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Tax Administration Act 1994

Penalties - Civil penalties

139BA: Imposition of late payment penalties when financial relief sought

You could also call this:

"What happens to late payment penalties when you ask for help with unpaid tax"

Illustration for Tax Administration Act 1994

You have unpaid tax and ask for financial relief before the default date. The Commissioner must impose a late payment penalty on unpaid tax under section 139B(2)(a)(i). They must not impose the late payment penalty under section 139B(2)(a)(ii). You have unpaid tax and ask for financial relief on or after the default date. The Commissioner must not impose an incremental late payment penalty on unpaid tax on and after the date of the request. This applies until the Commissioner makes a decision or the response period ends. If you enter into an instalment arrangement, you will not get an incremental late payment penalty for a month if you comply with the arrangement. If the arrangement is cancelled due to false information, the Commissioner must impose the late payment penalties that were not imposed. If financial relief is not given, the Commissioner must impose the late payment penalties that were not imposed, as if the request for financial relief had not been made, according to section 177(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=DLM356156.

Topics:
Money and consumer rights > Taxes
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Part 9Penalties
Civil penalties

139BAImposition of late payment penalties when financial relief sought

  1. If a taxpayer has outstanding tax and asks for financial relief before the default date, the Commissioner must impose the late payment penalty under section 139B(2)(a)(i) on unpaid tax but must not impose the late payment penalty under section 139B(2)(a)(ii).

  2. If a taxpayer has outstanding tax and asks for financial relief on or after the default date, the Commissioner must not impose an incremental late payment penalty on unpaid tax on and after the date of the request.

  3. Subsections (1) and (2) apply until the earlier of—

  4. the date that the Commissioner makes a decision not to give financial relief; and
    1. the last day of the response period allowed by section 177(4) if the taxpayer does not provide the information sought or respond to a counter offer.

      1. If an instalment arrangement is entered into, an incremental late payment penalty is not to be added if, for a month during which the tax to pay remains unpaid, the taxpayer complies with all of their obligations under the arrangement.

      2. If an instalment arrangement is cancelled on the basis of false or misleading information provided by the taxpayer, the Commissioner must impose those late payment penalties not imposed as if the instalment arrangement had not been entered into.

      3. If financial relief is not given, the Commissioner must impose those late payment penalties not imposed as if the request for financial relief had not been made.

      Notes
      • Section 139BA: inserted, on (applying on and after 1 December 2002), by section 89(1) of the Taxation (Relief, Refunds and Miscellaneous Provisions) Act 2002 (2002 No 32).
      • Section 139BA(1): amended (with effect on 5 February 2017), on , by section 121(1) of the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 (2017 No 3).
      • Section 139BA(1): amended, on , by section 168(1) of the Taxation (Transformation: First Phase Simplification and Other Measures) Act 2016 (2016 No 27).
      • Section 139BA(1): amended, on (applying for unpaid tax that on or after 1 April 2008 becomes due for payment), by section 244(1)(a) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
      • Section 139BA(1): amended, on (applying for unpaid tax that on or after 1 April 2008 becomes due for payment), by section 244(1)(b) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
      • Section 139BA(2): amended (with effect on 5 February 2017), on , by section 121(2) of the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 (2017 No 3).
      • Section 139BA(2): amended, on , by section 168(2) of the Taxation (Transformation: First Phase Simplification and Other Measures) Act 2016 (2016 No 27).
      • Section 139BA(3)(b): replaced (with effect on 1 April 2008), on (applying for 2008–09 and later income years), by section 673(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).