Tax Administration Act 1994

Penalties - Civil penalties

141J: Limitation on reduction of shortfall penalty

You could also call this:

"How to reduce a penalty for not paying the right amount of tax"

Illustration for Tax Administration Act 1994

You have a shortfall penalty if you do not pay the right amount of tax. This section helps you understand how the penalty might be reduced. You can get a reduction if you make a voluntary disclosure and the penalty is for a temporary tax shortfall. You might get a 100% reduction if you did not take reasonable care or took an unacceptable tax position, and you disclose the tax shortfall before a tax audit or investigation. You can find more information about this in section 141G. If this does not apply, you might get a 75% reduction. The reduction applies if the penalty would be reduced under section 141G or section 141H without this section.

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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=DLM356615.

141I: Reduction where temporary shortfall, or

"Lower penalty for temporary tax mistakes"

141JAA: Shortfall penalty for not taking reasonable care or for taking unacceptable tax position may not be more than $50,000, or

"You can't be charged more than $50,000 if you make a tax mistake and own up to it."

Part 9Penalties
Civil penalties

141JLimitation on reduction of shortfall penalty

This section applies to a shortfall penalty payable by a taxpayer if—
the taxpayer makes a voluntary disclosure; and
the shortfall penalty is payable in respect of a temporary tax shortfall; and
the shortfall penalty would be reduced under section 141G or 141H in the absence of this section.

The shortfall penalty is reduced by—
100%, if—
1. the shortfall penalty is for not taking reasonable care, for taking an unacceptable tax position, or for taking a tax position involving an unacceptable interpretation of a tax law; and
2. the tax shortfall is voluntarily disclosed under section 141G before notification of a pending tax audit or investigation; or
75%, if paragraph (a) does not apply.

Repealed

Notes

Section 141J(1): replaced (with effect on 17 May 2007), on 19 December 2007 (applying for voluntary disclosures made on or after 17 May 2007), by section 258(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section 141J(2): inserted (with effect on 17 May 2007), on 19 December 2007 (applying for voluntary disclosures made on or after 17 May 2007), by section 258(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section 141J(3): repealed (with effect on 17 May 2007), on 6 October 2009 (applying for voluntary disclosures made on or after 17 May 2007), by section 684(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).