Lodgment deferral
We apply a risk-based approach on a measure-by-measure basis to determine whether to allow specific taxpayers to defer lodgment of tax returns due to special circumstances arising from the introduction of a new measure.
Payment deferral
Generally, our debt management policy, as set out in PS LA 2011/14 General Debt collection powers and principles, applies in relation to new measures. In most cases, we will not defer the due date for payment merely because the new measure imposes new payment obligations. However, we will consider arrangements to pay by instalments, depending on the measure or the taxpayer's circumstances.
Failure to lodge (FTL) penalties
We seldom remit FTL penalties based solely on taxpayers failing to lodge because they expect their lodgment obligations to change as a consequence of new legislation. We will only consider doing this on a case-by-case basis after taking the taxpayer's circumstances into account.
Further, the question of FTL penalties would only arise in cases where the question of deferral of the lodgment due date had not been considered at an earlier point.
If you lodge and self-assess in line with the existing law
If you lodge a return or activity statement in accordance with the existing law and later amendments or revisions are required because of the effect of a retrospective law change and the amendments or revisions:
- reduce your liability, we will pay appropriate interest on any overpayment
- increase your liability
- no tax shortfall penalties will apply
- any interest attributable to the shortfall will be remitted to nil up to the date of enactment of the law change
- any interest accruing after the date of enactment will be remitted if you actively sought to amend your assessments or revise your activity statements within a reasonable time after the enactment of the law change (a reasonable time to be determined on a case-by-case basis).
If you self-assess by anticipating an announced law change
If you lodge a return or activity statement, anticipating an announced law change and the retrospective law changes:
- are as anticipated, your self assessment will not be affected
- are not as anticipated (for instance, because amendments were made to the relevant legislation during the parliamentary process), you'll need to make an amendment or revision.
If you make an amendment or revision and it:
- reduces your liability, we will pay appropriate interest on any overpayment
- increases your liability
- no tax shortfall penalties will apply, on the basis that it is reasonable for a taxpayer to follow an announced government proposal to change the law and that the existence of such an announcement represents special circumstances
- any interest accrued will be remitted to the base interest rate up to the date of enactment of the relevant law change
- any interest in excess of the base rate accruing after the date of enactment will be remitted if you actively seek to amend assessments or revise activity statements within a reasonable time after enactment of the law change ('a reasonable time' to be determined on a case-by-case basis).
If the announced law change is not enacted
On rare occasions an announced law change may not be enacted – for example, because it is rejected altogether by the parliament. Some taxpayers may have lodged returns or activity statements anticipating the announced law change. Other taxpayers may have lodged and self-assessed under the existing law but delayed payment of a liability in anticipation that it would be removed by the announced law change.
In these cases we will publicly advise taxpayers that the law has not been enacted, explaining the relevant circumstances and the need for affected taxpayers to seek amendments to their assessments or lodge revised activity statements as necessary and make any consequent tax payments.
If you need to make an amendment or revision, the interest and penalty consequences will be as outlined above, depending on whether you self-assessed by anticipating the announced change or not. The interest consequences for delayed payments will be similar, although we won't apply penalties.
Find out more
- Practice Statement Law Administration (PSLA) 2007/3 Remission of penalty for failure to comply with obligations in relation to tax invoices, adjustment notes or third party adjustment notes
- Practice Statement Law Administration (PSLA) 2007/4 Remission of penalty for failure to comply with GST registration obligations
- Practice Statement Law Administration (PSLA) 2007/11 Administrative treatment of taxpayers affected by announced but unenacted legislative measures, which will apply retrospectively when enacted
Next steps
Our position on interest and penalties in the case of retrospective changes to the tax law.