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Customs and Excise Act 2018

Entry and exit of goods, persons, and craft - Interest and penalties for late or incorrect payments of duty, incorrect refunds of duty, and drawback incorrectly allowed - Interest: late or incorrect payments of duty

154: Interest payable for late or incorrect payments of duty in certain cases

You could also call this:

"You pay extra if you're late paying duty or pay the wrong amount."

Illustration for Customs and Excise Act 2018

If you do not pay duty on time, you have to pay interest. This happens when certain rules, like those in sections 155 to 158, apply to your duty and you do not pay it before the payment date is over. You pay interest from the day after the payment date until you pay the duty in full.

The interest is calculated each day using a formula. The formula is: duty still owed, multiplied by the interest rate, divided by 365. The duty still owed is the amount you have not paid yet, and the interest rate is the rate set for that day.

You can find out what the payment date means by looking at section 155(2) or (4), section 156(2), (4), or (6), section 157(2), (4), or (6), or section 158(2). The interest rate is set to make sure the government does not lose money when you pay late, and to encourage you to pay the right amount on time.

If you want to know about getting interest back, you can look at sections 165 to 173.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM7245105.

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Part 3Entry and exit of goods, persons, and craft
Interest and penalties for late or incorrect payments of duty, incorrect refunds of duty, and drawback incorrectly allowed: Interest: late or incorrect payments of duty

154Interest payable for late or incorrect payments of duty in certain cases

  1. Interest is payable in respect of any duty if—

  2. any of sections 155 to 158 provides for this section to apply to the duty; and
    1. the duty is not fully paid to Customs before the close of the payment date (see subsection (5)).

      1. The interest is payable for the period (the interest period) that—

      2. begins with the day after the payment date; and
        1. ends with the day on which the duty is fully paid.

          1. The amount of interest payable is calculated for each day of the interest period in accordance with the following formula:

            d × r ÷ 365

            Where:

            • d d

              is the amount of the duty still to be paid to Customs as at the start of the day

            • r r

              is the prescribed rate of interest applying on that day.

          2. The total amount of interest payable is the sum of the amounts calculated under subsection (3) for each day of the interest period.

          3. In this section, payment date has the meaning given to that term in section 155(2) or (4), 156(2), (4), or (6), 157(2), (4), or (6), or 158(2) (as applicable).

          4. The power to prescribe a rate of interest for the purposes of item r in subsection (3) may be exercised for the following purposes:

          5. to compensate the Crown for the loss of use of money:
            1. to encourage duty payers to pay to Customs the correct amount of duty on time.

              1. See sections 165 to 173 for remissions and refunds of interest payable under this section.