Tax Payments - when received in time (Feb 07) (WITHDRAWN)

This statement also appears in Tax Information Bulletin, Vol 19, No 2 (March 2007).

Introduction

1. This Standard Practice Statement ("SPS") sets out the Inland Revenue's practice for accepting tax payments as having been made in time.

Application

2. This SPS replaces SPS PRC 101 Tax payments - when received in time, which was published in Tax Information Bulletin, Vol 15, No 12 (December 2003), and will apply from 12 February 2007. (For GST return periods refer paragraph 4.)

Background

3. SPS PRC 101 set out when Inland Revenue would accept payments as having been received in time, including:

• Payments by post,
• Electronic payments (from New Zealand and overseas),
• Physical delivery,
• Post-dated cheques,
• Weekends and public holidays,
• Tax pooling, and
• Tax transfers.

4. Since the publication of SPS PRC 101, there have been legislative changes in GST return filing and payment due dates. The Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 and then the Taxation (Annual Rates, Savings Investment, and Miscellaneous Provisions) Act 2006 amended section 16 of the Goods and Services Tax Act 1985 ("GST Act"). For taxable periods ending on or after 31 March 2007, the GST return filing and payment due dates are:

• The 28th day of the month following the end of the taxable period, if the taxable period does not end in March or November; or
  
• The 7th day of May, if the taxable period ends in March; or
  
• The 15th day of January, if the taxable ends in November.

5. The changes in GST return filing and payment due dates represent the first step in preparation for the later alignment of GST and provisional tax payment due dates, which will take effect from the 2008-09 tax year. The objective of these changes is to make tax compliance easier for small businesses that operate in New Zealand.
   
   
6. Inland Revenue's practice in respect of when payments have been received in time remains unchanged and will apply to GST payments, as they are treated the same as other tax payments after the legislative changes in the return filing and payment due dates.

Standard Practice

7. This SPS applies to all tax types, including Goods and Services Tax ("GST") and Child Support payments.

Payments by post

8. Payments will be accepted as being received in time if mailed and postmarked on or before the due date.
   
   
9. For Rural Delivery taxpayers, the date of payment is when it is received by New Zealand Post or similar providers. Inland Revenue does not treat the payment as received when the taxpayer places the payment in their personal mail box for collection.

Overseas payments by post

10. An overseas postmark cannot be used to determine the date a payment was received by Inland Revenue from a taxpayer living or working overseas. Accordingly, the time of actual receipt by Inland Revenue will be used.

Electronic payments

11. Taxpayers may make payments electronically, including by internet banking. A payment will be received in time when it has been electronically paid or direct credited into an Inland Revenue account either on or before the due date. Internet payments must be completed prior to the end of the banks' online business hours to be recorded as received on that specific day. Internet payments after these online business hours will be processed on the next business day.
    
    
12. In the context of electronic payments, "business hours" means the hours a bank makes available to customers to initiate electronic payments on any given day. Payments made after these hours will be processed by the bank as at the next business day.

Overseas electronic payments

13. A payment will be received in time when it has been electronically paid or direct credited into an Inland Revenue account either on or before the New Zealand due date.

Physical delivery

14. A payment will be accepted as being received in time if it is deposited into an Inland Revenue drop box by the close of business on the due date.

Westpac payments

15. Taxpayers may also make payments at most branches of Westpac. Payments can be made over the counter or via drop boxes. The payment is received in time if it is physically handed into a Westpac branch by the close of business on the due date.

Post-dated cheques

16. Inland Revenue will not bank post-dated cheques until the specified date. A cheque that is post-dated after the due date, even though it is received on or before the due date, will be treated as late. This applies to payments that are posted or physically delivered.

Weekends and public holidays

17. If a due date falls on a weekend or a public holiday (including a provincial anniversary day), Inland Revenue will accept a payment as in time when it is physically delivered or posted on the next working day.
    
    
18. If a due date falls on a weekend or a public holiday (including a provincial anniversary day), then an electronic payment will be accepted as in time when it is credited into an Inland Revenue account on the next working day.

Tax pooling

19. In cases of tax pooling, the date of payment is when the intermediary makes the tax payment to Inland Revenue. For more information on the implications of tax pooling please refer to Tax Information Bulletin , Vol 15, No 5 (May 2003).

Tax transfers

20. For the rules regarding the transfers of overpaid taxes please refer to Tax Information Bulletins , Vol 14, No 11 (November 2002) and Vol 16, No 1 (February 2004).

This Standard Practice Statement was signed on 12 February 2007.

Graham Tubb
Assurance Manager (Group Tax Counsel)
Technical Standards