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Tax Administration Act 1994

Challenges

138P: Powers of hearing authority

You could also call this:

"What a hearing authority can decide about your tax"

Illustration for Tax Administration Act 1994

When you challenge a tax assessment, a hearing authority can make some decisions. They can confirm, cancel, or change an assessment, or change the amount of an assessment. They can also make a new assessment that the Commissioner could have made. If you bring a challenge and prove an assessment is too high by a certain amount, the hearing authority must reduce your assessment by that amount. The hearing authority can also tell the Commissioner to make a new assessment. They can direct the Commissioner to change a decision to match what the hearing authority decides. The Commissioner must change an assessment or decision to match the hearing authority's decision, but they do not have to do this until any appeals are finished. There are time limits for some tax decisions, but these do not apply to some decisions made by the hearing authority, such as changing an assessment or making a new one, as stated in sections 108, 108A, 108AB, and 108B. The Commissioner must follow the hearing authority's decision when making or changing an assessment. You can find more information about these rules in the Tax Administration Act 1994.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM355998.

Topics:
Money and consumer rights > Taxes
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138O: Transfer from small claims jurisdiction of Taxation Review Authority, or

"Moving a small tax claim to a different court"

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138Q: Challenges designated as test cases, or

"The Commissioner picks a challenge to help decide others like it."

Part 8AChallenges

138PPowers of hearing authority

  1. On hearing a challenge, a hearing authority may—

  2. confirm or cancel or vary an assessment, or reduce the amount of an assessment, or increase the amount of an assessment to the extent to which the Commissioner was able to make an assessment of an increased amount at the time the Commissioner made the assessment to which the challenge relates; or
    1. make an assessment which the Commissioner was able to make at the time the Commissioner made the assessment to which the challenge relates, or direct the Commissioner to make such an assessment.

      1. If a taxpayer brings a challenge and proves, on the balance of probabilities, that the amount of an assessment is excessive by a specific amount, a hearing authority must reduce the taxpayer's assessment by the specific amount.

      2. If the challenge relates to a disputable decision that is not an assessment, the hearing authority—

      3. must not make or alter the disputable decision; and
        1. may direct the Commissioner to alter the disputable decision to the extent necessary to conform to the decision of the hearing authority with the effect the hearing authority specifies.

          1. Subject to subsection (4), the Commissioner must make or amend an assessment or other disputable decision in such a way that it conforms to the hearing authority's determination.

          2. The Commissioner is not required to make or amend an assessment or other disputable decision before the resolution of appeal procedures from the hearing authority.

          3. The time bars in sections 108, 108A, 108AB, and 108B do not apply with respect to—

          4. a determination of a hearing authority made under subsection (1)(a) or subsection (1B) of this section or an amendment made by the Commissioner to an assessment for the purpose of conforming to such a determination; or
            1. an assessment made by a hearing authority under subsection (1)(b) or the Commissioner under subsection (3).

              Notes
              • Section 138P: inserted, on , by section 42 of the Tax Administration Amendment Act (No 2) 1996 (1996 No 56).
              • Section 138P(1B): inserted, on (applying to a challenge that is brought on or after 26 March 2003), by section 119(1) of the Taxation (Maori Organisations, Taxpayer Compliance and Miscellaneous Provisions) Act 2003 (2003 No 5).
              • Section 138P(3): amended, on (applying to 2002–03 and subsequent income years), by section 236(1) of the Taxation (Taxpayer Assessment and Miscellaneous Provisions) Act 2001 (2001 No 85).
              • Section 138P(4): amended, on (applying to 2002–03 and subsequent income years), by section 236(1) of the Taxation (Taxpayer Assessment and Miscellaneous Provisions) Act 2001 (2001 No 85).
              • Section 138P(5): amended, on , by section 210 of the Taxation (Annual Rates for 2021–22, GST, and Remedial Matters) Act 2022 (2022 No 10).
              • Section 138P(5)(a): amended, on (applying to a challenge that is brought on or after 26 March 2003), by section 119(2) of the Taxation (Maori Organisations, Taxpayer Compliance and Miscellaneous Provisions) Act 2003 (2003 No 5).
              • Section 138P(5)(a): amended, on (applying to 2002–03 and subsequent income years), by section 236(3) of the Taxation (Taxpayer Assessment and Miscellaneous Provisions) Act 2001 (2001 No 85).