Plain language law

New Zealand law explained for everyone

Tax Administration Act 1994

Remission, relief, and refunds

177B: Instalment arrangements

You could also call this:

"Paying tax in smaller amounts to avoid serious hardship"

Illustration for Tax Administration Act 1994

The Commissioner will not make an instalment arrangement with you if it would cause you serious hardship. You are a natural person, and the Commissioner must consider your situation. The Commissioner can decline an instalment arrangement if it does not help get the most tax owed from you. The Commissioner can also decline if you can pay all the tax owed now, or if you are being frivolous or vexatious. They can decline if you did not meet your obligations under a previous instalment arrangement. You can renegotiate an instalment arrangement at any time. The Commissioner can renegotiate an instalment arrangement after two years from when it started. Renegotiating an instalment arrangement is like making a new request for financial relief. The Commissioner can cancel an instalment arrangement if you gave false information or are not meeting your obligations. If you have an instalment arrangement and are meeting your obligations, you can choose to get a refund of tax credits instead of using them to pay tax owed, despite what section LA 6(2) of the Income Tax Act 2007 says. This means you can get some of your money back instead of using it to pay tax. You can make this choice if you are meeting your instalment arrangement obligations.

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 It might be out of date or be missing some parts.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=DLM358355.

Topics:
Money and consumer rights > Taxes
Previous

177A: How to apply serious hardship provisions, or

"Asking for help if paying tax would cause you serious financial trouble"

Next

177C: Write-off of tax by Commissioner, or

"When you can't pay tax, the Commissioner can write it off"

Part 11Remission, relief, and refunds

177BInstalment arrangements

  1. The Commissioner must not enter into an instalment arrangement with a taxpayer or a relief company to the extent that the arrangement would place the taxpayer, being a natural person, in serious hardship.

  2. The Commissioner may decline to enter into an instalment arrangement if—

  3. to do so would not maximise the recovery of outstanding tax from the taxpayer; or
    1. the Commissioner considers that the taxpayer is in a position to pay all of the outstanding tax immediately; or
      1. the taxpayer is being frivolous or vexatious; or
        1. the taxpayer has not met their obligations under a previous instalment arrangement.

          1. A taxpayer may renegotiate an instalment arrangement at any time.

          2. The Commissioner may renegotiate an instalment arrangement at any time after the end of 2 years from the date on which the instalment arrangement was entered.

          3. The renegotiation of an instalment arrangement is treated as if it were a new request for financial relief.

          4. The Commissioner may cancel an instalment arrangement if—

          5. it was entered into on the basis of false or misleading information provided by the taxpayer; or
            1. the taxpayer is not meeting their obligations under the arrangement.

              1. Despite section LA 6(2) of the Income Tax Act 2007, a taxpayer with an instalment arrangement who is meeting their obligations under it may choose to have an amount of refundable tax credit remaining for a tax year paid to them rather than used under the ordering rules set out in those sections.

              Notes
              • Section 177B: inserted, on , by section 92(1) of the Taxation (Relief, Refunds and Miscellaneous Provisions) Act 2002 (2002 No 32).
              • Section 177B(1): amended, on , by section 180 of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).
              • Section 177B(7): inserted (with effect on 1 April 2008), on (applying for 2008–09 and later income years), by section 693(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
              • Section 177B(7): amended (with effect on 1 April 2009), on , by section 207(1) (and see section 207(2) for application) of the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023 (2023 No 5).