43Deduction of tax from payment due to defaulters

1. For the purposes of this section—

   amount payable, in relation to a person and to any registered person means—and includes—

   1. any amount that, on the day on which a notice to the person is given under subsection (2) in relation to the registered person, is payable by the person (whether on that person's own account, or as an agent, or as a trustee, or otherwise howsoever) to the registered person:
   2. any amount that, on any day following the day referred to in paragraph (a), is, or becomes, before any revocation (under subsection (4)) of the notice so given, payable by the person (whether on that person's own account, or as an agent, or as a trustee, or otherwise howsoever) to the registered person,—
   3. where the person is a bank, money (including any interest thereon) that—whether the deposit or the depositing is on current account, or so as to bear interest for a fixed term or without limitation of time, and whether or not the registered person has made any application to withdraw or uplift the money
      1. on the day on which a notice to the person is given under subsection (2) in relation to the registered person, is on deposit or is deposited with the person to the credit of the registered person; or
      2. on any day following the day referred to in subparagraph (i) is on deposit or is deposited, before any revocation (under subsection (4)) of the notice so given, with the person to the credit of the registered person,—

   bank means—

   4. any building society registered under the Building Societies Act 1965, in respect of any deposits with the building society:
   5. any person (not being a person of any of the kinds referred to in paragraphs (a) to (d)) that is a bank within the meaning of the Banking Act 1982.

2. For the purposes of the definition of amount payable in subsection (1), money that is on deposit or is deposited to the credit of a registered person includes money that—

3. is held in a joint bank account in the name of the registered person and 1 or more other persons; and
4. can be withdrawn from the account by or on behalf of the registered person without a signature or other authorisation being required at the time of the withdrawal from, or on behalf of, the other person or persons.

5. Subsection (1B) does not apply when the joint bank account is an account of a partnership that files a return of income under section 33(1) of the Tax Administration Act 1994.

6. Where any registered person has made default in the payment to the Commissioner of any tax or interest or late payment penalty or shortfall penalty payable by the registered person under this Act or the Tax Administration Act 1994, or any part of any such interest or tax or penalty, (collectively referred to in this section as unpaid tax), the Commissioner may from time to time by notice require any person to—

7. deduct or extract, in one sum, from any amount that is, or becomes, an amount payable in relation to that registered person such sum as is equal to the lesser of—
   1. the amount that, pursuant to the notice, is required to be deducted or extracted:
   2. the amount that, at the time at which the deduction or extraction is required to be made in compliance with the notice, is the said amount payable:
8. subject to subsection (3), deduct or extract from time to time, by way of instalment, from any amount that is or, as the case may be, from time to time becomes, an amount payable in relation to the registered person such sum as is equal to the lesser of—
   1. the amount that, at the time at which the deduction or extraction is required to be made in compliance with the notice, is the amount required to be so deducted or extracted:
   2. the amount that, pursuant to the notice, at the time at which the amount of the instalment is required to be deducted or extracted, is the said amount payable,—
and require that person to pay to the Commissioner, within such time as is specified in the notice, every sum so deducted or extracted, to the credit of an account maintained by the Commissioner in relation to that registered person in respect of that unpaid tax.

9. If a person (the liable person) is liable to meet the obligations under this Act of a registered person (the defaulting person) that has made default in a payment to the Commissioner, the Commissioner may issue a notice under subsection (2) as if the liable person were a registered person that had committed the default of the defaulting person.

10. A notice of amount to be deducted or extracted issued under subsection (2) may include a daily amount of interest as well as the amount required to be deducted or extracted.

11. The daily amount of interest notified under subsection (2A) shall be calculated for each day, commencing on the date of the notice and ending on the day on which the sum required by the notice is deducted or extracted.

12. Where any notice under this section relates to any amount payable that consists of wages or salary, the sums required to be deducted therefrom shall be calculated so as to not exceed the greater of—

13. an amount equal to the lesser of the following amounts:
    1. an amount calculated at the rate of 10% per week of the unpaid tax of the registered person at the date of the notice:
    2. an amount calculated at the rate of 20% of the said wages or salary payable:
14. the amount of $10 per week.

15. Any notice under this section may be at any time revoked by the Commissioner by a subsequent notice to the person to whom the original notice was given (in this section referred to as the debtor), and must be revoked by the Commissioner on application for revocation by the registered person or liable person at any time when the Commissioner is satisfied that all unpaid tax then due and payable by the registered person has been paid.

16. The Commissioner must provide a copy of a notice that is given in relation to any unpaid tax to a person under subsection (2) or (4) to the registered person or liable person, and the copy must be provided at the time the notice is given.

17. Despite subsection (5), for a notice relating to an amount of wages or salary described in subsection (3), the Commissioner may dispense with the requirement to send a copy of the notice to the registered person or liable person if, after making reasonable inquiries, the Commissioner has, or can find, no valid address for the registered person or liable person.

18. Whenever, pursuant to a notice under this section, any deduction or extraction is made from any amount payable to a registered person or liable person, the registered person or liable person shall be entitled to receive from the debtor notification of the fact of the deduction or extraction and of the purpose for which it was made.

19. Any person making any deduction, extraction, or payment pursuant to a notice under this section shall be deemed to have been acting under the authority of the person to whom the notice relates and of all other persons concerned and is hereby indemnified in respect of such deduction, extraction, or payment.

20. The sum deducted or extracted from any amount pursuant to a notice under this section shall be deemed to be held in trust for the Crown, and, without prejudice to any other remedies against the debtor or any other person, shall be recoverable in the same manner in all respects as if it were tax payable by the debtor.

21. Where, in relation to any notice under this section and during any period, that period being,—

22. where a notice under subsection (2) requires any person, being a bank, to deduct or extract no more than 1 sum, the period that commences on the day on which the notice to the person is given and expires with the day on which the deduction or extraction is required to be made in compliance with the notice:
23. where a notice under subsection (2) requires any person, being a bank, to deduct or extract more than 1 sum, by way of instalment,—
    1. in relation to the sum first required to be deducted or extracted in compliance with the notice, the period that commences on the day on which the notice to the person is given and expires with the day on which the deduction or extraction is so required to be made:
    2. in relation to each succeeding sum required to be deducted or extracted in compliance with the notice, the period that commences on the day immediately following the day on which the previous deduction or extraction (being the deduction or extraction that, in relation to that succeeding sum, was the deduction or extraction last required to be made therebefore) was required to be made in compliance with the notice and expires with the day on which that succeeding sum is so required to be deducted or extracted,—
any amount is, or becomes, an amount payable in relation to the registered person or liable person, that amount or, as the case may be, the aggregate of all such amounts shall, until the expiry of that period and to the extent of an amount that is equal to the amount of the sum that, in compliance with the notice, is required to be deducted or extracted, be deemed to be an amount held in trust for the Crown and, without prejudice to any other remedies against the debtor or any person, shall, if the deduction or extraction required to be made therefrom pursuant to the notice is not so made, be recoverable in the same manner in all respects as if it were tax payable by the debtor.