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Inland Revenue

Tax Policy

Electronic communications


(Clauses 5 to 34, 36 to 46, 48 to 51, 55 to 58, 60 to 66, 68 to 69, 71, 74 to 82, 88 to 100, 103 to 104, 106 to 108, 110, 112 to 121, 123 to 129, 132 to 135, 137, 139 to 144, 146 to 152, 154 to 176, 178 to 202, 212, 220)

Summary of proposed amendments

These amendments remove references throughout the Income Tax Act 2007, the Goods and Services Act 1985 and the Tax Administration Act 1994 which restrict interaction with the tax system to paper-based transactions. In addition, where legislation requires the Commissioner, a taxpayer or a third party to ask, request, inform, apply or notify, these verbs have been defined to allow a freer interpretation of how those actions are to be undertaken when communicating on tax matters.

The amendments govern how all information must generally be communicated. They also provide general rules applicable to various methods of communication delivery. The delivery rules consolidate current practices and legal requirements and extend these to electronic communications putting emails, for example, on the same footing as paper letters delivered by post.

The purpose of these proposals is to remove any legislative barriers to receiving and sending electronic communications, as the necessary first step towards accommodating the better use of digital services. This is achieved by both removing the outdated references and also specifically providing for electronic communications within the new framework.

This framework will facilitate greater use of electronic and other new communication channels in step with the planned transformation of Inland Revenue’s systems and processes over the coming years. Inland Revenue’s simplification programme aims to provide greater use of digital channels for increased convenience and reduction in compliance costs. These proposals would provide the legislative backing for that change. The proposed amendments would preclude the need to amend the tax legislation to specifically cover the new channels, thus future-proofing the legislation.

Application date

This amendment takes effect from the date of enactment.

Key features

Clause 74 establishes the new communications framework, contained in new sections 14 to 14G, for facilitating the information flows between the Commissioner and a person, and between two persons where the tax legislation governs that interaction.

The framework picks up and expands on the rules governing notice requirements in the current section 14 to 14C in the Tax Administration Act 1994.

It establishes the general rules and standards for communications on tax matters in the Income Tax Act 2007, the Goods and Services Act 1985 and the Tax Administration Act 1994. This includes a range of communications such as a taxpayer making a phone call or submitting a GST registration application, or the Department issuing a notice or income statement to the taxpayer. It can also cover communications between third parties on tax matters such as the requirement for a bank to provide an investor with an RWT certificate for example.

However, because the framework is intended to apply broadly, in order to ensure that the amendments do not unnecessarily disturb established practices or specific legislative requirements new section 14E allows for some general overrides.

The framework provides for varying levels of communication formality, ranging from telephone conversations to formal notification requiring personal delivery. This allows the framework to accommodate a variety of options for communications which may range from low risk or importance to more restricted formal procedures for significant communications.

The amendments allow for the Commissioner to permit new modes of communication, thereby allowing the framework to be expanded and adapted as systems are upgraded or new technologies emerge, without the need to extensively amend the legislation each time.

Broadly new section 14F preserves the various elements of the current sections 14 to 14C with respect to paper based communications, and extends them to electronic modes of communication.

With regard to electronic notices, the rules in the current section 14 to 14C are maintained and extended to all electronic communications. This includes the consent override for electronic notices, currently as per section 14(7). Therefore under these amendments the same rule would apply in circumstances where the Commissioner seeks to electronically ‘inform’ a person for example.

The majority of the remaining amendments simply replace existing terminology referring to specific modes of communication, for example the requirement for certain communications to be “in writing”, with terminology corresponding to an appropriate tier in the communications framework as established by clause 74.

There are also a number of amendments where a more significant redraft was required to fit the requirements of the provision into the new framework. With regard to these amendments there is no broad intended change in the meaning of the provisions, other than with regard to any changes to the form or format of the communication or its delivery consistent with the new framework.


The Electronic Transactions Act 2002 overrides other legislation and allows for the use of electronic forms of communication when written communication is otherwise required by legislation, where the recipient of the communication consents.

However communication under the tax legislation is primarily reliant on paper-based communications. Partly this reliance stems from an uncertainty as to the validity of electronic communications. This uncertainty arises from the fact that communications between taxpayers and the Commissioner are primarily governed by tax legislation which predates the widespread use of digital services.

As a result, many of the provisions refer to now outdated modes of communication and methods of communication delivery, including for example requirements for communication to be provided “in writing” or delivered “by post”.

These amendments seek to clarify any uncertainty arising from the interaction between the application of the ETA and the outdated requirements of the tax legislation.

Detailed analysis

The proposed new communications framework intentionally applies broadly. It covers all communications between the Commissioner or Inland Revenue officers and other persons; as well as communications between two or more other persons not involving the Commissioner where those interactions are governed by provisions of the tax legislation. An example may be the requirement for the company to provide a dividend statement to its shareholders.

These proposed rules preserve the precedence of prescribed forms and formats and any specific requirements covered within particular sections. For example it is not intended that the general nature of the framework would allow a taxpayer to file tax a tax return by sending the required information in an email, in circumstances where no email return forms have been prescribed by the Commissioner.

Practically this means that where paper forms have been prescribed, but no electronic equivalents have been made available, taxpayers will be required to continue to file paper returns on prescribed forms until electronic equivalents are made available.

Equally with regard to employer monthly schedules, for example, the specific requirements for these to be completed electronically are not intended to be relaxed as a result of the broad framework amendments in this bill.

New section 14E also preserves the overriding effect of double tax agreements and other inter-governmental treaties, by applying the new communication rules only to the extent to which they are not inconsistent with the application of the particular agreement.

