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Tax Administration Act 1994

Penalties - Civil penalties

142H: Failures of financial institutions to meet requirements under Part 11B and CRS applied standard

You could also call this:

"Financial institutions must follow rules or pay a penalty"

Illustration for Tax Administration Act 1994

If you are a financial institution, you must follow the rules under Part 11B and the CRS applied standard. If you fail to meet these rules, you may have to pay a penalty. You will have to pay $300 for each failure, unless you can prove it was outside your control. You are not liable to pay a penalty if the failure happened before 1 July 2019 and you made reasonable efforts to meet the rules. You must also make reasonable efforts to correct the failure within a reasonable time. If you fail to get self-certifications when opening a financial account, you may have to pay a penalty of $300 for each account. If you do not take reasonable care to meet the rules, you may have to pay a bigger penalty. This penalty can be $20,000 for the first failure and $40,000 for each further failure. The total amount of penalties you have to pay for a reporting period cannot be more than $10,000 for some penalties and $100,000 for others. You will have to pay the penalty by the due date, which is either 30 days after the Commissioner issues the notice or the date specified by the Commissioner. You can find more information about the rules under Part 11B by looking at the Part 11B section.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM7328820.

Topics:
Money and consumer rights > Banking and loansBusiness > Industry rules
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Part 9Penalties
Civil penalties

142HFailures of financial institutions to meet requirements under Part 11B and CRS applied standard

  1. If a financial institution fails to meet a requirement under Part 11B and the CRS applied standard for financial accounts maintained by the financial institution, other than a requirement referred to in subsection (3), the financial institution is liable to pay a penalty of $300 for each failure to which subsection (2) does not apply and for which no penalty under subsection (5) is imposed.

  2. A financial institution is not liable to pay a penalty under subsection (1) for a failure that—

  3. the financial institution proves is due to circumstances outside the control of the financial institution:
    1. occurs before 1 July 2019, if the Commissioner is satisfied that the financial institution makes reasonable efforts to meet the requirement and reasonable efforts to correct the failure within a reasonable period of time after the financial institution becomes aware of the failure.

      1. If a financial institution fails to meet a requirement under Part 11B and the CRS applied standard to obtain self-certifications when opening a financial account, the financial institution is liable to pay a penalty of $300 for each account if subsection (4) does not apply to the failure and no penalty under subsection (5) is imposed for the failure.

      2. A financial institution is not liable to pay a penalty under subsection (3) for a failure that occurs before 1 July 2019 for an account if the Commissioner is satisfied that the financial institution makes reasonable efforts to meet the requirement and makes reasonable efforts to correct the failure for the account within a reasonable period of time after the financial institution becomes aware of the failure.

      3. If a financial institution fails to take reasonable care to meet a requirement of a financial institution under Part 11B and the CRS applied standard for financial accounts, and no penalty under subsections (1) and (3) is imposed for the failure, the financial institution is liable to pay a penalty of—

      4. $20,000 for the first failure:
        1. $40,000 for each further failure.

          1. The total amount of penalties for a reporting period for which a financial institution is liable must not exceed—

          2. $10,000, for penalties under subsections (1) and (3):
            1. $100,000, for penalties under subsection (5).

              1. The due date for payment of a penalty imposed under this section is the later of—

              2. 30 days after the date on which the Commissioner issues the notice of assessment for the penalty:
                1. the date specified by the Commissioner in the notice of assessment as being the due date for payment of the penalty.

                  Notes
                  • Section 142H: inserted, on , by section 17 of the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 (2017 No 3).