Tax Administration Amendment Act (No 2) 1996

Tax Administration Amendment Act (No 2) 1996

Public Act1996 No 56
Date of assent26 July 1996

Note

This Act is administered in the Inland Revenue Department


Contents

Title


An Act to amend the Tax Administration Act 1994 in relation to—

  • (a) Compliance standards expected of taxpayers; and

  • (b) The imposition of penalties and interest where such standards are not met; and

  • (c) Procedures for the resolution of disputes between taxpayers and the Commissioner

BE IT ENACTED by the Parliament of New Zealand as follows:

1 Short Title
  • This Act may be cited as the Tax Administration Amendment Act (No 2) 1996, and shall be read together with and deemed part of the Tax Administration Act 1994 (in this Act referred to as the principal Act).

2 Application date for provisions in this Act
  • (1) Except as otherwise provided in this Act, the provisions of this Act apply with respect to tax obligations, liabilities, and rights that are to be performed under or arise in respect of—

    • (a) The Income Tax Act 1994 in relation to the tax on income in the 1997-98 income year and subsequent years:

    • (d) The Gaming Duties Act 1971 in relation to all races run, all lotteries drawn, all dutiable games played by means of a gaming machine, and all casino wins arising on or after 1 April 1997:

    • (e) The Stamp and Cheque Duties Act 1971 in relation to—

      • (i) Every instrument of conveyance executed; and

      • (ii) Every bill of exchange made, drawn, or prepaid under section 81 or section 82 or section 83 of that Act; and

      • (iii) Every liable transaction entered into—

      on or after 1 April 1997.

    (2) Sections 5, 9 to 15, 16(1) and (2), 18 to 34, 37 to 42, 47, 55, and 65 come into force on 1 October 1996.

    (3) Where—

    • (a) A provision of this Act amends, inserts, or repeals a provision (the relevant provision) of the principal Act; and

    • (b) The relevant provision is referred to in, or necessary for the purposes of, another provision (the other provision) of the principal Act; and

    • (c) The other provision is amended, inserted, or repealed by this Act with effect on and after an application date that is not the same as the general application date for the relevant provision,—

    the provision of this Act that amends, inserts, or repeals the relevant provision has, for all purposes in regard to the other provision, the same application date as the other provision.

3 Interpretation
  • This section substantially amended, as from 1 October 1996, s 3 of the principal Act.

4 Construction of certain provisions
  • This section inserted, as from 1 October 1996, s 4A of the principal Act.

5 Authorisation to take securities
  • This section inserted, as from 1 October 1996, s 7A of the principal Act

6 New Part 2A inserted
  • This section inserted, as from 1 October 1996, Part 2A, comprising ss 15A and 15B, of the principal Act.

7 Court orders for production of information or return
  • This section inserted, as from 1 October 1996, s 17A of the principal Act

8 Privilege for confidential communication between legal practitioners and their clients
  • Section 20 of the principal Act is amended by omitting from both subsection (1) and subsection (4) the expression 200, 213, and 214, and substituting the expression 143(1)(b), 143A(1)(b), 143B(1)(b), and 143F.

9 Information requisitions in relation to offshore payments
  • This section amended, as from 1 October 1996, s 21 of the principal Act

10 Commissioner may, in certain cases, demand special returns and make special assessments
  • This section amended, as from 1 October 1996, s 44(3) of the principal Act

11 New Part 4A inserted
  • This section inserted, as from 1 October 1996, Part 4A (comprising ss 89A to 89M) of the principal Act

12 Determinations in relation to financial arrangements
  • This section repealed, as from 1 October 1996, s 90(4) and (5) of the principal Act.

13 Determinations in relation to petroleum mining operations
  • This section repealed, as from 1 October 1996, s 91(4), (5) and (7) of the principal Act.

14 Commissioner to make assessments, determinations of loss, and other determinations
  • (1) This subsection amended, as from 1 October 1996, s 92(2) of the principal Act.

