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Taxation Laws Amendment Act (No. 3) 1999 (11 of 1999)

Schedule 1 Running balance accounts, general interest charge and related matters

Part 1 Amendments

Taxation Administration Act 1953

350 After Part II

Insert:

Part IIA - Charges and penalties for failing to meet obligations

Division 1 - The general interest charge

8AAA Overview

This Division explains how to work out the general interest charge on an amount.

Usually, a person is liable to pay the charge if an amount that the person must pay to the Commissioner is not paid on time. But there are also other circumstances in which a person can be liable.

A person is only liable to pay the charge if a provision of an Act makes the person liable. (Most of the provisions are in theIncome Tax Assessment Act 1936.)

8AAB When the general interest charge applies

(1) There are certain provisions of this Act and other Acts that make persons liable to pay the general interest charge. Subsections (4) and (5) list the provisions.

(2) A person is only liable to pay the charge on an amount if a provision specifies that the person is liable to pay the charge on the amount.

(3) The charge does not apply to the Commonwealth or an authority of the Commonwealth.

(4) The following table is an index of the provisions of theIncome Tax Assessment Act 1936 that deal with liability to the charge.

Liability to the charge under the Income Tax Assessment Act 1936
Item	Section	Topic
1	128C	payment of withholding tax
2	160ARU	payment of franking deficit tax
3	160ARUA	payment of deficit deferral tax
4	160ARV	payment of franking additional tax
5	160ARW	payment of franking deficit tax - amended assessments
6	163AA	returns by instalment taxpayers
7	163B	returns by persons other than instalment taxpayers
8	170AA	amended assessments
9	204	payment of tax assessed
10	220AAE	payment of RPS, PAYE and PPS deductions (large remitters)
11	220AAM	payment of RPS, PAYE and PPS deductions (medium remitters)
12	220AAR	payment of RPS, PAYE and PPS deductions (small remitters)
13	220AAW	non-electronic payment of RPS, PAYE and PPS deductions (large remitters)
14	220AS	deductions from reportable payments (RPS)
15	221AZMAA	payment of instalments by companies etc.
16	221AZP	underestimation of instalments by companies etc.
17	221EAA	deductions from salary or wages (PAYE)
18	221YD	payment of provisional tax or instalments of provisional tax
19	221YDB	provisional tax - income under-estimated or PAYE deductions over-estimated
20	221YHH	deductions from prescribed payments (PPS)
21	221YHZC	deductions from certain payments
22	221YHZD	payment of certain payments
23	221YN	payment of withholding tax
24	221ZC	payment of mining withholding tax
25	221ZD	deductions of mining withholding tax
26	221ZO	deductions - Australian Film Industry Trust Fund accounts
27	221ZP	payments - Australian Film Industry Trust Fund accounts
28	221ZXC	payments of farm management deposits
29	221ZXG	understated farm management deposits
30	222AJA	payments of estimates of certain amounts
(5) The following table is an index of the provisions of Acts other than theIncome Tax Assessment Act 1936 that deal with liability to the charge. Liability to the charge under other Acts
Item	Section	Act
1	93	Fringe Benefits Tax Assessment Act 1986
2	112	Fringe Benefits Tax Assessment Act 1986
3	65	Petroleum Resource Rent Tax Assessment Act 1987
4	85	Petroleum Resource Rent Tax Assessment Act 1987
5	68	Sales Tax Assessment Act 1992
6	91ZB	Sales Tax Assessment Act 1992
7	91ZC	Sales Tax Assessment Act 1992
8	21	Superannuation Contributions Tax (Assessment and Collection) Act 1997
9	22	Superannuation Contributions Tax (Assessment and Collection) Act 1997
10	25	Superannuation Contributions Tax (Assessment and Collection) Act 1997
11	18	Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Act 1997
12	21	Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Act 1997
13	49	Superannuation Guarantee (Administration) Act 1992
14	8AAN	Taxation Administration Act 1953
15	8AAT	Taxation Administration Act 1953
16	8AAZF	Taxation Administration Act 1953
17	8AAZN	Taxation Administration Act 1953
18	13	Taxation (Unpaid Company Tax) Assessment Act 1982
19	13	Termination Payments Tax (Assessment and Collection) Act 1997
20	16	Termination Payments Tax (Assessment and Collection) Act 1997
21	18	Tobacco Charges Assessment Act 1955
22	38	Wool Tax (Administration) Act 1964

8AAC Amount of the general interest charge

(1) The general interest charge for a day is worked out in accordance with this section.

