Short paid your Tax ? What is the latest you could pay any short paid 2024 provisional and/or terminal tax without incurring penalties and how ? Answer this could be the 18th June 2025 if you were to purchase some tax credits from a “Tax pooling” IRD approved intermediary.
Yes tax credits are sold by approved intermediaries who have funds, “Tax Pools”, sitting with the IRD that they can transfer to your income tax account on the date it was due. You pay the Tax Pool Intermediary the tax due plus an interest fee say 1% to 2 % lower than the IRD would charge you and save by not incurring late payment penalties. The IRD’s current interest rate is 10.88% which is dropping to 9.89% on the 8th May 2025.
Finance Option – If you are forward looking you could retain your 2026 provisional tax for working capital and enter into a financing agreement to pay the Tax pooling intermediary as late as the 18th June 2027. The finance rate is competitive with rates as low as 5% pa. So rather than paying 2026 Provisional tax on the 28 August 2025, 15 January 2026 and 7th May 2026 you pay the Tax Pooling Intermediary on the 18th June 2027 plus interest.
The Finance option and the Buying Tax credits only applies to Income tax.
IRD Review and Reassessment – If you are reassessed for any tax type and have a tax bill that is now old and late there is no time bar on how far back you can buy the tax credits to cover the debt. Tax Pool Intermediaries are holding tax credits that go back over 10 years.
Deposits – For the tax pool to work there needs to be organisations or individuals willing to deposit funds in the Tax Pool. Their return is around what the IRD pays for overpaid taxes currently the rate the IRD pay is 4.3% dropping to 3.27% on the 8th May 2025. If the funds they deposit are utilised by a Buyer or Borrower they earn an extra margin above that.