If your terminal tax is over $5,000, you are required to prepay the Provisional Tax for the following year.
If you have paid each instalment of Provisional Tax on time and in full for that year (you qualify for Safe Harbour) but the actual year-end terminal tax payable for that year is greater than the Provisional Tax you have paid, IRD will accrue UOMI interest from the last Provisional Tax due date 7 May 2024 (if terminal tax is over $60,000), or the Terminal Tax due date 7 April 2024 (if Terminal tax is less than $60,000).
However, if you did not pay each instalment of Provisional Tax on time and in full for that year, the UOMI interest will accrue from the first missing or underpaid instalment due date.
If you have paid each instalment of withholding tax in full and on time, but the terminal tax is more than the provisional tax paid, we will work out how much UOMI accrued for you. However, if you missed or underpaid any Provisional Tax instalment, the additional penalty and interest amount are not available until IRD processes your tax return.
If you expect your income for the current year to be higher than last year, in addition to paying each Provisional Tax on time and in full, take the initiative to pay an appropriate amount of additional tax before April 7 to avoid paying interest and penalties to the tax office.
To avoid unexpected interest and pay your provisional tax on time, you are welcome to contact us at any time. We provide professional consultation services. If you are facing IRD tax penalties and need expert tips, we are here to help at any time.
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