer’s Taxable Income.

Entering the PIE income

When a PIE investment yielded income, the income would have had tax withheld in the fund. The income should be entered as a positive in Portfolio Investment Entity income (loss) and the tax withheld should be entered as a negative in PIE tax (deducted) credited


If the PIE investment had a loss, it usually cashes out this loss and receives a refund at the PIR rate from Inland Revenue. The loss should be entered as a negative in Portfolio Investment Entity income (loss) and the credit refund should be entered as a positive in PIE tax (deducted) credited. 

Completing the PIE tax position

The following information on the workpaper is used to determine whether there is any PIE tax payable or receivable in relation to the PIE investments, and the amount of any payable or receivable. 


  • The Prescribed Investor Rate at year end is the PIR that was on record for the particular PIE investment at year end. 
  • The Correct PIR Rate is the taxpayer’s correct PIR. Changing this in one PIE workpaper will change it across all PIE workpapers because a taxpayer can only have one correct PIR for the tax year. 
  • Did the PIR change during the year is used to indicate whether the PIR for that particular PIE investment changed during the year from another rate to the Prescribed Investor Rate at year end. 


If a taxpayer holds more than one PIE investment, a new workpaper should be entered for each investment. This is because information such as the PIR at year end and whether the PIR changed during the year may differ across the PIE investments. 

The PIE tax calculation

  • Tax on PIE income is calculated based on the taxpayer’s Correct PIR, not their marginal tax rates. 
  • The calculation aggregates the PIE income (or losses) and applies the Correct PIR to the income. This figure is then compared to the actual PIE tax withheld.
  • If the difference is an amount payable, this is a PIE tax debit. This is added to the taxpayer’s Tax on Taxable Income in the tax return. 
  • If the difference is a refund, this is a PIE tax credit. This is reflected in the taxpayer’s Residual Income Tax in the tax return. 
  • Factors such as whether a PIE investment had a different PIR at year end to the Correct PIR, and whether a PIE investment had a PIR rate change during the year impact the outcome of the calculation. 
  • If the taxpayer had a PIE tax debit but had the correct PIR on all investments at year end and no investments had a PIR rate change during the year, the nothing would be payable. 
  • If a refund arises, it is always refunded.

File the correct PIR

From 2023 tax year onward, tax intermediaries can submit the Correct PIR to IR as part of a client’s IR3 return.


Update the Prescribed Investor Rate disclosure on the Tax Return > Provisional Tax tab to file the Correct PIR with the IR3. The Correct PIR is populated from the PIE income workpaper.



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