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Inland Revenue

Tax Policy

Administrative flexibility


(Clauses 15 and 16)

Summary of proposed amendment

Proposed new sections 6H and 6I of the Tax Administration Act introduce a temporary discretionary power the Commissioner may use to provide flexibility for due dates, deadlines, time periods, timeframes or procedural and administrative requirements for taxpayers affected by COVID-19 making compliance with current tax obligations impossible, impractical, or unreasonable.

The proposed discretionary power is intended to provide the Commissioner with a more timely mechanism to assist taxpayers who encounter practical difficulties in complying with certain requirements under the Inland Revenue Acts, or under provisions in the Unclaimed Money Act 1971. The proposed power is therefore intended to supplement existing provisions already available to taxpayers affected by COVID-19.

Where taxpayers comply with a modified timeframe or requirement made under this proposed power, they would be treated as if they complied with the requirement set in legislation.

Application date

The proposed amendment would apply from enactment and may be exercised for obligations which arose from 17 March 2020. The discretion would only apply until 30 September 2021 for dates and variations within that timeframe. The discretion could be further extended by Order in Council.

Key features

The proposal provides the Commissioner with a temporary power to vary due dates, deadlines, time periods, timeframes and administrative or procedural requirements for taxpayers who are adversely affected by COVID-19.

Specifically, it would allow the Commissioner to:

  • extend a due date, deadline, time period or timeframe in relation to a requirement; and
  • modify a procedural or administrative requirement that must be met under a provision, for example, modifying the nature or form of information that is required to meet the provision.

If a taxpayer complies with an alternative set out in a variation they would be treated as if they complied with the requirements set out in legislation.

Variations must be made within and relate to the approximately 18-month period of 17 March 2020 to 30 September 2021. This limit would recognise that this is a discretionary power conveyed on the Commissioner for the purpose of assisting taxpayers with certain the COVID-19 compliance issues.


The Commissioner of Inland Revenue is charged with the administration of the Inland Revenue Acts. As part of that administration, the Commissioner must use her best endeavours to protect the integrity of the tax system.

There is existing flexibility for the Commissioner to accommodate taxpayers affected by COVID-19. These include the ability for the Commissioner to remit late filing penalties or use of money interest when a taxpayer files or pays late and is affected by COVID-19, to change some dates by Order in Council or the Commissioner’s care and management power.

Given the process and time required for an Order in Council, and the concern that existing provisions may be unable to resolve particular difficulties, providing a time-limited discretion to allow the Commissioner to extend due dates and timeframes or to modify other procedural requirements would be a more efficient way to respond quickly and provide relief to those affected by COVID-19.

Therefore, the proposed mechanism would be more flexible and timely, and would be used where the Commissioner considers an appropriate outcome is not possible or is difficult to achieve under a current provision.

The proposed power is intended to cover situations where it may be unreasonable for taxpayers to comply with due dates, timeframes or procedural requirements set out in tax legislation because of the impacts of COVID-19.

A taxpayer would not need to apply a variation, they could continue to comply with tax laws as enacted.

Detailed analysis

The proposed amendments would provide the Commissioner with the ability to, at her discretion:

  • extend a due date, deadline, time period, or timeframe by, within or in relation to which:
    • a person must comply with a requirement set out in the provision
    • a person must make an election under the provision; and
    • a person’s entitlements, rights or obligations are affected.
  • modify procedural or administrative requirements.

Due dates and timeframes could relate to payment, filing, disclosure or other time-based requirements, while procedural or administrative requirements are intended to cover where some information or other requirement may be able to be completed using an alternative method or means, for example, modifying the nature or form of information or action required.

Subsection 6H(1) clarifies that the proposed discretion could be exercised for any provision in the Inland Revenue Acts listed in Schedule 1 of the Tax Administration Act 1994. Subsection 6H(5) would extend the definition of the Inland Revenue Acts for this purpose to include the Unclaimed Money Act 1971.

When the Commissioner would exercise the discretion (supplementary nature)

Section 6H sets out the purpose of the proposed discretion, including how it would be used within the framework of existing provisions which provide relief or flexibility. The Commissioner would exercise the proposed power at her discretion, consistent with her obligations to maintain the integrity of the tax system.

The proposed provision is intended to ensure the Commissioner could exercise sufficient flexibility across tax types and compliance requirements to account for practical compliance concerns arising from COVID-19. However, discretion under the proposed new power is intended to be used where the Commissioner considers an appropriate outcome is either not possible or may be difficult to achieve under the terms of the existing provisions. Existing provisions include recently introduced rules around the remission of use of money interest. This is reflected in 6H(3).

Temporary application over an 18-month period

Subsection 6H(4) proposes that the Commissioner could exercise the discretion under this provision for a period of approximately 18 months, and that this applies for dates, timeframes or requirements that may arise for a taxpayer over this 18 month period. Any variation made must be confined to obligations that occur within this period.

The temporary nature of the proposed discretion recognises that this supplementary discretion power is only available to assist taxpayers with some of the impacts of COVID-19 and related measures.

In addition, subsection 6H(4) proposes that this timeframe could be extended through an Order in Council on recommendation by the Minister of Revenue, if that is required to account for longer lasting effects of COVID-19.

Applies to taxpayers affected by COVID-19

Subsection 6H(2) proposes that the Commissioner could exercise this discretion where compliance with current requirements is impossible, impractical or unreasonable, because of circumstances arising from COVID 19 or response measures to COVID-19, including by the Government.

Applies generally for a class of taxpayers affected by COVID-19

Section 6I (3) proposes that a variation would apply generally unless the Commissioner specifies that it applies to a specific class of taxpayers or if specific circumstances or conditions are required.

This would provide consistency across taxpayers in similar situations where they are affected by COVID-19 and allow Inland Revenue to automatically apply an extension for a group of affected taxpayers, as variations would only be advantageous to taxpayers.

Taxpayers may choose whether or not to comply with variation or existing requirements

The proposed variations are intended to either provide taxpayers with more time or modify a procedural or administrative requirement in a way that provides additional options or less onerous compliance requirements.

However, taxpayers may always choose to comply in the way set out in the legislation rather than in line with any published variation.

Proposed subsection 6I(4) would achieve this optionality by providing that taxpayers who are covered by a variation may elect whether or not to use it by either informing the Commissioner or taking a tax position that reflects their choice.

Subsection 6I(2) proposes that where taxpayers comply with a variation made under this power, they would be treated as if they complied with the requirement set in legislation.

A variation does not change an underlying due date or requirement. However, if a variation is available to a taxpayer and they comply with it they would be treated, through subsection 6I(2) as if they complied with the requirement set out in legislation.

If a taxpayer is still unable to comply with a variation or alternative requirements, they should contact Inland Revenue to discuss their circumstances.

The Commissioner would publish details of a varied requirement

Proposed subsection 6I(5) would require the Commissioner to publish any variation that she has made using this proposed discretion. This is intended to provide information in a central place, such as the Inland Revenue website, to communicate the COVID-19 variations to any affected taxpayers.

Publishing this information would provide transparency and help promote consistency for treatment of taxpayers in similar positions.

Amendment to confirm the exercise of this discretion is not a disputable decision

Proposed amendments to the definition of disputable decision in section 3 of the Tax Administration Act 1994 provide that the decision to issue, or to decline to issue, a variation under section 6I would not be a disputable decision.