Penalties
The Tax Administration Act 1994 (TAA) includes a range of penalties designed to support voluntary compliance and protect the integrity of the tax system. Penalties apply where a taxpayer does not meet their obligations, including when a taxpayer takes an incorrect tax position, files, or pays tax late.
This overview lists public guidance on penalties. The guidance is organised under the following headings:
The Commissioner issues different types of public guidance to cater for different customer needs. The different types of items are explained on About our publications.
Shortfall penalties
| Title | Summary | Date issued |
|---|---|---|
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Shortfall penalties - requirements for a "tax position" and a "tax shortfall" IS 26/03 and FS 26/03 |
This IS explains the "tax position" and "tax shortfall" requirements common to the shortfall penalties in ss 141A to 141E of the TAA. |
27 Mar 2026 |
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Shortfall penalty for not take reasonable care IS 26/04 and FS 26/04 |
This IS explains the meaning of "reasonable care" in relation to the shortfall penalty for not taking reasonable care in s 141A of the TAA. | 27 Mar 2026 |
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Shortfall penalty for taking an unacceptable tax position IS 26/05 and FS 26/05 |
This IS explains the meaning of "unacceptable tax position" in relation to the shortfall penalty for taking an unacceptable tax position in s 141B of the TAA. | 27 Mar 2026 |
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Shortfall penalty for taking an abusive tax position IS 26/06 and FS 26/06
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This IS explains the meaning of gross carelessness in s 141C of the TAA. It discusses the circumstances that could be relevant in determining whether someone has been grossly careless and how to distinguish gross carelessness from lower levels of negligence. It also discusses relevant care law and provides several practical examples for clarity. | 27 Mar 2026 |
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Shortfall penalty for taking an abusive tax position IS 26/07 and FS 26/07 |
This IS explains the meaning of "abusive tax position" in relations to the abusive tax position shortfall penalty. The IS also discusses relevant case law and provides sever practical examples for clarity. | 27 Mar 2026 |
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Shortfall penalty for evasion or a similar act IS 26/08 and FS 26/08 |
This IS explains the shortfall penalty for evasion or a similar act in s 141E of the TAA. The IS explains what is required to satisfy the knowledge requirement, and other requirements, for evasion or a similar act. The IS also discusses relevant case law and provides several practical examples for clarity. |
27 Mar 2026 |
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Shortfall penalties - reductions and other matters IS 26/09 and FS 26/09 |
This IS discusses reductions (or increases) in shortfall penalties, what happens when a taxpayer could be liable for more than one penalty and the assessment, payment and disputing of shortfall penalties. The IS is relevant where the Commissioner imposes a shortfall penalty for not taking reasonable care (s 141A), an unacceptable tax position (s 141B), gross carelessness (s 141C), an abusive tax position (s 141D), or evasion or a similar act (s 141E). |
27 Mar 2026 |
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SPS 19/02 |
This SPS sets out the factors that the Commissioner will consider when forming an opinion as to whether a taxpayer has made a voluntary disclosure of all the details of the tax shortfall. |
27 Mar 2019 |
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Payment of shortfall penalty using losses SPS 16/04 |
This SPS sets out the law allowing a taxpayer to use tax losses in payment of a shortfall penalty imposed on an income tax liability. | 13 Aug 2016 |
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Reduction of shortfall penalties for previous behaviour SPS 06/06 |
This SPS sets out Inland Revenue's practice for reducing shortfall penalties for previous behaviour. | 8 Jun 2006 |
| Do the statutory time bar provisions apply to shortfall penalties? | This QWBA clarifies that the Commissioner is not time barred from issuing or amending shortfall penalty assessments if there is a tax shortfall by the statute bar date. | Jun 2004 |
Late filing penalties
| Title | Summary | Date issued |
|---|---|---|
|
SPS 19/04 |
This SPS sets out how the Commissioner will exercise his discretion and practices with regard to late filing penalties. |
Jun 2004 |
Remission of penalties
| Title | Summary | Date issued |
|---|---|---|
|
Options for relief from tax debt SPS 18/04 |
This SPS sets out the Commissioner's practice when considering the options for removing or deferring the obligations to pay tax, interest and/or penalties under the TAA. |
22 Aug 2018 |
Penalties for failing to pay PAYE
| Title | Summary | Date issued |
|---|---|---|
|
Failure to pay PAYE deductions to Inland Revenue RA 26/01 |
This RA highlights the criminal penalties that may apply where employers do not pass PAYE and other amounts deducted from an employee's salary or wages to Inland Revenue. |
16 Mar 2026 |