139CLate payment penalty and provisional tax

1. A late payment penalty will only arise on provisional tax that is unpaid at the expiry of an instalment date, or a Commissioner-set instalment date, to the extent that the provisional tax payable exceeds the provisional tax paid. Subsection (1B) overrides this subsection and subsection (1D) modifies this subsection.

2. Subsection (1C) applies if—

3. a person makes an election under section RM 11 of the Income Tax Act 2007 that an amount of a GST refund (elected amount) be used to pay an amount of provisional tax due on an instalment date; and
4. the Commissioner reassesses the amount of the GST refund as being less than the elected amount.

5. The person is not liable for a late payment penalty in relation to the amount of any shortfall in the person's payment of provisional tax that arises as a result of the reassessment referred to in subsection (1B) until—

6. the date that is 30 days after the date on which the Commissioner gives notice of the reassessment, if the Commissioner does not set a date under paragraph (b); or
7. a date set by the Commissioner that is later than the date referred to in paragraph (a).

8. Despite subsection (1), for a person that section 120KBB applies to, the only amount of unpaid tax for a failed instalment described in section 120KBB(3) is the amount of unpaid tax given by section 120KBB(3)(b) for the date. Subsection (1E) applies to the final instalment.

9. Despite subsection (1), for a person that section 120KBB applies to, the only amount of unpaid tax for a failed instalment that is the final instalment is the amount of unpaid tax that would be given by section 120KBB(3)(b) if that section applied to the final instalment.

10. In subsection (1)—

    Commissioner-set instalment date means a date specified by the Commissioner under section 119(4)(a)

    provisional tax paid, in respect of an instalment date or a Commissioner-set instalment date, means the amount of provisional tax paid by the provisional taxpayer on or before the instalment date or Commissioner-set instalment date, in relation to that instalment date or Commissioner-set instalment date; and includes any amount of provisional tax—

    1. paid in excess of the amount of provisional tax payable on any earlier instalment date or Commissioner-set instalment date for that tax year; and
    2. not credited to the amount of provisional tax payable on any earlier instalment date or Commissioner-set instalment date for that tax year

    provisional tax payable—

    1. in respect of an instalment date and a taxpayer to whom section RC 10 of the Income Tax Act 2007 applies, means the lesser of:
       1. the amount calculated as payable under section RC 10 of that Act; and
       2. the amount calculated as payable under section RC 10 of that Act if the taxpayer's residual income tax is substituted for the amount of provisional tax payable under section RC 5 of that Act:
    2. in respect of an instalment date and a taxpayer to whom sections RC 10 and RC 21 of the Income Tax Act 2007 applies, means the lesser of—
       1. the amount calculated as payable under sections RC 10 and RC 21 of that Act; and
       2. the amount calculated as payable under sections RC 10 and RC 21 of that Act if the taxpayer's residual income tax is substituted for item residual income tax in the formula in section RC 10(2) of that Act:
    3. for an instalment date and a taxpayer to whom section RC 11 of the Income Tax Act 2007 applies, means the lesser of—
       1. the amount calculated under section RC 11 of that Act:
       2. the amount calculated as payable under section RC 11 of that Act, if the GST ratio is substituted for a GST ratio which is calculated using the taxpayer's residual income tax for the tax year and taxable supplies for the corresponding income year:
    4. in respect of a Commissioner-set instalment date, means the provisional tax payable on the Commissioner-set instalment date in accordance with section 119(4)(a).