Why you may have a penalty
You're required to meet your tax obligations and when you don’t, penalties may apply.
The purpose of penalties is to encourage taxpayers to voluntarily comply with their obligations.
The law specifies the conditions under which a penalty is applied, and the amount of the penalty.
How to dispute or request remission of a penalty
In certain circumstances we have the power to remit all or part of the penalty.
You can dispute some types of penalties only by lodging an objection. For other types of penalties, you can ask us to remit it.
Penalties you can dispute through an objection
You can lodge an objection if you're disputing certain assessed penalties, including:
- false or misleading statement penalties
- where we have determined your tax-related liability in the absence of a document that you failed to provide to us (such as a tax return).
You can read more about eligibility to lodge an objection.
Penalties you can ask us to remit
For penalties you can't object to, you can ask us to remit it in full or in part. This applies to most penalties, including penalties for failing to lodge documents on time and failing to withhold pay as you go withholding amounts.
Failure to lodge penalties
To request a remission of failure to lodge (FTL) penalties, visit How to request a remission of interest and failure to lodge penalties.
Other penalties
To request a remission for other penalties, you can write to us either:
AUSTRALIAN TAXATION OFFICE
PO BOX 327
ALBURY NSW 2640
Make sure to include:
- your full name
- your contact details
- your tax file number (TFN) or Australian business number (ABN)
- the reference number from the letter advising you of our decision to apply a penalty
- the reasons you think it is fair and reasonable for us to remit or cancel the penalty in your situation
- details of the penalty amounts ($) and dates the penalties were applied (if known).
How we assess a request
Taxpayers who under-report their income, overclaim credits, or delay paying their tax should not gain an unfair advantage over taxpayers who do the right thing.
In deciding whether to remit a penalty, we consider things like:
- your general compliance history
- whether you have any outstanding tax returns, activity statements or other forms
- whether you have any tax debts.
For shortfall penalties we also consider:
- the reasons for the increased tax (or reduced credits) that led to you having a penalty
- whether we became aware of the shortfall because of our compliance efforts.
Compliance history
We will generally treat taxpayers with a good compliance history more favourably than those who aren't compliant. The weight we give to your compliance history varies depending on the circumstances.
A good compliance history is generally one where you:
- have a history of meeting all your lodgment obligations on time (including lodging activity statements and tax returns)
- have paid all non-disputed debt (or have a payment plan)
- haven't recently been liable for another penalty.
We also consider your personal circumstances and the reason you may have outstanding lodgments and payments, and whether you were willing, but unable to comply due to circumstances outside your control or due to you experiencing vulnerability.
Our decision
If we decide not to remit the penalty amount in full, we will send you a letter to explain our decision. The letter will explain your review rights, if you disagree with our decision.
Support for people experiencing vulnerability
If you're facing challenging personal circumstances and need help managing your tax obligations, visit Tax support when you need it most for other support options available to people experiencing vulnerability.