Your tax rights
Taxpayers should be aware of their rights, which they possess under law, on matters relating to taxation.
Right to minimise your tax liability
To make this clear, we quote comments from a learned judge:
“Every man is entitled, if he can, to order his affairs so that the tax attaching under the Act is less than it otherwise would be.”
Every taxpayer should take advantage of his/her right to arrange his affairs in such a way that the favourable terms and allowances available under the Act are secured. This is your right of tax planning. Only a fool would pay more than he legally has to. A wise man arranges his affairs so his liability is minimised.
Right of objection to tax assessed
If a taxpayer receives an assessment requesting payment of tax, this does not necessarily mean that he/she has to pay without a word. If a taxpayer disagrees with assessment on some ground, (e.g. expenses claimed have been disallowed) he/she has the right to object to the assessment.
The objection has to be in writing, stating briefly the grounds of objection and must be delivered or posted to the commissioner within the time specified in the notice of assessment. The commissioner will consider the objection and will either:
- Wholly allow the objection and amend the assessment.
- Allow the objection and reduce the assessment.
- Disallow the objection entirely.
Right to apply for relief from penalty
Where a penalty has been levied for late payment of tax due, the taxpayer can apply to the commissioner for omission of this penalty if the delay was caused by circumstances, which, in the commissioner’s opinion, would justify a remission.
Right of objection to loss
You have the right to object to the amount fixed by the commissioner as your business loss. You also have the right to object to the loss that was carried forward.
Right to seek decision of Taxation Review Authority
Where a taxpayer lodges an objection to an assessment and the objection is disallowed by the commissioner, the taxpayer has the right to object further to the Taxation Review Authority or to the High Court.
Right to apply for relief from tax in cases of serious hardship
The Act gives the Commissioner the power in considering an application from a taxpayer for hardship relief, to remit a liability for tax or refund tax already paid. The Commissioner has to be satisfied that the taxpayer has suffered such a loss or is of such circumstances that payment of tax will cause serious hardship.
When you are experiencing serious hardship or financial difficulties apply to be considered for relief from payment of a debt. The application is your request for tax relief. Depending on your circumstance you will generally be required to provide full details of your financial position and circumstances.
Right to file your returns as you see it
Your tax returns or business accounts sent to the IRD are your view of what you should pay under the tax laws. These views are considered by the Inland Revenue Department to compare with their view of the same law. If you both agree, there is no problem. If you disagree, you can object. You must never forget that you have as much right to your interpretation of the same tax laws as that of the IRD or anyone else.
Once that sinks in you will never be frightened again of anyone, ever.
Right to receive full assistance
If you don’t understand a point or procedure regarding your tax affairs, ask. Don’t be ignored, but insist on discussing it with a senior officer of the IRD. If you find that the member of staff advising you is on the phone or at the counter, or does not know what they are talking about, ask for someone who knows what they are talking about. Don’t ever allow yourself to be put off. If you have to, ask for the Commissioner himself – then you’ll see some action.
Rights of student loan borrowers
Your rights as a borrower:
- Advice on how to best manage your student loan for your particular situation.
- No one can be given information about your student loan without your consent. If you want to give anyone permission to get information about your loan, call IRD on 0800 377 778
- You have the right, under the Credit Contracts and Consumer Finance Act 2003, to know in advance the total amount of money, including interest that has to be paid back.
- It is your right to see most of the personal information IRD hold about you, and to ask them to correct any errors.
- Free statements of your account at any time.
- Access to tools, such as the online repayment calculator.
Right to the information you give IRD re family assistance
You may ask to see the personal information that IRD holds about you by phoning them on 0800 227 773 or, if you and/or your partner are in business, 0800 377 774. Unless they have a lawful reason for withholding the information, they will show it to you and correct any errors.
Right to privacy
The IRD are committed to ensuring that your privacy is protected.
- you can browse the IRD website without providing personal information;
- what personal information they collect;
- what rights you have in relation to the personal information they hold;
- who can access your personal information;
- how long they will keep your personal information; and
- The Privacy Officer
Inland Revenue National Office
Right to use the IRD website without giving out personal details
You can access the IRD website and browse the site without disclosing your personal information.
- IRD do not automatically record personal information; and
- IRD do not link information that is recorded automatically with personal information about specific individuals.
Note however that the Online Correspondence Service collects and stores personal information provided during the registration process and details of the correspondence sent and received.
Rights in relation to your IRD personal information
You can access the personal information IRD hold about you as part of your Inland Revenue records. You may call them on 0800 377 774 and request a copy of your personal information and they will provide you with a copy of the personal information they keep. They may require proof of your identity before they can help you.
If you consider that some of the information IRD holds about you is incorrect, you can request them to change the information. They will assess your request and will either change the relevant information, or explain why they think the information should not be changed and make a note of your request on their records.
Right to use the “dispute resolution” process re your tax assessment
If you disagree with an assessment or with an adjustment that IRD has made to your return, you have the right to use the disputes resolution process to change the assessment. This process is designed to resolve disagreements quickly by early identification of all issues, full disclosure of the facts and evidence, and consultation between you and Inland Revenue.
Right to early payment discounts
From the income year beginning 1 April 2005, a 6.7% discount of tax was introduced to encourage individuals who begin receiving self-employed or partnership income to pay tax voluntarily in the year before they begin paying provisional tax.
Right to use of money interest
Interest applies when you either overpay or underpay the amount that is due. If you overpay the amount due the IRD will generally pay you interest from the day after the original due date. If you underpay the amount due the IRD will charge interest on the amount that is still outstanding from the day after the original due date.
The current rates effective from 8 May 2016 are as follows:
- 1.62 % (formerly 2.63%) for overpayments
- 8.27% (formerly 9.21%) for underpayments.