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  • Delayed refund of an RBA surplus

    Attention

    Warning:

    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

    End of attention

    From 1 July 2000, delayed refund interest is payable on a surplus on an RBA that reflects:

    • the allocation of a Business Activity Statement (BAS) amount to the RBA following lodgement of the BAS-where it is not refunded within 14 days of it arising.

    A BAS in this regard includes an Instalment Activity Statement.

    A BAS amount is any credit or debt that arises directly under the BAS provisions-they include GST, wine equalisation tax, luxury car tax, PAYG withholdings and instalments and instalments of fringe benefits tax.

    • the remission of a penalty (that the taxpayer requested be remitted) relating to the BAS amount-where it is not refunded within 14 days of the request for remission.
    • a voluntary payment (that the taxpayer requested be refunded) made in respect of an anticipated tax debt under a BAS provision-where it is not refunded within 14 days of the request for refund.

    If you have not provided the ATO with outstanding activity statements or all the information necessary for your activity statements to be processed, delayed refund interest will not start accruing until 15 days after the relevant statements or information are provided.

    Note: Delayed refund interest is not payable if the refund or surplus is offset against another tax liability you owe.

    Who calculates the interest on your delayed refund?

    The ATO will calculate your interest. Interest will be refunded to you with your delayed refund or set off or applied against any outstanding debts you may have with the ATO. The following example shows how interest on a delayed refund is calculated. As in earlier examples, a single interest rate of 6 per cent has been used.

    Example: RBA surplus-activity statement refund is delayed

    Mary lodged her second quarterly BAS. At that time she had provided the ATO with all the information required for the BAS to be processed. The ATO processed the BAS on 4 February and this resulted in a $4,000 RBA surplus arising.

    The ATO calculated delayed refund interest from 19 February, from the beginning of the date 15 days after the RBA surplus arose, to 26 February, the date the surplus was refunded-a period of 8 days:

    (8 ÷ 365) × $4,000 × (6 ÷ 100) = $5.26

    Mary must include $5.26 as income on her income tax return for the income year in which the interest was refunded to her or the income year in which the ATO set it off or applied it against a tax debt.

    End of example

    For more information about interest on early payments, overpayments and delayed refunds, ring the Personal Tax Infoline on 13 28 61

    Last modified: 13 Feb 2020QC 16168