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Income Tax Act 2007

General collection rules - Provisional tax - Table R1: Summary of instalment dates and calculation methods for provisional tax

RC 17: When GST ratio must not be used

You could also call this:

“Situations when you must stop using a GST ratio for tax payments”

You must stop using a GST ratio for a tax year and use a different method if:

Your GST registration ends during the tax year.

You no longer qualify to use the GST ratio because of changes to your income tax or GST for the previous year.

Your income tax for the current year, as shown in your tax return, means you can’t use the GST ratio anymore.

Your taxable period changes and you no longer qualify to use the GST ratio.

You also can’t use a GST ratio if you need to file a GST return but don’t do it within 60 days of when it’s due. If this happens, you have to use a different method to pay your provisional tax.

However, if you have a good reason for not filing your GST return on time, you can ask the Commissioner if you can keep using the GST ratio. The Commissioner will decide based on whether the reason was out of your control, if it’s a good excuse, and if you fixed the problem as soon as you could.

If the Commissioner says yes, you can keep using the GST ratio. But if you miss another return after this, you might have to stop using it again.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1519848.

Topics:
Money and consumer rights > Taxes
Previous

RC 16: Who may use GST ratio?, or

“Requirements for using GST ratio to calculate provisional tax”

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RC 18: Changing calculation method, or

“How to change your method for calculating provisional tax”

Part R General collection rules
Provisional tax: Table R1: Summary of instalment dates and calculation methods for provisional tax

RC 17When GST ratio must not be used

  1. Despite section RC 16, a person must stop using a GST ratio for a tax year and must apply section RC 18(4) or (5) if—

  2. their GST registration ends under section 52 of the Goods and Services Tax Act 1985 in the tax year; or
    1. they no longer qualify under section RC 16(2) as a result of an amended assessment of their income tax liability or their GST liability for the preceding tax year; or
      1. their residual income tax, as disclosed in a return of income filed in the tax year, means they no longer meet the requirements of section RC 16(2); or
        1. they no longer qualify under section RC 16(3) as a result of a change in their taxable period.

          1. A person must not use, or must stop using, a GST ratio for a tax year if they—

          2. are liable to provide a return under the Goods and Services Tax Act 1985 for a period in their corresponding income year; and
            1. do not file the return within 60 days after the due date for filing the return.

              1. A person who is required by subsection (2) to stop using a GST ratio must pay the provisional tax instalments required under section RC 18 for an instalment period beginning on or after the due date for filing the return referred to in subsection (2) that is not the subject of notification under subsection (4).

              2. Despite subsections (2) and (3), a person may use a GST ratio for an instalment period referred to in subsection (3) if—

              3. they ask the Commissioner; and
                1. the Commissioner considers—
                  1. the failure to file the return is caused by an event or circumstance beyond the person’s control; and
                    1. the event or circumstance provides reasonable justification or excuse for the failure; and
                      1. the person remedied the failure as soon as practicable; and
                      2. the Commissioner notifies the person that they may use the GST ratio for the instalment period.

                        1. For the purposes of subsection (4)(b), the Commissioner must use the same approach that would be used to justify the remission of a penalty under section 183A of the Tax Administration Act 1994.

                        2. Notification under subsection (4) does not apply to an instalment period if—

                        3. the person fails to file a return due after the date of the notice unless the failure is anticipated and referred to in the notice; and
                          1. the instalment period begins on or after the due date of the return described in paragraph (a).

                            Compare
                            Notes
                            • Section RC 17(1)(bb): inserted, on (applying for the 2016–17 and later income years), by section 222(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
                            • Section RC 17(4)(a): replaced, on , by section 52(1) of the Taxation (Transformation: First Phase Simplification and Other Measures) Act 2016 (2016 No 27).
                            • Section RC 17 list of defined terms ask: inserted, on , by section 52(2) of the Taxation (Transformation: First Phase Simplification and Other Measures) Act 2016 (2016 No 27).
                            • Section RC 17 list of defined terms notice: inserted, on , by section 52(2) of the Taxation (Transformation: First Phase Simplification and Other Measures) Act 2016 (2016 No 27).
                            • Section RC 17 list of defined terms residual income tax: inserted, on , by section 222(2) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
                            • Section RC 17 list of defined terms return of income: inserted, on , by section 222(2) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).