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Penalties and interest charges

Last updated 12 February 2019

The law imposes penalties on the trustee of a fund for:

  • failing to lodge the tax return on time and in the approved form
  • having a shortfall amount for underreporting a liability or over-claiming a credit that is caused by taking a position that is not reasonably arguable
  • making a false or misleading statement in a material particular even if there is no shortfall amount
  • failing to provide a tax return from which the Commissioner of Taxation can determine a liability
  • obtaining a scheme benefit.

Knowingly answering a question incorrectly will be treated as a more serious offence than answering carelessly. Fund trustees have ultimate responsibility for the fund, regardless of whether or not the trustees use professional services such as administration providers, tax agents or other financial advisers.

False or misleading statement penalties will not apply if:

  • the trustees of the fund (and their agent if applicable) made a mistake and they took reasonable care in connection with making the statement; or
  • the trustees of the fund gave their registered tax agent all relevant taxation information and the agent makes a false or misleading statement due to a lack of reasonable care by the agent.

The trustee of a fund is liable for GIC if:

  • tax, penalties or shortfall interest charges (SIC) remain unpaid after the due date for payment, or
  • a variation of a pay as you go (PAYG) instalment rate or amount is less than 85% of the rate or amount that would have covered the fund’s actual liability for the year.

The trustee of a fund is liable for the SIC if the fund’s income tax assessment is amended to increase their liability. Generally, the SIC accrues on the extra tax payable from the due date of the original assessment until the day before the assessment is amended.

Part year or approved substitute period

If the return is for part of an income tax year show the dates for that period.

If, with the leave of the Commissioner, a fund adopts an accounting period being the twelve months ending on some date other than 30 June, show the dates for the approved substitute period.