Tax Administration Act 1994

Penalties - Civil penalties

141C: Gross carelessness

You could also call this:

"Getting a penalty for being very careless with your tax"

Illustration for Tax Administration Act 1994

You can get a penalty if you are grossly careless with your tax. This means doing something in a way that shows you do not care about the consequences. The penalty is 40% of the tax you owe. You are grossly careless if you do not think about the consequences of your actions. If you take an acceptable tax position, you are not being grossly careless. This is because you are doing what you think is right with your tax. Gross carelessness is when you show a high level of disregard for what might happen. You will have to pay a penalty if you are grossly careless with your tax. The penalty is a percentage of the tax you owe because of your carelessness.

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This page was last updated on 28 November 2025

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM356453.

Topics:

Money and consumer rights > Taxes

141B: Unacceptable tax position, or

"When You Take a Wrong Tax Position on Purpose"

141D: Abusive tax position, or

"When you try to avoid paying tax in a way that's not allowed"

Part 9Penalties
Civil penalties

141CGross carelessness

A taxpayer is liable to pay a shortfall penalty if the taxpayer is grossly careless in taking a taxpayer's tax position (referred to as gross carelessness).
The penalty payable for gross carelessness is 40% of the resulting tax shortfall.
For the purposes of this Part, gross carelessness means doing or not doing something in a way that, in all the circumstances, suggests or implies complete or a high level of disregard for the consequences.
A taxpayer who takes an acceptable tax position is also a taxpayer who has not been grossly careless in taking the taxpayer's tax position.

Notes

Section 141C: inserted, on 26 July 1996, by section 43 of the Tax Administration Amendment Act (No 2) 1996 (1996 No 56).
Section 141C(1): amended (with effect on 1 April 1997), on 23 September 1997, by section 95(1) of the Taxation (Remedial Provisions) Act 1997 (1997 No 74).
Section 141C(4): inserted (with effect on 1 April 1997), on 23 September 1997, by section 95(2) of the Taxation (Remedial Provisions) Act 1997 (1997 No 74).
Section 141C(4): amended, on 26 March 2003 (applying to a tax position that a taxpayer takes on or after 1 April 2003), by section 126(1) of the Taxation (Maori Organisations, Taxpayer Compliance and Miscellaneous Provisions) Act 2003 (2003 No 5).