Canterbury earthquake - remission of use-of-money interest

Inland Revenue's ability to remit use-of-money interest charged when a person has been physically prevented from making a payment due to the Canterbury earthquake has been extended for a further 12 months.

Background

Section 183ABA of the Tax Administration Act 1994 enables use-of-money interest to be remitted when an Order in Council has declared an event to be an emergency event, the emergency event physically prevents the taxpayer from making a payment by the due date, and the Commissioner is satisfied that:

• it is equitable that the interest be remitted;
• the taxpayer asked for the relief as soon as practicable; and
• the taxpayer made the payment as soon as practicable.

The Canterbury earthquake and its aftershocks were declared to be an emergency event for the purposes of this provision by the Tax Administration (Emergency Event - Canterbury Earthquake) Order 2010 (SR 2010/307). This order expired on 31 March 2011, but that expiry date was extended to 30 September 2011 by the Tax Administration (Emergency Event - Canterbury Earthquake) Amendment Order 2011 (SR 2011/29).

Key features

The Tax Administration (Emergency Event - Canterbury Earthquake) Amendment Order (No 2) 2011 (SR 2011/376) extends the expiry date of the original order for a further 12 months, until 30 September 2012.

This means that the Commissioner will continue to be able to remit use-of-money interest for claims made until 30 September 2012, when those claims meet the other statutory criteria. This extension is necessary because interest is not charged until the return for the relevant period has been filed and assessed, which may not be for some time after the original payment date.

Application date

This order came into effect on 10 October 2011 and expires on 30 September 2012.

Tax Administration (Emergency Event - Canterbury Earthquake) Amendment Order (No 2) 2011 (SR 2011/376)