Plain language law

New Zealand law explained for everyone

Tax Administration Act 1994

Penalties - Civil penalties

141G: Reduction in penalty for voluntary disclosure of tax shortfall

You could also call this:

"Telling the truth about tax mistakes can reduce your penalty"

Illustration for Tax Administration Act 1994

You might get a penalty if you do not pay the right amount of tax. If you tell the Commissioner about the mistake before they start checking, you might get a reduction in your penalty. The Commissioner decides if you get a reduction. You can tell the Commissioner about the mistake before or after they tell you they will be checking. If you tell them before, your penalty might be reduced by 100% or 75%. If you tell them after, your penalty might be reduced by 40%. The Commissioner will say what information you need to give them and how you need to give it. You are considered to have been told about a check if someone acting for you is told. A check starts when an officer from the department talks to you or looks at your information after you have been told about the check. You need to be honest and give the Commissioner all the details about the tax mistake.

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

This page was last updated on

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM356604.

Topics:
Money and consumer rights > Taxes
Previous

141FD: Shareholders of loss-attributing qualifying companies, or

"Rules for company shareholders and tax losses"

Next

141GB: Reduction of electronic sales suppression penalties, or

"Breaking rules with electronic sales tools? You might pay less if you own up"

Part 9Penalties
Civil penalties

141GReduction in penalty for voluntary disclosure of tax shortfall

  1. A shortfall penalty payable by a taxpayer under any of sections 141A to 141EB may be reduced if, in the Commissioner's opinion, the taxpayer makes a full voluntary disclosure to the Commissioner of all the details of the tax shortfall, either—

  2. before the taxpayer is first notified of a pending tax audit or investigation (referred to in this section as pre-notification disclosure); or
    1. after the taxpayer is notified of a pending tax audit or investigation, but before the Commissioner starts the audit or investigation (referred to in this section as post-notification disclosure).

      1. The Commissioner may from time to time—

      2. specify the information required for a full voluntary disclosure; and
        1. the form in which it must be provided.

          1. The level by which the shortfall penalty is reduced—

          2. for pre-notification disclosure is—
            1. 100%, if the shortfall penalty is for not taking reasonable care, for taking an unacceptable tax position, or for an unacceptable interpretation; or
              1. 75%, if subparagraph (i) does not apply:
              2. for post-notification disclosure is 40%.

                1. A taxpayer is deemed to have been notified of a pending tax audit or investigation, or that the tax audit or investigation has started, if—

                2. the taxpayer; or
                  1. an officer of the taxpayer; or
                    1. a shareholder of the taxpayer, if the taxpayer is a close company; or
                      1. a tax adviser acting for the taxpayer; or
                        1. a partner in partnership with the taxpayer; or
                          1. a person acting for or on behalf of or as a fiduciary of the taxpayer,—
                              1. is notified of the pending tax audit or investigation, or that the tax audit or investigation has started.

                            1. An audit or investigation starts at the earlier of—

                            2. the end of the first interview an officer of the department has with the taxpayer or the taxpayer's representative after the taxpayer receives the notice referred to in subsection (4); and
                              1. the time when—
                                1. an officer of the department inspects information (including books or records) of the taxpayer after the taxpayer receives the notice referred to in subsection (4); and
                                  1. the taxpayer is notified of the inspection.

                                  Notes
                                  • Section 141G: inserted, on , by section 43 of the Tax Administration Amendment Act (No 2) 1996 (1996 No 56).
                                  • Section 141G(1): amended, on (applying to an arrangement that a taxpayer enters into on or after 26 March 2003), by section 130(1) of the Taxation (Maori Organisations, Taxpayer Compliance and Miscellaneous Provisions) Act 2003 (2003 No 5).
                                  • Section 141G(3)(a): replaced (with effect on 17 May 2007), on (applying for voluntary disclosures made on or after 17 May 2007), by section 256(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).