Penalties & Interest

Taxpayers who do not meet their tax obligations may face penalty or interest charges. To avoid such charges, you should pay the full amount of tax you owe by the due date.

The main kinds of charges for failing to meet tax obligations are:

Solutions such as tax pooling can also be used to ease taxpayer concerns and the resulting exposure to use of money interest.  Tax pooling allows taxpayers to pool tax payments, offsetting underpayments by overpayments within the same pool, thereby reducing their UOMI exposure.  The pooling arrangement is made through a commercial intermediary that charges clients that acquire tax pooling funds and compensate depositors whose funds are acquired by another client.  Intermediaries operate tax pooling accounts with IRD and when a payment is transferred into a client’s tax account it will be treated as a tax payment made to that account.

For more information about tax pooling and your exposure to tax penalties, give us a call.  For more information about tax penalties refer to the IRD’s Obligations, Interest & Penalties Guide

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