New sections 14B to 14D create three distinct tiers to accommodate various modes of communication ranging from the informal (including oral communication) to electronic (whether by electronic filing through Inland Revenue’s website, email or other electronic means) to more formal methods requiring paper or original documents. The tiers are signalled by the use of the following verbs – ask, request, or inform, apply or notify, and formally notify.

Each tier sets out the options available for a person providing information or communicating something in response to one of the abovementioned verbs. For example a section requiring a person to inform the Commissioner of something can be satisfied by a telephone call, whereas a requirement to notify the Commissioner of something would require a document either electronic or printed.

Each tier also allows for the Commissioner to permit new modes. This allows for the framework to be expanded over time. Once a new channel becomes available for use, it would be sufficient to publish a notice that this new option is available to those who wish to use it, without the need for a separate legislative amendment.

New section 14F and 14G establish delivery rules which ensure that communications, in particular electronic communications, are delivered only to appropriate contact addresses. This is important in order to protect both Inland Revenue and taxpayers from the risk of misdirected communications and to guard against an inadvertent breach of the tax secrecy provisions.

For example this amendment ensures that if the Commissioner sends a notice to a corporate taxpayer via email that it is sent to a person who is acting for the corporate taxpayer in relation to that matter. This ensures that the notice is not treated as ‘delivered’ if it is simply sent to a generic email box at that corporation.

In addition, the current rules allow for the Commissioner to post a notice to the recipient’s current or last known address. The proposed new rules extend this to allow the Commissioner to send a notice via email to the recipient’s current or last known email address.

These amendments preserve the Commissioner’s ability to send an electronic notice to the recipient without first obtaining the recipient’s consent, as required by the ETA. For Inland Revenue which processes large volumes of communication this is important in order to ensure the electronic communication is workable as an alternative to paper-based communications.

Inland Revenue will aim to always preserve integrity and confidentiality in its communications.

Where possible and practical Inland Revenue staff seek, from each individual recipient, their consent for electronic communication. This may not always be feasible, particularly for large groups of recipients receiving a generic batch email notice, or in circumstances where the email address is the only contact address available for the recipient as they are overseas based for example.

In the interests of maintaining confidentiality and integrity, the proposed amendment preserves the condition that the Commissioner may not send the electronic notice where there are reasonable grounds to suppose that the notice will not be received. This requirement is maintained and extended to all forms of electronic communications by the Commissioner.

The intended result of these amendments is to ensure that electronic communications are not unnecessarily restricted when compared with paper equivalents sent by post.

Finally, as discussed above, these amendments are not intended to allow for filing tax returns by email, unless that service is made available by the Commissioner either by direct agreement with the taxpayer or generally consented to by a notice on the Inland Revenue website for example.

This restriction on the receipt of electronic communication by Inland Revenue is necessary in order to protect taxpayers from misdirected communications falling outside of the net, for example tax returns being sent via email and never being picked up for processing.

However, where the Commissioner has made a specific Inland Revenue email contact address for a particular purpose available on the website for example, this proposed amendment does not affect the ability to use this address to send emails to Inland Revenue with regard to that specific purpose.


(Clauses 72, 73, 105)

Summary of proposed amendment

This amendment inserts a new section into the Tax Administration Act 1994 to allow for documents to be ‘‘signed” with a digital or electronic signature. It applies to all information provided to the Commissioner including, for example, electronically submitted tax returns or application forms.

Once operational this amendment will eliminate the need for handwritten signatures where an acceptable and valid electronic signature is used instead. This has a number of positive impacts for the use of digital services including improving customer interactions and lower compliance costs.

This amendment does not mandate the use of electronic signatures, and valid handwritten signatures will continue to be acceptable.

Application date

This amendment is intended to take effect from the date of enactment.

Key features

The Electronic Transactions Act 2002 allows for an electronic signature to satisfy a legal requirement for a document to be signed, where the recipient of the document consents to the use of the electronic signature.

This amendment provides the necessary consent for the use of valid electronic signatures on information provided to the Commissioner. It also brings the Tax Administration Act 1994 into line with the Electronic Transactions Act 2002.

Because of the legal significance of a signature, it is important that the use of electronic signatures is both secure and reliable for both taxpayers and Inland Revenue.

The amendment allows for the Commissioner to set criteria and technical requirements for the use of electronic signatures.

In order to be able to use electronic signatures in place of hand written signatures, users will need to first comply with the Commissioner’s published requirements and technical criteria.

There are also likely to be approval criteria for users of this technology to further minimise the risk of signature forgery or misuse. The criteria will be set by the Commissioner following consultation with interested parties.

Once the criteria have been set, the Commissioner will publish guidelines to provide advice and support to interested users.

Finally the amendment allows for the Commissioner to place reasonable reliance on the user of the electronic signature. This means that when a person provides an electronically signed document, unless there are reasonable grounds to suppose otherwise, the document will be treated as signed by that person.


The Tax Administration Act 1994 requires handwritten signatures on paper forms. From the legal viewpoint a person’s signature is the visual representation of an intention to be legally bound by the information contained in the signed document. So for example a taxpayer’s signature on a tax return both identifies them as the person signing the return but also evidences that taxpayer’s certification that the contents of the return are true and correct.

From a technological perspective an electronic signature can inextricably link a particular version of a document to the sender or a point in time and can be used to indicate any subsequent alterations to the document, or give information about the identity of the sender.

As part of Inland Revenue’s focus on simplifying processes by improving digital services, this amendment would allow tax agents and taxpayers to submit electronically signed documents to Inland Revenue. The proposed amendment would also reduce compliance costs associated with current processes. For example tax agents filing their client’s returns electronically will no longer have to first mail out a paper copy of the return for the client to hand sign, instead the entire process could become paperless.