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Income Tax Act 2007

General collection rules - General withholding and payment obligations

RA 12: Adjustment to correct errors: certain excess amounts

You could also call this:

“How to fix mistakes when too much tax is taken from your payment”

This section is about what happens when someone takes too much tax from a payment to you. Here’s what you need to know:

If someone takes too much RWT or NRWT from your payment by mistake, they can pay you back the extra amount. They have until 20 April after the end of the tax year to do this, as long as they haven’t already reported the details to Inland Revenue.

If they pay you back, that extra money isn’t considered tax anymore. If they don’t pay you back, they must tell you and Inland Revenue about the extra amount by 20 April. If they do pay you back, they just need to tell Inland Revenue.

If the extra amount has already been paid to Inland Revenue, you can get a refund. Or, the person who made the mistake can get the refund if they haven’t already taken it off a later tax payment to Inland Revenue.

If the person who made the mistake has paid you back but hasn’t got a refund from Inland Revenue yet, they can either take the amount off their next tax payment or ask for a refund.

However, if the extra amount was taken because of something you did wrong, the person must pay the full amount to Inland Revenue and doesn’t have to pay you back.

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1519751.

Topics:
Money and consumer rights > Taxes
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Part R General collection rules
General withholding and payment obligations

RA 12Adjustment to correct errors: certain excess amounts

  1. This section applies when—

  2. a person (the payer) is required to withhold and pay to the Commissioner an amount of RWT or NRWT for a payment to another person (the payee); and
    1. the payer, through an error, withholds an amount (the excess amount) that is more than the amount required under this Part.

      1. For a payment of resident passive income or non-resident passive income, the payer may pay the excess amount to the payee at any time before the 20th of April after the end of the tax year in which the amount is withheld if the payer has not reported to the payee under section 26C, 29, or 31 of the Tax Administration Act 1994, providing the details set out in those provisions.

      2. For the purposes of this section, when the payer pays the excess amount under subsection (2), the amount is no longer treated as RWT or NRWT, as applicable.

      3. If the payer has not refunded the amount to the payee, the payer must notify the following of the excess amount by the date referred to in subsection (2):

      4. the payee:
        1. the Commissioner.

          1. If the payer has refunded the amount to the payee, the payer must notify the Commissioner of the payment and of the amount of the refund at the time of paying the refund.

          2. If the excess amount has been paid to the Commissioner, the Commissioner must refund the amount of the overpayment to—

          3. the payee; or
            1. the payer, if they have not subtracted the amount under subsection (6)(a) from a later payment made in relation to the payee.

              1. For the purposes of subsection (5), if the payer has refunded the excess amount to the payee and has not received a refund from the Commissioner, the payer may—

              2. subtract the amount from an amount paid later to the Commissioner under section RE 21 or RF 13 (which relate to resident passive income and non-resident passive income), noting the action in the investment income information required under subpart 3E of the Tax Administration Act 1994; or
                1. apply for a refund of the amount under section RM 8 (Overpaid RWT or NRWT).

                  1. Despite subsections (2) and (5), if the excess amount arises from an act or omission by the payee, the payer must pay the full amount withheld to the Commissioner and is not liable to repay the excess amount to the payee or another person.

                  Compare
                  Notes
                  • Section RA 12(2) heading: replaced, on , by section 179(1) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
                  • Section RA 12(2): replaced, on , by section 179(1) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
                  • Section RA 12(3): amended, on , by section 179(2) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
                  • Section RA 12(4) heading: replaced, on , by section 179(3) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
                  • Section RA 12(4): replaced, on , by section 179(3) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
                  • Section RA 12(4B) heading: inserted, on , by section 179(3) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
                  • Section RA 12(4B): inserted, on , by section 179(3) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
                  • Section RA 12(6): amended, on , by section 179(4) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
                  • Section RA 12(6)(a): amended, on , by section 179(5) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
                  • Section RA 12 list of defined terms apply: inserted, on , by section 74 of the Taxation (Transformation: First Phase Simplification and Other Measures) Act 2016 (2016 No 27).
                  • Section RA 12 list of defined terms dividend: repealed, on , by section 179(6)(b) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
                  • Section RA 12 list of defined terms dividend treated as interest: repealed, on , by section 179(6)(b) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
                  • Section RA 12 list of defined terms interest: repealed, on , by section 179(6)(b) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
                  • Section RA 12 list of defined terms investment income information: inserted, on , by section 179(6)(a) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
                  • Section RA 12 list of defined terms Maori authority: repealed, on , by section 179(6)(b) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
                  • Section RA 12 list of defined terms notice: repealed, on , by section 179(6)(b) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
                  • Section RA 12 list of defined terms notify: inserted, on , by section 179(6)(a) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
                  • Section RA 12 list of defined terms RWT withholding certificate: repealed, on , by section 179(6)(b) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
                  • Section RA 12 list of defined terms shareholder dividend statement: repealed, on , by section 179(6)(b) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
                  • Section RA 12 list of defined terms taxable Maori authority distribution: repealed, on , by section 179(6)(b) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).