Extension of time arrangements for 2009 returns

Introduction to EOT

What is EOT?

Section 37(4) and section 37(5) of the Tax Administration Act 1994 (the TAA) allow the Commissioner to give extensions of time to the clients of tax agents to file income tax returns up to, but not beyond, 31 March of the following year.

The definition in section 3(1) of the TAA sets out that a tax agent is a person who:

• is eligible under section 34B(2) of the TAA to be a tax agent, and
• is listed by the Commissioner as a tax agent, and
• hasn't been removed from the list of tax agents.

Section 34B(2) of the TAA sets out who is eligible to be a tax agent. This includes a person who prepares returns of income required to be completed and sent in for 10 or more taxpayers and is one of the following:

• a practitioner carrying on a professional public practice, or
• a person carrying on a business or occupation in which annual returns of income are prepared, or
• the Maori Trustee.

Section 34(B) also:

• requires the Commissioner to compile and maintain a list of tax agents
• explains how to apply to be listed as a tax agent
• allows the Commissioner to refuse to list someone as a tax agent, when listing the applicant as a tax agent would adversely affect the integrity of the tax system and/or the applicant isn't entitled to make the application
• allows the Commissioner to remove someone from the list of tax agents, when continuing to list the applicant as a tax agent would adversely affect the integrity of the tax system and/or the applicant isn't eligible to be a tax agent
• requires the Commissioner to collect the names of key people from tax agent organisations
• requires the Commissioner to provide certain information before it refuses to list a tax agent or removes them from the list.
• requires a tax agent entity to provide certain information to the Commissioner.

Section 81B of the TAA allows the Commissioner to pass information about a person to an approved advisor group or association that the tax agent is a member of, if the Commissioner is of the opinion that it is relevant to these situations.

Every year the New Zealand Institute of Chartered Accountants (NZICA) negotiates with us the administrative details of applying an automatic EOT to tax agents.

Note
NZICA is the operating name of the institute of Chartered Accountants of New Zealand, a body established under the Institute of Chartered Accountants of New Zealand Act 1996.

This agreement is currently applied by us to all tax agents, regardless of whether they are members of the Institute.

The agreement sets the targets for the percentage of returns that are required to be filed by certain dates in the year. It makes provisions for excluding clients from the 31 March target percentage if they're late providing you with the information necessary to file a return. It also allows for special arrangements where a client’s return is affected by exceptional circumstances.

Why have EOT?

Legislation provides that returns are due by 7 July. Realistically, tax agents could'nt prepare all returns by that date and processing the number of returns would present a challenge for us.

Section 37(4) of the TAA allows the Commissioner to:

"extend a tax agent's time for furnishing a return of income for any taxpayer to a date that the Commissioner thinks proper in the circumstances, if the Commissioner is satisfied that -

(a) The tax agent is unable to furnish the return of income on or before the date set by subsection (1); or

(b) It would be unreasonable, having regard to the circumstances of the tax agent preparing the return, to require the return to be furnished on or before the date set by subsection (1)."

The extension of time provides benefits to both tax agents and us, for example:

• You can spread your return filing over a year rather than have it all occur during one peak period. This will enable you to provide a consistently high standard of return preparation and also assist clients in understanding their tax affairs, which mightn't otherwise be possible.
  
• We can maintain an even flow of tax returns over a 12-month window and ensure no stock of work is carried over to the next filing year.

EOT status

To help you keep track of your EOT requirements, we allocate an EOT status to all your clients. Here is a list of the EOT status indicators:

• Y EOT - client with an EOT
• N EOT - client without an EOT
• D EOT - client with a deferred EOT
• L EOT - client who has an L Letter issued
• R EOT - client who has two or more outstanding returns
• W EOT - client who has an EOT withdrawn

Through the year we'll periodically provide you with a listing of the clients that are currently linked to your agency number. This report is automatically issued several weeks before each return filing target. The report will show you which clients are linked to your agency, and are sorted by EOT status.

 

 

Date published: 07 Jul 2009

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