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Fire and Emergency New Zealand Act 2017

Levy - Avoidance arrangements and shortfall penalties - Shortfall penalties

107: Abusive levy position

You could also call this:

"Paying a penalty for trying to avoid paying a levy in an unfair way"

Illustration for Fire and Emergency New Zealand Act 2017

You have to pay a shortfall penalty if you take a levy position that results in a levy shortfall and that position is abusive. An abusive levy position is one that is unacceptable at the time it is taken. You take this position to avoid paying levy, either directly or indirectly. You can avoid paying levy by entering into an arrangement with the main purpose of avoiding levy. Alternatively, you can take a levy position with the main purpose of avoiding levy. If you do this, you have to pay a shortfall penalty. The shortfall penalty is 100% of the levy shortfall if you take an abusive levy position that results in a levy shortfall. You can compare this to the 1986 legislation. This helps you understand the rules about abusive levy positions and shortfall penalties.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM7072995.

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Part 3Levy
Avoidance arrangements and shortfall penalties: Shortfall penalties

107Abusive levy position

  1. A shortfall penalty is payable if the levy payer—

  2. takes a levy position that results in a levy shortfall; and
    1. the levy position is an abusive levy position.

      1. An abusive levy position means a levy position—

      2. that is an unacceptable levy position at the time at which the levy position is taken; and
        1. that, viewed objectively, the levy payer takes—
          1. in respect of, or because of, an arrangement that is entered into with a dominant purpose of avoiding levy, whether directly or indirectly; or
            1. with a dominant purpose of avoiding levy, whether directly or indirectly.

            2. If subsection (1) applies, the shortfall penalty that is payable is 100% of the levy shortfall.

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