Fire and Emergency New Zealand Act 2017

Levy - Avoidance arrangements and shortfall penalties - Shortfall penalties

103: Interpretation and other matters related to shortfall penalties

You could also call this:

"Understanding rules about penalties for incorrect payments"

Illustration for Fire and Emergency New Zealand Act 2017

When you read sections 103 to 111 of the Fire and Emergency New Zealand Act 2017, you need to understand some key terms. You will see terms like 'abusive levy position', 'acceptable levy position', 'gross carelessness', and 'unacceptable levy position'. These terms are defined in the Act to help you understand the rules about shortfall penalties. When you take a levy position, you must consider if it is acceptable or unacceptable at that time. You can find the definition of 'abusive levy position' in section 107(2) and the rules for sections 104 to 111 in those sections. If you make a mistake in your calculations, it might not be considered an unacceptable levy position. To determine if a levy position is acceptable or unacceptable, you must think about the rules in the Act and any relevant court decisions. You can find more information about filing returns in section 93. You should look at the rules and court decisions that were available when you took the levy position, not ones that came out later.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM7072983.

This page was last updated on 2 December 2025 — View changes

Topics:

Money and consumer rights > Taxes

102: FENZ’s power to determine liability for levy in case of levy avoidance arrangement, or

"FENZ can decide how much levy you pay if you try to avoid paying it"

104: Not taking reasonable care, or

"Paying a penalty for not being careful with levy payments"

Part 3Levy
Avoidance arrangements and shortfall penalties: Shortfall penalties

103Interpretation and other matters related to shortfall penalties

In this section and in sections 104 to 111,—
abusive levy position has the meaning given in section 107(2)
acceptable levy position means a levy position that meets the standard of being about as likely as not to be correct
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, and grossly careless has a corresponding meaning
unacceptable levy position—
1. means a levy position that, viewed objectively, fails to meet the standard of being about as likely as not to be correct; but
2. does not include a levy position that is taken merely because of a mistake in the calculation or recording of numbers used in, or for use in preparing, a return.
For the purposes of sections 104 to 111,—
whether a levy position is acceptable or unacceptable must be determined at the time at which the levy payer takes the levy position:
the time at which a levy payer takes a levy position in relation to a contract of insurance is—
1. the time at which the levy payer provides the return containing the levy position, if the levy payer provides a return in relation to the contract of insurance:
2. the last day on which a levy payer is able to file a return under section 93, if the levy payer does not provide a return in relation to the contract of insurance:
the matters that must be considered in determining whether a levy payer has taken an unacceptable levy position include—
1. the actual or potential application to the levy position of the provisions of this Part and of any regulations made under this Part that are relevant; and
2. any decision of a court on the interpretation of this Part and of any regulations made under this Part that is relevant (unless the decision was issued up to 1 month before the levy payer took the levy position).