(2) If the charge is payable under section 8AAZF on the RBA deficit at the end of that day, then the charge is worked out by multiplying the general interest charge rate for that day by the RBA deficit at the end of that day.

(3) If the charge is not payable under section 8AAZF, but applies to an amount that remains unpaid (the original unpaid amount ), then the charge is worked out by multiplying the general interest charge rate for that day by the sum of so much of the following amounts as remains unpaid:

(a) the charge from previous days;

(b) the original unpaid amount.

(4) If the charge applies to an amount that is specified in the provision that imposes the charge, but neither subsection (2) nor (3) applies, then the charge is worked out by multiplying the general interest charge rate for that day by the sum of the following amounts:

(a) so much of the charge from previous days as remains unpaid;

(b) the specified amount.

8AAD What is the general interest charge rate

(1) The general interest charge rate for a day is the rate worked out by adding 8 percentage points to the Treasury Note yield rate for that day, and dividing that total by the number of days in the calendar year.

(2) The Treasury Note yield rate for a day depends on which quarter of the year the day is in. For each day in a quarter in the second column of the table, it is the weighted average yield set at the last weekly tender for the 13 week Treasury Note before the end of the month in the third column of the table.

Treasury Note yield rate
Item	For days in this quarter...	the last weekly tender before the end of this month applies...
1	1 January to 31 March	the preceding November
2	1 April to 30 June	the preceding February
3	1 July to 30 September	the preceding May
4	1 October to 31 December	the preceding August
(3) The Treasury Note yield rate must be rounded to the second decimal place (rounding .005 upwards). 8AAE When the charge is due and payable The general interest charge for a day is due and payable to the Commissioner at the end of that day. Note: For rules about how the charge can be recovered, see Division 4. 8AAF Notification by Commissioner (1) The Commissioner may give notice to a person liable to pay the charge of the amount of the charge for a particular day or days. (2) If the amount of the charge specified in the notice is not a multiple of 5 cents, the Commissioner may round it down to the nearest multiple of 5 cents. (3) The notice may be included in any other notice issued by the Commissioner in respect of the person. 8AAG Remission of the charge (1) The Commissioner may remit all or a part of the charge payable by a person. (2) However, if a person is liable to pay the charge because an amount remains unpaid after the time by which it is due to be paid, the Commissioner may only remit all or a part of the charge in the circumstances set out in subsection (3), (4) or (5). (3) The Commissioner may remit all or a part of the charge referred to in subsection (2) if the Commissioner is satisfied that: (a) the circumstances that contributed to the delay in payment were not due to, or caused directly or indirectly by, an act or omission of the person; and (b) the person has taken reasonable action to mitigate, or mitigate the effects of, those circumstances. (4) The Commissioner may remit all or a part of the charge referred to in subsection (2) if the Commissioner is satisfied that: (a) the circumstances that contributed to the delay in payment were due to, or caused directly or indirectly by, an act or omission of the person; and (b) the person has taken reasonable action to mitigate, or mitigate the effects of, those circumstances; and (c) having regard to the nature of those circumstances, it would be fair and reasonable to remit all or a part of the charge. (5) The Commissioner may remit all or a part of the charge referred to in subsection (2) if the Commissioner is satisfied that there are special circumstances because of which it would be fair and reasonable to remit all or a part of the charge. 8AAH Judgment for payment of an unpaid amount (1) This section applies if judgment is given by, or entered in, a court for the payment of: (a) all or a part of an amount in respect of which a person is, or was, liable to pay the charge because the amount remains unpaid after the time by which it is due to be paid; or (b) an amount that includes all or a part of the unpaid amount. (2) The consequences of judgment being given or entered are: (a) the unpaid amount is not taken, for the purposes of a provision that makes, or would make, the person liable to pay the charge on the unpaid amount, to have ceased to be due and payable by reason only of the giving or entering of the judgment; and (b) if the judgment debt carries interest, the amount of the charge that the person would, if not for this paragraph, be liable to pay on the unpaid amount is reduced by: (i) in a case to which paragraph (1)(a) applies - the amount of the interest; or (ii) in a case to which paragraph (1)(b) applies - the amount worked out using the formula: (Unpaid amount or part of unpaid amount / Judgment debt) * Interest Division 2 - The failure to notify penalty 8AAI Overview This Division explains how to work out the failure to notify penalty on an amount. Generally, a person is liable to pay the penalty if the person must notify the Commissioner by a certain time of an amount that the person is liable to pay, and fails to do so. A person is only liable to pay the penalty if a provision of an Act makes the person liable. (Most of the provisions are in theIncome Tax Assessment Act 1936.) 8AAJ When the failure to notify penalty applies (1) There are certain provisions of other Acts that make persons liable to pay the failure to notify penalty. Subsection (4) lists the provisions. (2) A person is only liable to pay the penalty on an amount if a provision specifies that the person is liable to pay the penalty on the amount. (3) The penalty does not apply to exempt Australian government agencies. Note: Exempt Australian government agency is defined in subsection 995-1(1) of theIncome Tax Assessment Act 1997. (4) The following table is an index of the provisions in theIncome Tax Assessment Act 1936 that deal with liability to the penalty. Sections 91Z and 95A of theSales Tax Assessment Act 1992also deal with liability to the penalty. Liability to the penalty under the Income Tax Assessment Act 1936
Item	Section	Topic
1	220AAGA	payment of RPS, PAYE and PPS deductions (large remitter)
2	220AAOA	payment of RPS, PAYE and PPS deductions (medium remitter)
3	220AATA	payment of RPS, PAYE and PPS deductions (small remitter)
4	221YHZCA	deductions from certain payments
5	221YN	withholding tax
6	221ZC	mining withholding tax
7	221ZNA	Australian Film Industry Trust Fund accounts

