2021 income tax returns
It remains important to file income tax returns as soon as possible. However, if you've been affected by COVID-19, we will not charge any late filing penalties if you file your return late, but before 31 May 2022.
Time bar for 2021 income tax returns
Late income tax return filings will have the effect of extending the time bar in s 108 to 31 March 2027 (instead of 31 March 2026). In these circumstances, as at 31 March 2026 we will close any review or other compliance activity for any 2020-21 income tax return which is:
- due on or before 31 March 2022 and is filed after 31 March but before 31 May 2022 due to the impact of COVID-19
- not subject to any existing exclusions from the standard 4 year time bar
- not subject to a dispute started by notice of proposed adjustment (NOPA) issued before 1 January 2025 and either:
- involved alleged tax avoidance
- has tax in dispute of over $200 million.
We may ask you to clarify the cause of any delay in filing. This is limited to the effects of COVID-19.
Extension of time arrangements for tax agents
If your filing percentage is under 90% on 31 March 2022, and you're:
- a monitored tax agent - your account manager will be in touch to discuss your situation
- not a monitored tax agent - your filing percentages will not be monitored this year.
We want to work with tax agencies to help them and their clients in whatever way we can. Because our system sends automatic notifications, if you are not currently monitored and receive a letter about monitoring, please ignore this.
CFC and FIF disclosures
Generally controlled foreign companies (CFC) and foreign investment fund (FIF) disclosure forms are filed at the same time as the relevant income tax return or by the due date for that income tax return.
If you've been affected by COVID-19, we will not take any compliance action, or charge penalties or interest, if you file your CFC or FIF disclosure by 31 May 2022. To be eligible for this relief, the relevant income tax return must be filed.
If your tax agent has applied for deferred status for your 2021 income tax return, we'll apply the same extension to the due date for any CFC or FIF disclosures required.
Losses and subvention payments
Offsetting losses
If a loss offset election is to be made for the 2021 tax year (which would normally have to be made by 31 March 2022) and you are affected by COVID-19, we'll allow the loss offset if all of the following conditions are met.
- The relevant companies meet the requirements to transfer losses to another company.
- The relevant companies file their income tax returns as soon as practicable, but by 31 May 2022 at the latest.
- An election to offset the loss is provided to us by the 31 May 2022 (if not notified in the relevant company's income tax return).
Subvention payments
If a subvention payment is to be made for the 2021 tax year (which would normally have to be paid and notified by 31 March 2022) and you are affected by COVID-19, we'll allow it if all of the following conditions are met.
- The relevant companies meet the requirements to transfer losses to another company.
- The relevant companies file their income tax returns as soon as practicable, but by 31 May 2022 at the latest.
- A notice of the subvention payment is provided to us by 31 May 2022 (if not notified in the relevant company's income tax return).
- The subvention payment is made as soon as practicable, but by 31 May 2022 at the latest.
Transferring losses to another company
Look-through company elections
Look-through company (LTC) elections for new companies, or companies that were previously non-active, for the 2021 income year are normally due 31 March 2022. We've extended this date to 30 June 2022.
LTC elections for the 2023 tax year for existing companies (those previously required to file an income tax return) are due before the start of the company's 2023 tax year (this would usually be 31 March 2022).
However, we can accept late LTC elections if there are exceptional circumstances outside the control of the owners and they are signed and dated in the 2023 income year. We consider being affected by COVID-19 to be an exceptional circumstance. It is important to note the election must be filed as soon as possible and not left to later in the year merely for convenience.
Trading stock on hand
We will allow a late 2022 stocktake if you are affected by COVID-19, provided it is carried out as soon as practicable and no later than 31 May 2022. The 2022 closing stock figure needs to be reconstructed by adjusting for post-balance date sales and purchases – those made between balance date and the late stocktake date.
Wiremu’s Home Appliances Ltd sells and repairs kitchen appliances. It has a standard balance date of 31 March. At the end of the 2022 income year, the company was required to value its trading stock. However, as a result of COVID-19, it had to shut down its business and was unable to undertake the stocktake on 31 March 2022.
On 25 April 2022, the company reopens its business and undertakes a late stocktake. It has kept a record of all amounts of post-balance date sales and purchases. Using the cost valuation method, it adjusts the late stocktake figure (to reconstruct what would have been the amount of closing stock at the end of 2022), by adding back the cost of post-balance date sales and deducting the cost of post-balance date purchases.