Interest and penalties – application to Crown entities and Commonwealth authorities

The machinery provisions for the collection and recovery of penalties and interest charges are contained in the Taxation Administration Act 1953 (TAA). The TAA has express legislative provisions excluding the Commonwealth or an authority of the Commonwealth from the application of interest charges. However, previously there was no equivalent provision in relation to states and territories, nor was there an express provision about the application of penalties to the Crown.

Section 2B was inserted into the TAA to clarify that the Act binds the Crown and that the Crown is not liable for certain pecuniary penalties or to be prosecuted for certain offences, effective as at 25 February 2015. This means that the Crown, and entities with Crown immunities (Crown entities), are not liable to pay general interest charge, shortfall interest charge or a penalty under the uniform penalty regime, if liability for that penalty or interest charge would be imposed by the TAA (rather than another Act).

Find out more  

• Treasury Legislation Amendment (Repeal Day) Act 2015External Link
• Explanatory memorandumExternal Link

We have identified the entities that would enjoy Crown immunity. Our systems are being updated in 2018 to record a Crown entity status. A regular check is being undertaken to identify and correct the accounts impacted by the operation of section 2B of the TAA. This remediation work will be done on an ongoing basis.

If you believe you should have Crown immunity and have had penalties and interest incorrectly imposed on your account since 25 February 2015, please ring us on 13 11 42.

See also  

• Interest and penalties
• Miscellaneous taxation ruling 2011/1