8AAK Amount of the failure to notify penalty

(1) The failure to notify penalty on an amount is payable by a person for each day in the period that is specified in the provision which makes the person liable to pay the penalty.

(2) The penalty on an amount is worked out at the rate of 8% per annum of the amount.

8AAL Notification by Commissioner

(1) The Commissioner must give written notice to the person of:

(a) the amount of the penalty; and

(b) the day on which that amount of the penalty is due and payable, which must be at least 30 days after the notice is given to the person.

(2) The amount of the penalty is due and payable to the Commissioner on the day specified.

(3) The notice may be included in any other notice issued by the Commissioner in respect of the person.

Note: For rules about how the penalty can be recovered, see Division 4.

8AAM Remission of the penalty

The Commissioner may remit all or a part of the penalty payable by a person if the Commissioner is satisfied that:

(a) the circumstances that contributed to the failure to notify, or delay in notifying, the Commissioner were not due to, or caused directly or indirectly by, an act or omission of the person; and

(b) the person has taken reasonable action to mitigate, or mitigate the effects of, those circumstances.

8AAN Failure to pay the penalty

If any of the amount of penalty that a person is liable to pay remains unpaid after the day by which it is due to be paid, the person is liable to pay the general interest charge on the unpaid amount for each day in the period that:

(a) started at the beginning of the day by which the amount of the penalty was due to be paid; and

(b) finishes at the end of the last day on which, at the end of the day, any of the following remains unpaid:

(i) the penalty;

(ii) general interest charge on any of the penalty.

Note: The general interest charge is worked out under Division 1.

Division 3 - The late reconciliation statement penalty

8AAO Overview

This Division explains how to work out the late reconciliation statement penalty on an amount.

Generally, a person is liable to pay the penalty if the person must give the Commissioner a reconciliation statement, report or form by a certain time, and fails to do so.

A person is only liable to pay the penalty if a provision of an Act makes the person liable. (All of the provisions are in theIncome Tax Assessment Act 1936.)

8AAP When the late reconciliation statement penalty applies

(1) There are certain provisions of theIncome Tax Assessment Act 1936 that make persons liable to pay the late reconciliation statement penalty. Subsection (4) lists the provisions.

