On the 29th March 2025, the Taxation (Annual Rates for 2024−25, Emergency Response, and Remedial Measures) Act received Royal assent.
Of note is that the Act includes an amendment to section 89C of the Tax Administration Act 1994 relating to Inland Revenue’s (IRD) ability to amend an assessment without completing the formal disputes process.
The amendment adds a new provision stating that if a “qualifying individual” provides information to IRD relating to their taxable income and then fails to respond within two months to a request from IRD for additional information, IRD is able to amend their tax position without the need for notice.
The provision is aimed at individuals that need to disclose income that is not otherwise reported to IRD, such as a salary or wage earner who also incurs a rental loss. If that person subsequently discloses the rental income to IRD, but then fails to respond to a request for more information, IRD will have the right to amend the tax position.
The change appears to be as a result of frustration from IRD that certain individuals don’t engage and ignore follow up requests. At this stage, it is unclear how this power will be exercised and how frequently, but it does mean requests for more information from IRD should not be ignored.
