Find out how we apply interest and how to ask us to remit your interest charges.
Why we charge interest
We apply a general interest charge (GIC) on unpaid tax debts and shortfall interest charge (SIC) on shortfall amounts. The purpose of charging interest is to ensure that:
- taxpayers who complete their tax returns correctly and pay their tax on time are not worse off than taxpayers who lodge incorrect returns and pay less tax than they should (even if this is by mistake)
- government revenue is not disadvantaged by taxpayers who don't pay their tax on time.
General interest charge
We may apply the GIC, if an amount of tax or some other liability remains unpaid after the date it should have been paid. This includes where:
- a tax shortfall arises because of an amendment of an assessment or other correction
- an instalment of tax is underestimated
- a return is lodged late.
Shortfall interest charge
The SIC has a lower rate than the GIC. This is because taxpayers are usually unaware of a shortfall amount until we tell them. When we tell you of a shortfall in your tax, we also include an interest charge on the shortfall amount.
The shortfall is the difference between the amount of tax originally assessed (or refunds you claimed) and the amount of tax you were eventually assessed for (or credits you were entitled to).
The due date for payment of the additional tax and SIC is 21 days after the day we give you notice of the additional tax.
Once the due date has passed, the higher GIC applies to any unpaid tax and SIC.
How we assess a request for GIC remission
In deciding whether to remit the GIC, we consider factors including:
- whether there were any extenuating circumstances that caused the delay in payment
- what steps you took to relieve the effects of those circumstances.
We may ask you to provide documents to support your request.
For example, we look at whether you were responsible for the delay in payment or it was outside your control. This could be due to such things as natural disasters, industrial action, the unforeseen collapse of a major debtor or the sudden ill health of key staff.
If you were responsible, we look at whether this had an unforeseen result. For example, where a soundly-based decision had unforeseen consequences.
How we assess a request for SIC remission
We use the information you provide as well as other information available to us to consider your request for remission of the SIC. We may remit all, some or none of the interest charge.
We also initiate remission, if it is clearly appropriate to do so. For example if:
- we delay the start of an examination into your tax affairs or the expected time to complete an examination is late due to our actions
- we cause periods of unreasonable delay during an examination
- either of us experiences a delay in obtaining information from a third party during the examination, which is not otherwise available to you
- we delay processing your amendment request.
How to request a remission of interest
You can refer to the sections below to get further information.
- Online services for business
- Online services for agents
- Fax or mail
- Shortfall amounts
- How we advise you of our decision
In most circumstances, remission of GIC and SIC requests must be made in writing:
- through Online services for business or Online services for agents (you must be registered)
- by fax or mail.
In very limited circumstances you can phone us to request a remission of SIC.
Include in your request to us:
- your full name
- your contact details
- your tax file number (TFN) or Australian business number (ABN)
- the reference number from any letter or notice advising you of our decision
- an explanation of why you think it is fair and reasonable for us to remit your interest charges
- for GIC only – explain in detail the circumstances, including relevant dates, that led to the delay in payment and any steps you've taken to reduce the delay
- details of interest ($) amounts and dates interest was imposed, if known.
Online services for business
Request a remission of an interest charge in Online services for business using Secure mail. Select the topic and subject of your message from the list below.
Topic |
Subject |
Additional subject |
|---|---|---|
Activity statements |
Remission of general interest charge |
n/a |
Debt and lodgment |
Remission of general interest charge |
n/a |
Debt and lodgment |
Remission of shortfall interest charge |
n/a |
Fringe Benefits Tax (FBT) |
Remission of general interest charge |
n/a |
Income tax |
Remission of general interest charge |
n/a |
Income tax |
Remission of shortfall interest charge |
n/a |
Refunds/remissions |
Remission of general interest charge |
n/a |
Superannuation |
Remission of general interest charge |
n/a |
View more topics |
Statement requests/account details |
Remission of general interest charge |
Online services for agents
Tax professionals can request a remission of an interest charge for their clients in Online services for agents using Practice mail. Select the topic and subject of your message from the list below.
Topic |
Subject |
|---|---|
Activity statements |
Remission of general interest charge (GIC) |
Debt and lodgment |
Remission of general interest charge |
Debt and lodgment |
Remission of shortfall interest charge |
Fringe Benefits Tax (FBT) |
Remission of general interest charge |
Income tax |
Remission of general interest charge |
Income tax |
Remission of shortfall interest charge |
Refunds/remissions |
Remission of general interest charge |
Statement requests or account details |
Remission of general interest charge |
Superannuation |
Remission of general interest charge |
Fax or mail
Send your request for a remission of an interest charge for Income tax liabilities and GST by either:
- Fax 1300 139 045
- Post
Australian Taxation Office
PO Box 327
ALBURY NSW 2640
Send your request for a remission of an interest charge for Fuel schemes and non-BAS claimants of wine equalisation tax (WET) and fuel tax credits by post to:
Australian Taxation Office
PO Box 3007
PENRITH NSW 2740
Shortfall amounts
You may request a remission of SIC by phone, in the case of the following exceptions:
- SIC was calculated on an amount larger than your amendment assessment (PAYG ITW credit/s were not included to reduce the shortfall).
- SIC was calculated after you paid tax (paid before your notice was issued).
- We took longer than the service standard time to issue your amendment and the SIC accrued.
How we advise you of our decision
If we decide not to remit the interest charge in full, we'll send you a letter explaining why not.
Further avenues of review
There are 2 types of interest charge:
General interest charge
The remission of GIC is not a reviewable objection decision. This means you don't have the right to lodge an objection with us or have the decision reviewed by the Administrative Appeal Tribunal (AAT).
However, you may seek an independent external review of the decision in the Federal Court or Federal Circuit Court under the Administrative Decisions (Judicial Review) Act 1977.
Shortfall interest charge
In all circumstances except one, you can request a review of the SIC remission decision.
The exception is where, after our decision on your first request, the amount you still have to pay is more than 20% of the shortfall itself. In this situation you need to use the objection process to disagree with our decision.
See PS LA 2006/8 Remission of shortfall interest charge and general interest charge for shortfall periods.
Find out how we apply interest and how to ask us to remit your interest charges.