Plain language law

New Zealand law explained for everyone

Tax Administration Act 1994

Interest - Specific provisions

120KB: Provisional tax instalments and due dates generally

You could also call this:

"Paying tax in parts: when and how you pay"

Illustration for Tax Administration Act 1994

You pay provisional tax in instalments. Your residual income tax is due and payable as set out in section RC 9 of the Income Tax Act 2007. You use only the current year residual income tax for the item residual income tax in section RC 10. You pay your residual income tax in 3 instalments if section RC 13(1)(b) or RC 14(1)(b) of the Income Tax Act 2007 applies to you. If you use a GST ratio to determine the amount of provisional tax payable, and an adjustment will change the amount payable, you can ask the Commissioner to make the adjustment and reassess your liability, as stated in section RC 8 of the Income Tax Act 2007. Residual income tax means your residual income tax for a tax year, as defined in section YA 1 of the Income Tax Act 2007. It can be increased by an amount calculated under section MF 6(2) of that Act. It can be reduced by an amount calculated under section LA 4(1) of that Act.

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 It might be out of date or be missing some parts.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

This page was last updated on

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM355312.

Topics:
Money and consumer rights > Taxes
Previous

120K: Instalments of and due dates for provisional tax, or

"Provisional tax: how and when to pay it"

Next

120KBB: Interest for most standard method provisional taxpayers, or

"Interest rules for people who pay tax in parts throughout the year"

Part 7Interest
Specific provisions

120KBProvisional tax instalments and due dates generally

  1. This section applies—

  2. in a tax year other than a transitional year:
    1. to a provisional taxpayer who is not a new provisional taxpayer.

      1. A provisional taxpayer's residual income tax is due and payable as set out in section RC 9 of the Income Tax Act 2007, but using only the current year residual income tax for the item residual income tax in section RC 10.

      2. Despite subsection (2), a provisional taxpayer’s residual income tax is due and payable in 3 instalments, on the dates of instalments B, D, and F for their corresponding income year, if section RC 13(1)(b) or RC 14(1)(b) of the Income Tax Act 2007 applies to the taxpayer.

      3. If a provisional taxpayer uses a GST ratio to determine the amount of provisional tax payable, and an adjustment to a base amount referred to in section RC 8 of the Income Tax Act 2007 will, or is likely to, change the amount payable, the taxpayer may ask the Commissioner to make the adjustment and reassess their liability.

      4. For the purposes of this section and sections 120KBB to 120KE, residual income tax means a person's residual income tax for a tax year as defined in section YA 1 of the Income Tax Act 2007—

      5. as increased by an amount calculated in relation to the person and the income year under section MF 6(2) of that Act; or
        1. as reduced by an amount calculated in relation to the person and the income year under section LA 4(1) of that Act.

          Notes
          • Section 120KB: inserted, on (applying for income years corresponding to 2008–09 and subsequent tax years), by section 243(1) of the Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 (2006 No 3).
          • Section 120KB(2): amended (with effect on 1 April 2017), on , by section 221(1) (and see section 221(2) for application) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).
          • Section 120KB(2B): inserted (with effect on 1 October 2007), on , by section 79(1) (and see section 79(2) for application) of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).
          • Section 120KB(3): 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 120KB(4): amended, on (applying for the 2017–18 and later income years), by section 114(1) of the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 (2017 No 3).
          • Section 120KB(4): 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 120KB(4)(a): 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 120KB(4)(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).