Taxation Administration Act 2001

A taxpayer is liable for an amount (penalty tax) if—

the commissioner makes a default assessment under section 13(1)(a) or (b); or

the commissioner makes a reassessment and the original assessment was a default assessment under section 13(1)(a) or (b); or

the primary tax assessed on a reassessment, other than under a reassessment mentioned in paragraph (b), is more than the primary tax assessed on the original assessment or an earlier reassessment.

Penalty tax must be assessed as follows—

if subsection (1)(a) applies—an amount equal to 75% of the primary tax assessed;

if subsection (1)(b) applies—an amount equal to 75% of the reassessed primary tax;

if subsection (1)(c) applies and the primary tax assessed on the last reassessment is more than the primary tax assessed on the original assessment—an amount equal to 75% of the difference between the 2 amounts;

if subsection (1)(c) applies and the primary tax assessed on the last reassessment is less than the primary tax assessed on the original assessment but more than the primary tax assessed on an earlier reassessment—an amount equal to 75% of the difference between the primary tax assessed on the last reassessment and the lowest primary tax assessed on an earlier reassessment.

The commissioner may increase the amount of the penalty tax by not more than 20% of the penalty tax under subsection (2) if the commissioner is satisfied the taxpayer—

has not complied with section 28; or

has hindered or prevented the commissioner from becoming aware of the nature and extent of the taxpayer’s liability for tax.

A reference in this section to an amount of primary tax does not include a reference to an amount of royalty payable under the Mineral Resources Act 1989 to a person other than the State.