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Tax Administration Act 1994

Assessments

119: Commissioner may determine amount of provisional tax

You could also call this:

"The Commissioner decides your provisional tax if you don't provide income information."

Illustration for Tax Administration Act 1994

The Commissioner can decide how much provisional tax you must pay for a tax year. This can happen if you do not give the Commissioner the information they need about your income. The Commissioner must tell you if they decide to change the amount of provisional tax you owe.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM354968.

Topics:
Money and consumer rights > Taxes
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119A: Amount of provisional tax based on 1997–98 or earlier income year, or

"Provisional tax based on old income years"

Part 6Assessments

119Commissioner may determine amount of provisional tax

  1. The Commissioner may at any time determine the amount that, in the opinion of the Commissioner, ought to be the provisional tax payable by a person for a tax year (being an amount greater than the amount that would otherwise be payable) where—

  2. the person defaults in furnishing the annual return of income required to be furnished for the immediately preceding tax year; or
    1. the Commissioner is not satisfied with a return made by the person for any of the 2 immediately preceding tax years; or
      1. the Commissioner has reason to believe that the person, although the person has not furnished a return, is a provisional taxpayer; or
        1. the taxpayer is using the AIM method and the approved AIM provider’s product that they are using calculates tax liabilities that are not reasonably accurate assessments of tax liabilities for the relevant income and expenditure; or
          1. the Commissioner considers that any estimate of residual income tax furnished by a taxpayer pursuant to section RC 7 of the Income Tax Act 2007 was not fair and reasonable—
            1. at the time the estimate was furnished; or
              1. on any instalment date; or
              2. the person is required, under sections RC 7 and RC 18(5) of that Act, to estimate their residual income tax for a tax year, and fails to provide an estimation or re-estimation to the Commissioner.

                1. The Commissioner may at any time determine the amount that, in the opinion of the Commissioner, ought to be the provisional tax payable by a provisional taxpayer for a tax year (being an amount greater or lesser than the amount that would otherwise be payable) where—

                  1. the Commissioner considers, by reason of any of sections HD 29(3), LJ 1, LK 1, and LK 6 of the Income Tax Act 2007, or by reason of any double tax agreement, that the provisional tax that would be payable by the person is excessive.

                    1. An amount of provisional tax determined by the Commissioner under subsection (1) shall not exceed the amount of provisional tax that would be payable if the taxpayer had not estimated.

                    2. Where the Commissioner determines an amount under subsection (1) or subsection (2), the Commissioner must give the taxpayer notice accordingly and, where the provisional tax payable by the taxpayer is increased under the determination,—

                    3. subject to paragraph (b), the amount of the consequent shortfall shall be due and payable by the taxpayer on such day as is specified in the notice, being a day not less than 30 days after the issuing of the notice; or
                      1. where the notice specifies that an estimate furnished by the taxpayer was not fair and reasonable, the consequent shortfall for any instalment date for which the estimate had effect, or would but for the determination have effect, shall be treated as being or having been due and payable by the taxpayer on that instalment date, except to the extent superseded by any further estimate or determination.

                        1. The amount of any provisional tax determined by the Commissioner in accordance with this section shall be open to objection under Part 8 or may be challenged under Part 8A.

                        Compare
                        • 1976 No 65 s 379
                        • 1993 No 17 s 71
                        Notes
                        • Section 119(1): amended, on (effective for 2005–06 tax year and later tax years, except when the context requires otherwise), by section YA 2 of the Income Tax Act 2004 (2004 No 35).
                        • Section 119(1)(a): amended, on (effective for 2005–06 tax year and later tax years, except when the context requires otherwise), by section YA 2 of the Income Tax Act 2004 (2004 No 35).
                        • Section 119(1)(b): amended, on (effective for 2005–06 tax year and later tax years, except when the context requires otherwise), by section YA 2 of the Income Tax Act 2004 (2004 No 35).
                        • Section 119(1)(cb): inserted, on (applying for the 2018–19 and later income years), by section 53(1) of the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 (2017 No 3).
                        • Section 119(1)(d): replaced, on (applying to 1998–99 and subsequent income years), by section 80(1) of the Taxation (Remedial Provisions) Act 1997 (1997 No 74).
                        • Section 119(1)(d): amended, on (effective for 2008–09 income year and later income years, unless the context requires otherwise), by section ZA 2 of the Income Tax Act 2007 (2007 No 97).
                        • Section 119(1)(d)(ii): amended, on (applying for income years corresponding to 2008–09 and subsequent tax years), by section 241(1)(b) of the Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 (2006 No 3).
                        • Section 119(1)(e): inserted, on (applying for income years corresponding to 2008–09 and subsequent tax years), by section 241(1)(b) of the Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 (2006 No 3).
                        • Section 119(1)(e): amended, on (effective for 2008–09 income year and later income years, unless the context requires otherwise), by section ZA 2 of the Income Tax Act 2007 (2007 No 97).
                        • Section 119(2): amended, on (effective for 2005–06 tax year and later tax years, except when the context requires otherwise), by section YA 2 of the Income Tax Act 2004 (2004 No 35).
                        • Section 119(2)(a): repealed, on (applying to 1998–99 and subsequent income years), by section 80(2) of the Taxation (Remedial Provisions) Act 1997 (1997 No 74).
                        • Section 119(2)(b): replaced, on , by section 81 of the Taxation (Remedial Provisions) Act 1997 (1997 No 74).
                        • Section 119(2)(b): amended, on (effective for 2008–09 income year and later income years, unless the context requires otherwise), by section ZA 2 of the Income Tax Act 2007 (2007 No 97).
                        • Section 119(3): replaced, on (applying to 1999–98 and subsequent income years), by section 80(3) of the Taxation (Remedial Provisions) Act 1997 (1997 No 74).
                        • Section 119(4): amended, on (effective for 2005–06 tax year and later tax years, except when the context requires otherwise), by section YA 2 of the Income Tax Act 2004 (2004 No 35).
                        • Section 119(5): amended, on , by section 34 of the Tax Administration Amendment Act (No 2) 1996 (1996 No 56).