Request remission of interest charges or penalties
The purpose of the penalty provisions in tax law is to encourage taxpayers to take reasonable care in complying with their tax obligations.
The purpose of charging interest is to ensure that:
- taxpayers who do the right thing are not at a disadvantage to those who don't, and
- government revenue is not disadvantaged by taxpayers who don't pay their tax on time.
We can remit (reduce or cancel) many penalties and interest charges if it would be fair and reasonable to do so. If you are dissatisfied with an interest charge or a penalty, you may ask us to remit it. We can also initiate a remission of interest charges, for example, for voluntary disclosures or where we or other outside factors have been responsible for delays that increase a shortfall period.
Remission of interest charges
We charge interest on outstanding amounts such as unpaid tax debts and shortfall amounts (the difference between the amount of tax you have paid and what you should have paid). We impose the general interest charge on all outstanding amounts except, for some taxes, a shortfall amount, which attracts the shortfall interest charge. In deciding whether to remit (reduce or cancel) an interest charge we consider a number of factors.
Tax types on which the shortfall interest charge can apply are petroleum resources rent tax, excess contributions tax and income tax - including Higher Education Contribution Scheme (HECS), Higher Education Loan Program (HELP) and Medicare levy.
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Having interest charges applied to a shortfall amount does not depend upon, or imply, dishonesty on your part.
You can claim interest charges as a deduction on your tax return.
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Remission of penalties
We impose penalties where taxpayer behaviour warrants some action.
Penalty provisions for a mistake are largely the same, regardless of the particular tax law involved, except for excise, which has a separate penalties regime. If you are dissatisfied with a penalty we have imposed, in most cases you may ask us to remit (reduce or cancel) it. For some penalties you have to object to them using the objection process. In deciding whether to remit a penalty we consider a number of factors.
Sections within Request remission of interest charges or penalties
Last Modified: Monday, 20 May 2013