Why interest applies
When tax is underpaid or not paid in full and on time, by law interest charges apply. The law also determines the rate of interest.
General interest charge (GIC) on unpaid tax liabilities and shortfall interest charge (SIC) on tax shortfall amounts are applied to:
- encourage timely payment of tax
- ensure taxpayers who underpay taxes (where we have to amend your assessment) or pay late don't have an unfair financial advantage over taxpayers who pay on time
- compensate the community for the cost of late payment.
It is important to remember that GIC applies to unpaid tax debts and is calculated daily. GIC will continue to accrue while you have an overdue debt on your account.
When we can remit interest
In certain circumstances we have the power to remit all or part of interest charges you owe.
How to request a remission of interest
To request a remission of GIC or SIC, visit How to request a remission of interest and failure to lodge penalties.
How we decide whether to remit interest
We use the information you provide as well as other information available to us, to consider your request.
GIC remission
You'll need to provide us with enough information so we can decide whether to remit the GIC, this may include:
- the specific event or circumstances that caused the delayed payment resulting in GIC
- how this prevented you from paying by the due date – this may include explaining the likelihood you would have paid on time if it wasn't for the specific event or circumstance
- what steps you've taken to reduce the effects of the circumstances
- any supporting evidence or information that would help us to understand your situation.
We'll also consider:
- if you were responsible for the delay in payment or if it was outside your control
- whether it's fair and reasonable to remit the GIC if you were responsible for the delay
- your prior compliance and payment history.
Generally, we would consider remission requests more favourably if the late payment is out of pattern with your otherwise on time lodgment and payment behaviours over the last several years. When the GIC amount is relatively low, for example $2,500 or less, your positive compliance history will strongly influence our remission decision.
You can read examples of GIC remission requests to guide you on the common circumstances we see and the likelihood that we may remit part or all of your interest.
When deciding your remission request, we consider the policy set out in PS LA 2011/12 Remission of General Interest Charge.
SIC remission
In deciding whether to remit SIC, we may consider things like:
- your prior compliance and payment history
- reasons for increased tax or reduced credits that led us to imposing SIC
- how we became aware of the shortfall, whether as a result of your voluntary disclosure or our own compliance efforts
- the specific circumstances of your request, including the extent to which our delay or some other factor contributed to your liability to SIC
- what possible factors beyond your control were responsible for the size of the shortfall amount and duration to which SIC was calculated.
For more information and examples of SIC remission requests, see PS LA 2006/8 Remission of shortfall interest charge and general interest charge for shortfall periods.
Deductibility of interest
GIC or SIC incurred on or after 1 July 2025 can't be claimed as a tax deduction. As the interest incurred after this time is not deductible, any GIC or SIC that is later remitted doesn't need to be included as assessable income in your tax return.
Your review rights
If we decide not to remit the interest charge in full, we will send you a letter to explain our decision.
If you disagree with our decision not to remit, for:
- GIC
- if you have left out a key piece of information that you think would change the decision or you believe we have made a particular error in deciding your request, you can submit a new request
- you won’t be able to lodge an objection with us or have the decision reviewed by the Administrative Review Tribunal (ART), but you may seek judicial review of our decision in the Federal Court under the Administrative Decisions (Judicial Review) Act 1977.
- SIC
- if the amount you still have to pay is more than 20% of the shortfall itself, you can object to our decision not to remit. If the amount you still have to pay is 20% or less of the shortfall itself, you can request a review of the decision.
- if you are dissatisfied with our objection decision, you can seek review by the Administrative Review Tribunal (ART). You may also seek judicial review of our remission decision in the Federal Court under the Administrative Decisions (Judicial Review) Act 1977.
For more information, see Decisions you can't dispute via an objection.
For more information on our commitments to you, visit Our Charter.
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.