Section IW 1 — Income Tax Act 2007: Shortfall penalties

IW 1 Shortfall penalties When this section applies (1) This section applies in a tax year when a person has a shortfall penalty for an income tax liability. Persons choosing to use tax losses (2) If the person has a tax loss for the tax year, they may use the amount of the tax loss to pay the penalty, notifying the Commissioner by the due date for payment of the penalty. Wholly-owned groups choosing to use tax losses (3) If a company that is part of a wholly-owned group of companies has a tax loss for a tax year, the wholly-owned group may use the amount of the tax loss to pay the penalty imposed on the company, notifying the Commissioner by the due date for the payment of the penalty. Time of use (4) The tax loss is used at the time of notification. Lowest marginal tax rate and availability (5) Each dollar of an amount of tax loss that is used under this section— (a) is equal to 1 dollar multiplied by the rate of tax or lowest marginal rate of tax that would apply to the person in the return period to which the tax shortfall relates if the person had tax to pay: (b) cannot, from the date the tax loss is used, be used or made available for use, or be carried forward to a later tax year. Tax years and part-years (6) In this section, a tax year includes a part of a tax year that may be taken into account under this Part for continuity or grouping purposes. Defined in this Act: amount , Commissioner , company , income tax liability , notify , pay , shortfall penalty , tax , tax loss , tax year , wholly-owned group of companies , Compare: 2004 No 35 s IG 10