When GIC applies
We may apply GIC if an amount of tax or some other liability remains unpaid after the date it should have been paid. This includes where:
- there is a tax shortfall because of an amendment or correction
- an instalment of tax is underestimated
- a return is lodged late.
Why we apply GIC
We apply GIC to:
- encourage timely payment of tax
- ensure taxpayers who pay late don't have an unfair financial advantage over taxpayers who pay on time
- compensate the community for the cost of late payment.
How much GIC we apply
We review the GIC rate quarterly. GIC is calculated on a daily compounding basis on the amount overdue.
Generally, the amount of GIC applied is notified in:
- a statement of account
- a late payment notice
- GIC notice.
Effect of GIC on income tax
You may claim a deduction for GIC in your income tax return for the financial year in which the GIC is incurred. If you claim the deduction, you’ll need to include the remitted GIC as income in your return for the financial year in which the remission is granted.
Remission of GIC on late payment of debts
You can ask us to remit the GIC. We may remit the GIC if there are extenuating circumstances.