On 29 June 2005, the shortfall interest charge (SIC) was introduced for amendments of 2004-05 and later years' income tax assessments. The SIC replaces, at a lower rate, the general interest charge (GIC) applied to income tax shortfalls for the period before assessments are amended.
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GIC will continue to apply to tax shortfalls in amended assessments for the 2003-04 and earlier income years regardless of when those amendments are made. It will apply from the due date of the original assessment.
GIC will also apply to the original assessment and to any tax shortfalls (amended assessments) and associated SIC from their due date if they are not paid by that date.
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Generally, the SIC applies from the due date for payment of the earlier, understated assessment until the day before we issue the notice of amended assessment. The amended assessment or tax shortfall and the related SIC are due 24 days after the amended assessment is issued.
SIC is calculated on a daily compounding basis. The formula for calculating SIC is provided in section 280-105 of Schedule 1 to the Taxation Administration Act 1953. It uses a base interest rate and an uplift factor of 3%. The base interest rate is defined in tax legislation and is the 90-day Bank Accepted Bill rate published by the Reserve Bank.
The SIC rate is updated quarterly with rates for the next quarter generally announced two weeks before the start of that quarter.
The rates are in the table below.
Quarter
|
SIC annual rate
|
SIC daily rate
|
April - June 2013
|
5.95%
|
0.01630137%
|
January - March 2013
|
6.24 %
|
0.01709589%
|
October - December 2012
|
6.62 %
|
0.01808743%
|
July - September 2012
|
6.66%
|
0.01819672%
|
April - June 2012
|
7.37%
|
0.02013661%
|
January - March 2012
|
7.62%
|
0.02081967%
|
October - December 2011
|
7.86%
|
0.02153425%
|
July - September 2011
|
8.00%
|
0.02191781%
|
April - June 2011
|
7.92%
|
0.02169863%
|
January - March 2011
|
8.02%
|
0.02197260%
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October - December 2010
|
7.74%
|
0.02120548%
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July - September 2010
|
7.8%
|
0.02136986%
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April - June 2010
|
7.16%
|
0.01961644%
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January - March 2010
|
6.95%
|
0.01904110%
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October - December 2009
|
6.30%
|
0.01726027%
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July - September 2009
|
6.13%
|
0.01679452%
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April - June 2009
|
6.16%
|
0.01687671%
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January - March 2009
|
7.76%
|
0.02126027%
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October - December 2008
|
10.31%
|
0.02816939%
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July - September 2008
|
10.75%
|
0.02937158%
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April - June 2008
|
10.69%
|
0.02920765%
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January - March 2008
|
10.15%
|
0.02773224%
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October - December 2007
|
9.75%
|
0.02671233%
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July - September 2007
|
9.37%
|
0.02567123%
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April - June 2007
|
9.37%
|
0.02567123%
|
January - March 2007
|
9.37%
|
0.02567123%
|
October - December 2006
|
9.19%
|
0.02517808%
|
July - September 2006
|
8.87%
|
0.02430137%
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April - June 2006
|
8.61%
|
0.02358904%
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January - March 2006
|
8.63%
|
0.02364383%
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October - December 2005
|
8.62%
|
0.02364383%
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July - September 2005
|
8.68%
|
0.02378082%
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April - June 2005
|
8.63%
|
0.02364383%
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For more information about the SIC, refer to ROSA in brief - shortfall interest charge (NAT 14920, PDF, 224KB).
Last Modified: Wednesday, 6 March 2013