A Foreign Investor Variable Rate PIE (portfolio investment entity), is a type of fund structure that has specific attributes regarding tax.
The information below can be found on the IRD website.
Variable-rate PIEs invest their funds in New Zealand and offshore.
There is no New Zealand-based investment threshold for this type of PIE.
These PIEs apply the following rates based on the type and source of income:
All offshore income: 0%
Income under the financial arrangement rules other than interest: 0%
New Zealand interest income: 1.44%
New Zealand unimputed dividend income with an investor that is affected by our double tax agreements: 15%
New Zealand unimputed dividend income with an investor that is not affected by our double tax agreements: 30%
Any other New Zealand based income: 28%
A variable-rate PIE can sometimes treat the unimputed portion of New Zealand dividends as liable for non-resident withholding tax (NRWT). This allows a Notified foreign investor (NFI) to claim a tax credit in their country of residence. This income is not treated as PIE income.