account holders (and other persons connected with accounts such as intermediaries that – hold funds for other persons, and controlling persons). The specific types of penalties that will be imposed under New Zealand legislation are outlined in detail further below. Some of these penalties also apply for the purposes of FATCA, where similar compliance issues arise. Penalties regime financial institutions – In brief terms, financial penalties will apply to Reporting NZFIs that fail to undertake their due diligence obligations, fail to report the requisite information, or who provide inaccurate or false information (i.e. Reporting NZFIs that fail to comply with their CRS obligations under Part 11B of the Tax Administration Act 1994). This includes: civil absolute liability penalties; penalties for failing to take reasonable care; and criminal knowledge-based penalties. These penalties are all mutually exclusive. For example, if a penalty is imposed on a Reporting NZFI for a failure to take reasonable care an additional absolute liability penalty would not be able to be imposed for that same failure. This guidance now outlines how these institution” penalties would apply in practice. “financial Civil absolute liability penalties A Reporting NZFI that does not comply with its CRS obligations could (depending on the circumstances) be liable for the following absolute liability penalties: Section 142H(1) of the Tax Administration Act 1994: $300 per failure (capped at $10,000 per reporting period) to comply with any CRS obligation than failing to obtain a for a new account see below). This will be subject to the following defences: – that the failure was due to circumstances beyond the Reporting NZFI’s control; and for a transitional period ending 30 June 2019, that the Reporting NZFI made reasonable efforts to meet its CRS requirements (including making reasonable efforts to correct any failure within a reasonable period of time becoming aware of the failure). Section 142H(3) of the Tax Administration Act 1994: $300 per account (capped at $10,000 per reporting period) for failure to obtain a required self-certification on account opening. This will be subject to the following defence:
account holders (and other persons connected with accounts – such as intermediaries that hold funds for other persons, and controlling persons). The specific types of penalties that will be imposed under New Zealand legislation are outlined in detail further below. Some of these penalties also apply for the purposes of FATCA, where similar compliance issues arise. Penalties regime – financial institutions In brief terms, financial penalties will apply to Reporting NZFIs that fail to undertake their due diligence obligations, fail to report the requisite information, or who provide inaccurate or false information (i.e. Reporting NZFIs that fail to comply with their CRS obligations under Part 11B of the Tax Administration Act 1994). This includes: civil absolute liability penalties; penalties for failing to take reasonable care; and criminal knowledge-based penalties. These penalties are all mutually exclusive. For example, if a penalty is imposed on a Reporting NZFI for a failure to take reasonable care an additional absolute liability penalty would not be able to be imposed for that same failure. This guidance now outlines how these “financial institution” penalties would apply in practice. Civil absolute liability penalties A Reporting NZFI that does not comply with its CRS obligations could (depending on the circumstances) be liable for the following absolute liability penalties: Section 142H(1) of the Tax Administration Act 1994: $300 per failure (capped at $10,000 per reporting period) to comply with any CRS obligation than failing to obtain a for a new account – see below). This will be subject to the following defences: that the failure was due to circumstances beyond the Reporting NZFI’s control; and for a transitional period ending 30 June 2019, that the Reporting NZFI made reasonable efforts to meet its CRS requirements (including making reasonable efforts to correct any failure within a reasonable period of time becoming aware of the failure). Section 142H(3) of the Tax Administration Act 1994: $300 per account (capped at $10,000 per reporting period) for failure to obtain a required self-certification on account opening. This will be subject to the following defence:
2016-other-aeoi-guidance-draft.docx