(2) A person is only liable to pay the penalty if a provision specifies that the person is liable to pay the penalty.

(3) The penalty does not apply to exempt Australian government agencies.

Note: Exempt Australian government agency is defined in subsection 995-1(1) of theIncome Tax Assessment Act 1997.

(4) The following table is an index of the provisions of theIncome Tax Assessment Act 1936 that deal with liability to the penalty.

Liability to the penalty under the Income Tax Assessment Act 1936
Item	Subsection	Topic
1	220AJ(5)	RPS payment report
2	221F(6)	PAYE deductions reconciliation statement
3	221YHDC(9A)	PPS payment summary
4	221YHZC(1AAA)	statement of deductions from certain payments
5	221YN(2C)	statement of withholding tax deductions
6	221ZC(2C)	statement of mining withholding tax deductions
7	221ZXD(4)	farm management deposits report

8AAQ Amount of the late reconciliation statement penalty

(1) The late reconciliation statement penalty is payable by a person for each week in the period that:

(a) starts on the day by which the statement, report or form referred to in the provision which makes the person liable to pay the penalty is due to be given to the Commissioner; and

(b) ends on the day before the Commissioner is given the statement, report or form.

(2) The penalty is $10 for each week, or part of a week. However, the penalty for a particular reconciliation statement cannot exceed $200.

8AAR Notification by Commissioner

(1) The Commissioner must give written notice to the person of:

(a) the amount of the penalty; and

(b) the day on which that amount of the penalty is due and payable, which must be at least 30 days after the notice is given to the person.

(2) The amount of the penalty is due and payable to the Commissioner on the day specified.

(3) The notice may be included in any other notice issued by the Commissioner in respect of the person.

Note: For rules about how the penalty can be recovered, see Division 4.

8AAS Remission of the penalty

(1) The Commissioner may remit all or a part of the penalty payable by a person if the Commissioner is satisfied that:

(a) the circumstances that contributed to the failure to give, or delay in giving, the Commissioner the statement, report or form referred to in the provision which makes the person liable to pay the penalty were not due to, or caused directly or indirectly by, an act or omission of the person; and

(b) the person has taken reasonable action to mitigate, or mitigate the effects of, those circumstances.

(2) The Commissioner may also remit all or a part of the penalty if the Commissioner is satisfied that there are special circumstances because of which it would be fair and reasonable to remit all or a part of the penalty.

8AAT Failure to pay the penalty

(a) started at the beginning of the day by which the amount of the penalty was due to be paid; and

(b) finishes at the end of the last day on which, at the end of the day, any of the following remains unpaid:

(i) the penalty;

(ii) general interest charge on any of the penalty.

Note: The general interest charge is worked out under Division 1.

Division 4 - Recovery of charges and penalties

8AAU Overview

This Division sets out how the Commissioner can recover unpaid amounts of the general interest charge, the failure to notify penalty and the late reconciliation statement penalty.

8AAV Recovery of amounts by Commissioner

(1) This Division applies to the following amounts if the amount is not paid to the Commissioner on or before the day by which the amount is due to be paid:

(a) an amount of the general interest charge under Division 1;

(b) an amount of the failure to notify penalty under Division 2;

(2) The amount may be sued for and recovered in a court of competent jurisdiction by the Commissioner, or a Deputy Commissioner, suing in his or her official name.

(3) The provisions of section 8ZL (which deals with averments) apply in proceedings for the recovery of the amount in a corresponding way to the way in which they apply in relation to a prosecution for a prescribed taxation offence within the meaning of Part III.

(4) A notice under section 8AAF, 8AAL or 8AAR given to a person by the Commissioner is prima facie evidence of the matters stated in the notice.

Note: Notices under those sections notify persons liable to pay amounts of how much the amounts are.

8AAW Substituted service

If the Commissioner is satisfied, after reasonable enquiry, that a person against whom proceedings for recovery of amounts are taken:

(a) is absent from Australia and does not have any attorney or agent in Australia on whom service of process can be effected; or

(b) cannot be found;

service of any process in the proceedings may, without the leave of the Court, be effected on the person by posting the process or a sealed copy of it in a letter addressed to the person at the person's last known place of business or residence in Australia.

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