Objections to duty assessments

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Right to object to duty assessment

If a taxpayer is dissatisfied with an assessment issued by the Commissioner of State Revenue (‘Commissioner’), it is necessary to lodge a notice of objection to an assessment within a period of 60 days after which the date on the assessment is issued or notice of the decision is given to the taxpayer. In certain circumstances, the period of time for lodging an objection may be extended.

Requirements for an objection

The objection would be expected to set out atleast the following matters:

  1. the material facts;

  2. the grounds of the objection; and

  3. the taxpayer’s contention as to the basis for the correct assessment and the amount of that assessment.

A failure to set out the material facts and the grounds of assessment with particularity may result in the objection not being considered valid by the Commissioner. This could therefore result in the time for lodgment elapsing during the period which the Commissioner is determining whether the notice of objection is valid.

The grounds may include (for example):

  1. the interpretation of the law; or

  2. how the law has been applied by the Commissioner to the circumstances of the taxpayer.

Whilst further information and/or documents may be requested by the Commissioner, it is best practice to ensure that documentary evidence of the matters is provided at the time of lodging the notice of objection.

The Commissioner will provide written reasons if the objection is disallowed in whole or in part.

The taxpayer is still under an obligation to pay any duty by the due date, however, a taxpayer may apply for an extension of time to pay the amount of the assessment. The Commissioner has a discretion pursuant to section 47 of the Taxation Administration Act 2003 to approve arrangements for an extension of time, including the payment of instalment amounts by the taxpayer. A decision of the Commissioner under section 47 is a reviewable decision.

A failure to pay any duty by the due date will result in the taxpayer being liable to pay penalty tax equal to 20% of the amount outstanding. The Commissioner has a discretion to remit an amount of penalty tax.

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