Shortfall penalty for taking an abusive tax position

This interpretation statement (IS) explains the meaning of “abusive tax position” in relation to the abusive tax position shortfall penalty.  The IS also discusses relevant case law and provides several practical examples for clarity.

There is separate guidance on the shortfall penalties provided in s 141A, 141B, 141C and s 141E of the Tax Administration Act 1994, the threshold requirements for a shortfall penalty (that there be a “tax position” and a “tax shortfall”) and reductions and other matters that may be relevant when a  shortfall penalty is imposed (Related Publications).