    (2) This subsection amended, as from 1 October 1996, s 92(5) of the principal Act.

15 Assessment of fringe benefit tax
  • (1) This subsection amended, as from 1 October 1996, s 93(1) of the principal Act.

    (2) This subsection amended, as from 1 October 1996, s 93(3) of the principal Act.

16 Assessment of qualifying company election tax and late payment penalty
  • (1) This subsection substituted, as from 1 October 1996, s 94(1) of the principal Act.

    (2) This subsection amended, as from 1 October 1996, s 94(3) of the principal Act.

17 New sections inserted
  • This section inserted, as from 1 October 1996, ss 94A and 94B of the principal Act.

18 Assessment of withdrawal tax
  • (1) This subsection amended, as from 1 October 1996, s 95(1) of the principal Act.

    (2) This subsection amended, as from 1 October 1996, s 95(3) of the principal Act.

19 Assessment of New Zealand superannuitant surcharge
  • (1) This subsection amended, as from 1 October 1996, s 96(1) of the principal Act.

    (2) This subsection amended, as from 1 October 1996, s 96(3) of the principal Act.

20 Assessment of imputation penalty tax
  • (1) This subsection amended, as from 1 October 1996, s 97(2) of the principal Act.

    (2) This subsection amended, as from 1 October 1996, s 97(4) of the principal Act.

21 Assessment of specified superannuation contribution withholding tax
  • (1) This subsection amended, as from 1 October 1996, s 98(1) of the principal Act.

    (2) This subsection amended, as from 1 October 1996, s 98(3) of the principal Act.

22 Assessment of resident withholding tax deductions
  • (1) This subsection amended, as from 1 October 1996, s 99(1) of the principal Act.

    (2) This subsection amended, as from 1 October 1996, s 99(3) of the principal Act.

23 Assessment of non-resident withholding tax
  • (1) This subsection amended, as from 1 October 1996, s 100(1) of the principal Act.

    (2) This subsection amended, as from 1 October 1996, s 100(4) of the principal Act.

24 Assessment of further income tax
  • (1) This subsection amended, as from 1 October 1996, s 101(1) of the principal Act.

    (2) This subsection amended, as from 1 October 1996, s 101(3) of the principal Act.

    Subsection (2)(b) was repealed, as from 1 October 1996, by section 121(1) Taxation (Remedial Provisions) Act 1997 (1997 No 74).

25 Assessment of dividend withholding payment
  • (1) This subsection amended, as from 1 October 1996, s 102(1) of the principal Act.

    (2) This subsection amended, as from 1 October 1996, s 102(3) of the principal Act.

26 Assessment of further dividend withholding payment
  • (1) This subsection amended, as from 1 October 1996, s 103(1) of the principal Act.

    (2) This subsection amended, as from 1 October 1996, s 103(2) of the principal Act.

27 Assessment of dividend withholding payment penalty tax
  • (1) This subsection amended, as from 1 October 1996, s 104(2) of the principal Act.

    (2) This subsection amended, as from 1 October 1996, s 104(4) of the principal Act.

28 Assessment where default made in furnishing returns
  • This section amended, as from 1 October 1996, s 106(1) of the principal Act.

29 New sections substituted
  • This section substituted s 108, and inserted ss 108A and 108B, of the principal Act, as from 1 October 1996.

30 Disputable decisions deemed correct except in proceedings
  • This section substituted, as from 1 October 1996, s 109 of the principal Act

31 Evidence of returns and assessments
  • This section amended, as from 1 October 1996, s 110(2) of the principal Act.

32 Validity of assessment not affected by failure to comply with Act
  • This section amended, as from 1 October 1996, s 114 of the principal Act.

33 Foreign tax credit determination deemed correct except in proceedings on objection
  • Section 117 of the principal Act is repealed.

34 Commissioner may determine amount of provisional tax
  • This section amended, as from 1 October 1996, s 119(5) of the principal Act.

