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04 Apr 1212 When is the shortfall interest charge incurred? - TD 2012/2

On 4 April 2012 the ATO issued a taxation determination TD 2012/2 entitled “Income tax: when is the shortfall interest charge incurred for the purposes of paragraph 25-5(1)(c) of the Income Tax Assessment Act 1997?”

The determination says that shortfall interest charge (SIC) is incurred for the purposes of s 25-5(1)(c) ITAA 1997 in the year of income the Commissioner gives a taxpayer a notice of amended assessment. This is the case even if the SIC liability is notified separately from the notice of amended assessment, or if the SIC is unpaid at the end of that year of income (for example, because the due date for payment of the SIC falls in the next year of income).

For years of income preceding the application of SIC, the ATO takes the same view of when the general interest charge (GIC) is incurred by a taxpayer who is liable to pay GIC because an additional amount of tax is payable under an amended assessment.

The determination was previously issued in draft form as TD 2011/D11.

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