Penalties and interest

Shortfall interest charge

The shortfall interest charge (SIC) replaced the general interest charge with a lower rate for the period between when the shortfall amount would originally have been due and when the assessment is corrected. The shortfall interest charge only applies when an income tax assessment for the 2004-05 and later income years is amended and, as a result, there is an increased tax liability. The SIC rate is less than the GIC rate as taxpayers are usually unaware of a shortfall amount until we issue an amended assessment.

The due date for payment of the additional tax and for the SIC is 21 days after the day we give you the notice of the amended assessment. Once the due date has passed, the GIC will apply automatically to any unpaid tax and SIC.

Sections within Interest charges

• General interest charge
• Shortfall interest charge
• Remission of interest charges