Section RM 12 — Income Tax Act 2007: Reduction in provisional tax liability

RM 12 Reduction in provisional tax liability When this section applies (1) This section applies when the amount of provisional tax payable for a tax year is reduced by the person liable to pay the provisional tax, or by the Commissioner under section 119(2) of the Tax Administration Act 1994. Reduction in amount of provisional tax payable (2) If the person applies in writing for a refund of the amount of provisional tax already paid that is as a result of the reduction more than the amount that would have been payable in relation to earlier instalment dates for the tax year, the Commissioner must— (a) apply the overpayment as the person asks under section 173T of the Tax Administration Act 1994 or, if no request is made, in a way that the Commissioner determines in payment of tax or another amount that is payable by them; and (b) refund any balance of the overpayment. Reduction in assessment (3) If the person’s residual income tax for the relevant tax year is no more than $2,500, and they apply in writing for the refund of an amount of provisional tax that has been determined under section RC 9 (Provisional tax payable in instalments) and already paid, other than on a final instalment, the Commissioner must— (a) apply the amount as the person asks under section 173T of the Tax Administration Act 1994 or, if no request is made, in a way the Commissioner determines in payment of tax or another amount that is payable by them; and (b) refund any balance of the amount. Treatment of amount refunded or credited (4) When an overpayment or amount of provisional tax for a tax year has been applied or refunded under subsection (2) or (3)— (a) a later instalment payable under section RC 10 or RC 11 (which relate to the methods used to calculate the amount of an instalment), as applicable, is calculated as if the total instalments previously payable were reduced by the amount of the overpayment or amount; and (b) the overpayment or amount applied or refunded is, from the date of action taken by the Commissioner, treated as not being provisional tax paid for the tax year. Defined in this Act: amount , Commissioner , instalment date , pay , provisional tax , residual income tax , tax , tax year , Compare: 2004 No 35 s MB 36