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PIEs and PIRs

If a managed fund is a PIE (Portfolio Investment Entity), there are some important tax advantages.

(All KiwiSaver default schemes are PIEs, as well as many other KiwiSaver schemes and non-KiwiSaver superannuation schemes.)

PIE changes on the way

Changes to PIE tax rates take effect from 1 April 2010. For more information, visit the Inland Revenue website.

Lower tax on PIE income

In most cases, lower-income investors in PIEs will be taxed at 19.5% on their fund or scheme income.

Upper-income investors in the 39% tax bracket will pay only 30% tax on their PIE income.

Also, if:

  • Your non-PIE taxable income is below $38,000 a year, and
  • Your total taxable income - plus PIE income - is below $60,000 a year

Then all of your PIE income - including any amount above $38,000 - will be taxed at 19.5%.

The tax paid by a PIE on your behalf is in most cases a ‘final’ tax. If you normally don't file a tax return, you won't have to file one because you have invested in a PIE.

What is your PIR?

Each year the PIE will ask you what your tax rate will be for the coming year, and explain how to work that out. That rate - called your ‘Prescribed Investor Rate’ or PIR - will be either 19.5% or 30%. If you don't supply your PIR, the PIE will tax you at 30%.


If you hold PIE investments jointly with your spouse, de facto or civil union partner, tax will be calculated at whichever PIR is the highest.

For more information about PIEs and PIRs, visit the Inland Revenue website.