35 Interest on tax overpaid
  • (1) This section amended, as from 1 April 1995, s 122(7) of the principal Act.

36 New Part 7 substituted
  • (1) This subsection substituted Part 7 of the principal Act.

    (2) Notwithstanding subsection (1), Part 7 of the principal Act as it applied immediately before its repeal by this section continues to apply for the purposes of any other tax law (including section 42 of the Student Loan Scheme Act 1992) that exists interdependently with, or depends on, a provision in that Part 7.

37 Application of Part 8
  • This section inserted, as from 1 October 1996, s 124A of the principal Act.

38 Certain rights of objection not conferred
  • This section amended, as from 1 October 1996, s 125 of the principal Act.

39 New sections substituted
  • This section substituted s 128 of the principal Act, and inserted s 128A, as from 1 October 1996.

40 Wrong PAYE deduction determination a ground for objection
  • This section substituted s 133 of the principal Act, as from 1 October 1996.

41 Test case procedure
  • Section 137(3) of the principal Act is amended by inserting, after the words similar objection, the words or challenge.

42 New Part 8A inserted
  • This section inserted, as from 1 October 1996, Part 8A of the principal Act, comprising ss 138A to 138S.

43 New Part 9 substituted
  • This section substituted Part 9 of the principal Act.

44 Recovery of civil penalties
  • This section inserted s 156A of the principal Act.

45 Deduction of tax from payments due to defaulters
  • (1) Section 157 of the principal Act is amended by repealing subsection (1), and substituting the following subsection:

    • (1) Where any taxpayer has made default in the payment to the Commissioner of any income tax (or any part of any income tax) or any interest under Part VII payable by the taxpayer or any civil penalty (or any part of any civil penalty) incurred by the taxpayer, the Commissioner may from time to time by notice in writing require any person to—

      • (a) Deduct or extract, in one sum, from any amount that is, or becomes, an amount payable in relation to the taxpayer such sum as is equal to the lesser of—

        • (i) The amount that, according to the notice, is required to be deducted or extracted:

        • (ii) 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 payable in relation to the taxpayer:

      • (b) Subject to subsection (3), deduct or extract from time to time, by way of instalment, from any amount that is, or from time to time becomes, an amount payable in relation to the taxpayer such sum as is equal to the lesser of—

        • (i) 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:

        • (ii) The amount that, at the time at which, according to the notice, the amount of the instalment is required to be deducted or extracted, is the 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,—

      • (c) To the extent that that sum is in respect of or in relation to income tax (or any part of any income tax) payable on taxable income or any interest under Part VII, the taxpayer in relation to whom that taxable income arises:

      • (d) To the extent that that sum is in respect of or in relation to the whole or any part of a tax deduction or interest payable to the Commissioner or a civil penalty, an account maintained by the Commissioner in relation to that tax deduction or that interest or that civil penalty.

    (2) Section 157(10) of the principal Act is amended by repealing the definition of penalty.

46 Application of Parts 7 and 9 to defaulters
  • This section inserted s 157A of the principal Act.

47 Proceedings not affected by vacancy or change in office of Commissioner
  • This section amended, as from 1 October 1996, s 162 of the principal Act.

48 Recovery of refund due to excess tax credits allowed
  • This section inserted s 165A of the principal Act.

49 Recovery of tax deductions from employers
  • Section 167(4) of the principal Act is amended by omitting the words additional tax or any penal tax, and substituting the words late payment penalty or any shortfall penalty.

50 Unpaid tax deductions, etc, to constitute charge on employer's property
  • Section 169(1) of the principal Act is amended by omitting the words additional tax or penal tax, and substituting the words late payment penalty or shortfall penalty.

51 Unpaid resident withholding tax deductions constitute charge on payer's property
  • Section 172(1) of the principal Act is amended by omitting the words additional tax or penal tax, and substituting the words late payment penalty or shortfall penalty.

