The deadline for sending comments in 31 October 2025.
New Zealand’s Inland Revenue (IR) has launched a consultation on 29 August 2025 regarding the update and replacement of the existing interpretation statements on the shortfall penalties for not taking reasonable cases, taking an unacceptable tax position and gross carelessness.
The existing items are still technically correct, but are being updated for a number of legislative changes and new case law. Examples have also been updated and additional examples provided.
Guidance on the “tax position” and “tax shortfall” requirements relevant to all shortfall penalties has been included in a new separate interpretation statement, as has the guidance on reductions and other matters common to all shortfall penalties. These matters were previously discussed (in varying detail) in each of the existing interpretation statements.
Main changes to the current items include:
- The circumstances in which a taxpayer who uses a tax agent will be treated as having taken reasonable care have been prescribed in the legislation.
- The removal of GST and withholding-type taxes from the scope of the unacceptable tax position shortfall penalty.
The consultation is open until 31 October 2025.
