ATO Interpretative Decision
ATO ID 2001/244 (Withdrawn)
Income Tax
Voluntary disclosure: remission of General Interest ChargeFOI status: may be released
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This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Whether the General Interest Charge (GIC) imposed under section 170AA of the Income Tax Assessment Act 1936 (ITAA 1936) should be remitted when the taxpayer makes a voluntary disclosure.
Decision
The GIC imposed under section 170AA (ITAA 1936) should not be remitted.
Facts
On a date after 1 July 1999, the taxpayer realises that they have omitted a capital gain from a previous year's tax return. The taxpayer had originally assumed that the capital gain related to the later year of income. When the taxpayer discovers the mistake, the taxpayer requests an amendment to the prior year's tax assessment.
The taxpayer's assessment is amended and the taxpayer is liable to pay an additional amount of tax. GIC is payable on this amount. As the taxpayer voluntarily tells the Commissioner of the omission and the tax shortfall is less than $1000, section 226Z (ITAA 1936) applies and no penalty tax is applied. However, the taxpayer is still liable to pay the GIC. The taxpayer requests that the GIC be remitted in view of the voluntary disclosure.
Reasons for Decision
Where an assessment is amended to increase the amount of tax payable, a taxpayer is liable to pay the GIC under section 170AA (ITAA 1936). However, section 8AAG of the Taxation Administration Act 1953 (TAA 1953) allows the Commissioner to remit all or part of the GIC payable in appropriate circumstances.
Under section 8AAG (TAA 1953), the Commissioner may remit all or a part of the GIC.
Taxation Ruling IT 2444 and the ATO Receivables Policy provide guidelines for determining when the Commissioner will remit the GIC. It is clear from these guidelines that the GIC will be payable in most situations and remission will only be granted in limited circumstances. Paragraph 13 of Taxation Ruling IT 2444 states that the interest charge on underpayments of tax is designed to compensate the revenue for the full amount of tax not having been paid by the due date.
The taxpayer in this case has made a voluntary disclosure and penalty tax otherwise applicable has been reduced accordingly. However, applying the legislation and the guidelines, there is nothing further in the taxpayer's circumstances to also warrant remission of the GIC.
Date of decision: 17 April 2000
Legislative References:
Income Tax Assessment Act 1936
section 170AA
section 226Z
section 8AAG
subsection 8AAG(4)
Related Public Rulings (including Determinations)
IT 2444
Other References:
ATO Receivables Policy
Keywords
Taxation administration
Income tax penalties
Income tax shortfall
Remission of section 170AA interest
General interest charge
ISSN: 1445-2782
| Date: | Version: | |
| 17 April 2000 | Original statement | |
| You are here | 27 October 2006 | Archived |