52 Power of Commissioner in respect of small amounts of refunds or tax payable
  • Section 174 of the principal Act is amended by adding the following subsection (and consequentially numbering the existing section as subsection (1)):

    • (2) Subsection (1) does not apply to any tax that is a civil penalty.

53 Partial refunds of GST
  • This section inserted s 174A of the principal Act.

54 Small amounts of additional tax, etc, not to be charged
  • Section 175 of the principal Act is repealed.

55 Discretion to grant relief from income tax or fringe benefit tax in cases of financial hardship
  • This section amended, as from 1 October 1996, s 177(4) of the principal Act.

56 Remission of underestimation penalty tax
  • (1) Section 178(1) of the principal Act is amended—

    • (a) By omitting the words additional tax under section 144, and substituting the words underestimation penalty tax under section 140A:

    • (b) By repealing paragraph (c), and substituting the following paragraph:

      • (c) The adoption by the taxpayer of an incorrect tax position which is corrected before the taxpayer takes the taxpayer's tax position by providing a tax return for the income year; or:

    • (c) By omitting the words shall remit the additional tax or any appropriate part of the additional tax, and substituting the words may remit the underestimation penalty tax.

    (2) Section 178(2) of the principal Act is amended—

    • (a) By omitting the words additional tax in respect of that income year under section 144, and substituting the words underestimation penalty tax in respect of that income year under section 140A:

    • (b) By omitting the words shall remit the additional tax imposed in accordance with section 144, or such part of the additional tax, and substituting the words may remit the underestimation penalty tax, or such part of the underestimation penalty tax.

    (3) Section 178 is further amended by repealing subsections (4) and (5), and substituting the following subsection:

    • (5) Notwithstanding subsection (2), no underestimation penalty tax may be remitted if—

      • (a) The timing of the derivation of income by the taxpayer; or

      • (b) The incurring of expenditure which is deductible by the taxpayer—

      has been altered for the purpose, or for purposes including the purpose, of remission of a penalty.

57 Relief from additional tax or incremental tax
  • Section 179 of the principal Act is repealed.

58 Remissions and refunds of imputation penalty tax
  • (1) Section 180(1) of the principal Act is amended by omitting the words section 153, and substituting the words section 140B.

    (2) Section 180(2) of the principal Act is amended by omitting the words penalty by way of additional tax imposed under section 149(1), and substituting the words late payment penalty imposed under section 139B.

    (3) Section 180(3) of the principal Act is amended by omitting the words any penalty by way of additional tax imposed under section 148, and substituting the words any late payment penalty imposed under section 139B.

59 Remissions and refunds of dividend withholding payment penalty tax
  • (1) Section 181 of the principal Act is amended by omitting the words section 154, and substituting the words section 140C.

    (2) Section 181(2) of the principal Act is amended by omitting the words penalty by way of additional tax imposed under section 152, and substituting the words late payment penalty imposed under section 139B.

    (3) Section 181(3) of the principal Act is amended by omitting the words any penalty by way of additional tax imposed under section 151, and substituting the words any late payment penalty imposed under section 139B.

60 Relief from additional tax incurred due to default in payment of tax
  • Section 182 of the principal Act is repealed.

61 Obligation to pay tax on foreign investment income able to be suspended
  • (1) Section 183(1)(h) of the principal Act is amended by omitting the expression section 121, and substituting the expression Part VII.

    (2) Section 183(2) of the principal Act is amended by omitting the expression section 139(3), and substituting the expression sections 120S and 142.

62 New sections inserted
63 Payment out of Crown Bank Account
  • Section 185 of the principal Act is amended by repealing paragraphs (c) and (d), and substituting the following paragraph:

    • (c) By way of interest under this Act; or.

64 Offences and penalties
  • Part 12 of the principal Act is repealed.

65 Regulations—income tax related
  • This section amended, as from 1 October 1996, s 225(1)(d) of the principal Act.