Safe harbour - what is it?

The safe harbour rule defines the threshold at which IR use of money interest (UOMI) applies if income taxes for the year are underpaid.

Who does the safe harbour rule apply to?

The safe harbour rules in NZ apply to taxpayers with residual income tax (RIT) of less than $60,000, calculated using the standard uplift method. If a taxpayer meets the safe harbour criteria, Inland Revenue will only charge interest on any unpaid taxes from the taxpayer’s terminal tax date onwards.

Current safe harbour rules in NZ

Before April 1 2022, taxpayers within the safe harbour threshold needed to pay their provisional taxes in full and on time. Inland Revenue removed this requirement from the beginning of the 2023 income year.

Taxpayers can also use the safe harbour rules during their first year of business when their residual income tax is less than $60,000.

This description is correct as of February 27, 2023.

More useful tips and guides for paying tax

We’re here to support you with flexible and innovative tax solutions. 

How to calculate provisional tax using the Standard Uplift Method and use tax pooling to avoid IR UOMI and late payment penalties

Current version available for download: October 2022
Previously published version(s): August 2019, February 2020