03 Aug 06 Guidelines for remission of interest charges - PS LA 2006/8On 1 August 2006, the ATO issued Practice Statement PS LA 2006/8 entitled "Remission of shortfall interest charge and general interest charge for shortfall periods". The purpose of the Practice Statement is to provide guidelines on the remission of shortfall interest charge and general interest charge accrued during shortfall periods.
In a media release issued on the same day, the Commissioner, Michael D’Ascenzo, said the Practice Statement recognises that there are circumstances where it is fair and reasonable to remit interest charges imposed on a shortfall of tax.
“This is an important step forward in showing the community that we are fair and reasonable when it comes to interest charges. There are situations which justify the Commonwealth bearing the cost of delayed tax payments. The practice statement outlines the circumstances in which interest charges can be remitted back to taxpayers,” Mr D’Ascenzo said.
Mr D’Ascenzo said that examples of such circumstances include:
- where there is a delay by the ATO
- where the ATO or taxpayer experiences unavoidable delays in obtaining information from third parties, and
- where the taxpayer has relied in good faith on ATO advice, publications or interpretive decisions.
The shortfall interest charge was introduced for tax shortfalls for the 2004-05 and later income years. To recognise this, the Commissioner will reduce the GIC on income tax amendments to the lower SIC rate for the period after 1 July 2005. The ATO will take steps to remit interest charges where it is justified to do so. Taxpayers may also apply for remission to the ATO.
For a copy of Practice Statement PS LA 2006/8, go here
For a copy of the ATO media release, No Nat 2006/29, 1 August 2006, go here