PIE fund · PIE
Portfolio Investment Entity (PIE)
A tax-efficient New Zealand fund structure where investor tax is capped at the investor's Prescribed Investor Rate (PIR), with a maximum of 28%.
A Portfolio Investment Entity, or PIE, is a New Zealand fund structure introduced in 2007 to align retail-fund taxation with direct share ownership. Most NZ retail managed funds and KiwiSaver scheme funds are structured as PIEs.
Inside a PIE, capital gains on most NZ and Australian listed shares are not taxed. Income that *is* taxable (dividends, interest, foreign share gains) is taxed at the investor's Prescribed Investor Rate (PIR) of 10.5%, 17.5% or 28% — capped at 28%, even for investors on a 39% personal income-tax rate.
Because PIE tax is final at the investor's PIR, investors generally do not need to include PIE income in their personal tax return. There are exceptions — most importantly, if you have used the wrong PIR, the difference is squared up at year end (under-payment recovered, over-payment refunded under recent IRD rule changes).
Not every NZ-distributed fund is a PIE. Some Australian Unit Trusts available to NZ investors (e.g. certain Vanguard funds) are taxed under the Foreign Investment Fund (FIF) rules instead. ManagedFundsNZ flags FIF-only funds explicitly on each fund page.
Common questions
- Is a PIE the same as a fund?
- No — PIE is a tax structure that a managed fund or KiwiSaver scheme fund can use. A PIE is always a fund, but a fund is not always a PIE; some NZ-distributed funds are Australian Unit Trusts taxed under FIF rules.
- Why does PIE tax cap at 28%?
- When PIEs were introduced in 2007, the top personal income-tax rate was 39%. Capping PIE tax at 28% (then aligned to the company tax rate) was designed to make managed-fund investing tax-competitive with direct share ownership. The 28% cap has been retained even as the top personal rate has changed.
- Do I have to declare PIE income on my tax return?
- In most cases no — PIE tax is paid by the fund at your PIR and is final. The two main exceptions are (1) if you used the wrong PIR, and (2) PIE losses or income from a multi-rate PIE that you choose to include. Always check IRD guidance for your specific situation.
Primary sources
Related terms
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PIR
Prescribed Investor Rate (PIR)
The tax rate applied to your share of a PIE fund's taxable income. NZ has three PIRs: 10.5%, 17.5% and 28%. The maximum is 28%.
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FIF rules
Foreign Investment Fund (FIF)
A New Zealand tax regime that applies to NZ-resident investors who hold most foreign shares or non-PIE foreign investment funds outside specific exemption thresholds.
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PDS
Product Disclosure Statement (PDS)
The headline legal document a NZ managed fund or KiwiSaver scheme provides to retail investors, summarising the fund, fees, risks, and how to invest.
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SIPO
Statement of Investment Policy and Objectives (SIPO)
The fund-manager document setting out the fund's investment objectives, strategy, asset allocation ranges, and investment-policy constraints (including any responsible-investment screens).