Concessionary treatment for late filing of 2019 income tax returns

Inland Revenue has announced two concessionary policies for 2018/19 income year tax returns that are filed late. 

The concessions are:

• Late filing penalties (they range from $50 - $500 depending upon the level of net income for the year) will be waived; and
• The statute bar for re-opening returns will be applied as if the returns were filed on time (so the return will become statute barred on 1 April 2024, not 1 April 2025).

The concessions apply if:

• The last date for filing the return is 31 March 2020; and
• The return is filed after 31 March but before 31 May 2020; and
• The delay is due to the effects of the COVD-19 virus.

The announcement includes statements that:

• “It remains important to furnish the returns as soon as possible.” 
• “The Commissioner may need to clarify the circumstances of any delay in filing. This is limited to the effects of the COVID-19 virus.”

Taken together, the statements make clear that it is not sufficient that the 31 March 2020 deadline was missed because of the effects of the virus.  Rather, the whole of the delay must be attributable to virus in order to qualify for the concessions.

There are two other criteria in relation to the statute bar concession, being that the return is not subject to either:

• An existing exclusion from the time bar (return is: fraudulent or wilfully misleading; or omits mention of income of a particular nature or from a particular source); or 
• A dispute:
  • commenced by NOPA issued before 1 January 2023, and
  • involving alleged tax avoidance, or
  • having tax in dispute of greater than $200 million.

The concessions are welcome measures but they will not apply to all late returns

Information on this insight was last updated 07.04.2020