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Tax pooling funds generally cannot be used to meet regular tax payments like GST. This is because the payment amount is known by the due date for these payments.

Funds may be used for PAYE only after:

  • a reassessment has been made
  • an adjustment results in increased obligation.

Tax pooling funds cannot be applied to any tax or associated use-of-money interest after:

  • 60 days of a notification of reassessment or increased obligation to pay tax
  • 75 days of a taxpayer’s end-of-year date for paying income
  • 76 days for October, November and December balance-date customers if their end-of-year date falls within a tax year with 29 February.

These amounts can be applied at the date the transfer is requested.

Reassessments or increased obligations

After reassessments or increased obligations, pooling funds will only be available for the difference between the original and new amounts.

The same restriction applies to use-of-money interest on these deferrable amounts and to pay deferrable tax.

Agreed delay tax

Pooling funds may be used, with our agreement, on tax referred to as ‘agreed delay tax’. This includes the use-of-money interest for the agreed delay tax.

This can happen when a taxpayer initiates a dispute under Part 4A of the TAA.

2021 tax pooling extension due to COVID-19

We may grant you an extension for the 2021 income year if you meet the following requirements.

  • You have a contract in place with a tax pooling intermediary on or before 21 June 2022.
  • You’re using tax pooling to cover 2021 provisional tax, terminal tax or use of money interest.
  • You have a terminal tax date of 17 January 2022 or later.

Additionally, your business must have been affected by COVID-19 between July 2021 and February 2022 in 1 of the following ways.

  • The impact of COVID-19 meant your business had a significant decline in actual or predicted revenue so that you either could not meet your existing tax pooling contract or could not enter into a contract at all.
  • You had difficulty finalising your tax return because of COVID-19 or related response measures. For example, a staff member or advisor was in isolation and unavailable, or the financial impact of COVID-19 seriously disrupted your normal business operations.

Confirm in writing

Your or your tax agent must confirm with your tax pooling intermediary, in writing and by 21 June 2022, that you meet these requirements.

Request due date

We must receive your transfer request by 183 days after your terminal tax due date for the 2021 year, or by 30 September 2022, whichever date is earlier.

You can find out more about these requirements in our determination COV 22/15 on our Tax Technical website.

Determination COV 22/15 – COVID-19 variation

Last updated: 17 Jun 2021
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