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Tax Administration Act 1994

Interest - Specific provisions

120L: Meaning of unpaid tax and overpaid tax for provisional tax purposes

You could also call this:

"What unpaid and overpaid tax means when paying tax before the end of the year"

Illustration for Tax Administration Act 1994

When you are working out how much unpaid tax and overpaid tax you have for a tax year, you need to calculate your residual income tax. You do this in accordance with the definition in section 120KB(4). If you make a payment, the Commissioner will apply it to the earliest instalment date that you still owe money on. If you have unpaid tax, the Commissioner will apply your payment to the earliest date first. They will keep doing this until your payment is used up. For this section, provisional tax includes any late payment penalties you owe. Provisional tax is a type of tax you pay before you know your total tax for the year. The Commissioner will use your payment to pay off your provisional tax, including any penalties. You can find more information about residual income tax in section 120KB(4).

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM355316.

Topics:
Money and consumer rights > Taxes
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Part 7Interest
Specific provisions

120LMeaning of unpaid tax and overpaid tax for provisional tax purposes

  1. For the purposes of determining amounts of unpaid tax and overpaid tax in respect of instalment dates for a tax year, a taxpayer's residual income tax is to be calculated in accordance with the definition of that term in section 120KB(4).

  2. If a taxpayer makes a payment, the Commissioner must apply the payment towards the provisional tax that is due on the earliest instalment date on which there is an unpaid amount, and then in order from earliest to latest.

  3. For the purposes of this section, provisional tax includes late payment penalties charged in relation to the provisional tax.

  4. Repealed
Notes
  • Section 120L: inserted, on , by section 36(1) of the Tax Administration Amendment Act (No 2) 1996 (1996 No 56).
  • Section 120L(1): amended, on (applying for income years corresponding to 2008–09 and subsequent tax years), by section 244(1) of the Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 (2006 No 3).
  • Section 120L(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 120L(2): replaced (with effect on 1 April 2018), on , by section 224(1) (and see section 224(4) for application) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).
  • Section 120L(2B): inserted, on , by section 224(2) (and see section 224(5) for application) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).
  • Section 120L(3): repealed (with effect on 1 April 2018), on , by section 224(3) (and see section 224(4) for application) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).