Remission of General Interest Charges:

A General Interest Charge (GIC) is an interest charge levied by the ATO generally where an amount of tax is not paid by the payment due date or for unpaid tax debts and shortfall amounts. GIC is calculated daily on a compounding basis. It applies on each day in the period starting on the day on which the tax was due for payment to the day on which any of the tax remained unpaid. GIC may also apply where an individual or trustee fails to lodge an income tax return on time; the GIC is payable from the date tax is taken to be due and payable, which could be a day before an assessment is made. Our full service integrated practice includes a skilled and experienced team of lawyers, accountants, mortgage brokers and financial advisors who may greatly assist you in any Remission you wish to make.

The GIC rate for a day is worked out by dividing the base interest rate plus 7% by the number of days in the calendar year. The base interest rate is determined by reference to the monthly average yield of 90-day Bank Accepted Bills. The GIC daily compounding rate now applies to most taxes, including income tax, FBT, GST and PAYG, although the Commissioner has a discretion to apply the simple interest rate. GIC is deductible. It is to be deducted in the year in which the notice of assessment for the relevant tax debt is issued. This does not apply to GIC accruing after the assessment has been issued, from which point GIC is deductible on a daily basis. It is a debt due to the Commonwealth that may be sued for and recovered in the usual way. GIC is also a “present legal obligation” on each day an amount of tax remains unpaid.

GIC can arise if an amount (of tax, charge, levy or penalty) remains unpaid after the date on which it should have been paid. This may result from various situations, including a tax shortfall as a result of an amendment of an assessment or other correction, an instalment of tax being underestimated, a return lodged late, or a failure to remit certain amounts by electronic funds transfer. Our team of highly skilled Tax Solicitors may be able to assist you in advising your of your rights and ensuring that should your circumstances warrant a Remission that your are fully informed and assisted in any application.

An application can be made for Remission of GIC if it would be fair and reasonable in the circumstances. In deciding whether to reduce or cancel the GIC, the factors the ATO considers include: whether there were any extenuating circumstances that caused the delay in payment, what steps you took to relieve the effects of those circumstances, whether there are special circumstances. Considerations such as whether you were responsible for the delay in payment or if it was outside your control (due to such things as natural disasters, industrial action, an unforeseen collapse of a major debtor or the sudden ill health of key personnel) are also considered in any Remission Application.  If you were actually responsible, the ATO will examine whether it was an unforeseen result.  Special circumstances that would make remission fair and reasonable include situations where the payment of the full amount of GIC would result in serious financial hardship for you. Consultation with a specialised Taxation Lawyer can be immensely rewarding and useful in ensuring that your application for Remission has high prospects of success and that any result is delivered promptly and seamlessly.

If you need further legal advice on your matter, you may book an appointment with us by telephone on (02) 9233 4048 or by email to info@navado.com.au.

This webpage (and any material or wording appearing on this webpage) is provided for general information purposes only and does not constitute any Legal Advice. It does not take into account your objectives, your instructions or all of the relevant facts and/or circumstances. Navado accepts no responsibility to any person who relies on the information provided on this website. We further refer you to our Disclaimer.