INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IV - RETURNS AND ASSESSMENTS  

SECTION 170AA   LIABILITY OF TAXPAYER WHERE ASSESSMENT AMENDED  

170AA(1)   [Amount on which interest payable]  

Subject to this section, where an amendment of an assessment increasing the liability of a taxpayer to tax is made, the taxpayer is liable to pay the general interest charge, for each day in the period in subsection (4), on the amount (in this section referred to as the ``principal amount'') by which the tax payable by the taxpayer under the amended assessment exceeds the tax payable by the taxpayer under the assessment that was amended.

170AA(1AA)   [Amended assessment where penalty payable]  

Subsection (1) applies even if the amendment of the assessment is made in relation to a matter because of which the taxpayer is liable under Part VII to pay additional tax by way of penalty.

170AA(1A)   [Amended determination reducing credit]  

Subject to this section, where an amendment of a determination reducing a credit, or an offset within the meaning of Part IIIAA , allowable to a taxpayer is made, the taxpayer is liable to pay the general interest charge, for each day in the period in subsection (4), on the amount (in this section also called the ``principal amount'' ) by which the amount of the credit or offset allowable to the taxpayer under the amended determination is less than the amount of the credit or offset allowable to the taxpayer under the determination that was amended.

170AA(2)   [Amended determination where penalty payable]  

Subsection (1A) applies even if the amendment of the determination is made in relation to a matter because of which the taxpayer is liable under Part VII to pay additional tax by way of penalty.

170AA(3)   [Increased additional tax of taxpayer, partnership or trustee]  

Where:

(a) a taxpayer is liable to pay or would, but for subsection (11), be liable to pay, general interest charge under subsection (1) or (1A) on an amount (in this subsection referred to as the ``base amount'' ), being the whole or a part of the principal amount; and

(b) as a result of the amendment by virtue of which the general interest charge became payable, an amendment of an assessment is made increasing:

(i) the liability of the taxpayer (in this subsection referred to as the ``penalty payer'' ) to additional tax under Part VII ;

(ii) the liability of a partner (in this subsection also referred to as the ``penalty payer'' ) in a partnership in which the taxpayer is or was a partner to additional tax under section 226N , 226P or 226Q ; or

(iii) the liability of the trustee (in this subsection also referred to as the ``penalty payer'' ) of a trust estate of which the taxpayer is or was a beneficiary to additional tax under section 226R , 226S or 226T ,

the penalty payer is liable to pay the general interest charge, for each day in the period in subsection (4), on the amount ascertained in accordance with the formula

AB C

,

where:

A is so much of the additional tax payable by the penalty payer under the amended assessment as is attributable to the amendment by virtue of which the general interest charge referred to in paragraph (a) became payable;

B is the number of whole dollars in the base amount; and

C is the number of whole dollars in the principal amount.

170AA(4)   [Method of calculating interest payable]  

The general interest charge payable by a taxpayer under subsection (1) or (3) in relation to an amended assessment (in this subsection referred to as the ``current amended assessment'' ) or under subsection (1A) in relation to an amended determination (in this subsection called the ``amended determination'' ) in respect of a year of income is payable for each day in the period that:

(a) started at the beginning of:

(i) in a case to which subsection (1) or (1A) applies and the taxpayer is not a relevant entity within the meaning of Division 1B of Part VI , an instalment taxpayer within the meaning of Division 1C of Part VI or a full self-assessment taxpayer - the day on which tax became due and payable by the taxpayer under the first assessment in respect of income of the taxpayer of the year of income; or

(ia) in a case to which subsection (1) or (1A) applies and the taxpayer is a relevant entity within the meaning of Division 1B of Part VI - the day on which the payment of tax by the taxpayer was, or, if paragraph 221AZD(b) had applied, would have been, required to be made under paragraph 221AZD(b) in respect of the relevant year of income; or

(ib) if subsection (1) or (lA) applies and the taxpayer is an instalment taxpayer within the meaning of Division 1C of Part VI - the day specified in Table 1 in subsection 221AZK(2) as the day on which the final instalment for the relevant year of income was required to be paid by taxpayers of the same classification as the taxpayer (whether or not the taxpayer is required to pay such an instalment); or

(ic) if subsection (1) or (1A) applies and the taxpayer is a full self-assessment taxpayer - the day on which tax became due and payable under the first assessment in respect of income of the taxpayer of the year of income;

(ii) in a case to which subsection (3) applies - the day on which additional tax under Part VII became due and payable by the taxpayer under the assessment referred to in paragraph (3)(b) or, if that assessment was previously amended on one or more occasions, under that assessment before any amendment; and

(b) finishes at the end of the day before the current amended assessment or the amended determination is made.

Note:

The general interest charge is worked out under Division 1 of Part IIA of the Taxation Administration Act 1953 .

170AA(5)   [Date when general interest charge payable]  

If general interest charge (the primary general interest charge ) is payable by a taxpayer under subsection (1), (1A) or (3), the Commissioner may give a notice to the taxpayer specifying a date after which general interest charge will apply under subsection (5A). The specified date must be at least 30 days after the notice is given.

170AA(5A)   [Liability to charge]  

If the primary general interest charge remains unpaid after the day specified in the notice, the taxpayer is liable to pay general interest charge on the unpaid amount.

170AA(5B)   [Period for which liable]  

The taxpayer is liable to pay the general interest charge for each day in the period that:

(a) started at the beginning of the day specified in the notice; and

(b) finishes at the end of the last day on which, at the end of the day, any of the following remains unpaid:

(i) primary general interest charge;

(ii) general interest charge on primary general interest charge.

170AA(6)   [Notice of nil assessment and later tax assessed]  

Where:

(a) the Commissioner has served notice in respect of a taxpayer to the effect that the taxable income of the taxpayer of the year of income is nil or that no tax is payable on the taxable income of the taxpayer of a year of income; and

(b) the Commissioner subsequently makes an assessment of the taxable income of the taxpayer of the year of income and of the tax payable on that taxable income,

the following provisions have effect for the purposes of this section:

(c) the notice referred to in paragraph (a) shall be deemed to be an assessment (in this subsection referred to as the ``notional assessment'' ) on which a nil amount of tax became due and payable at the end of 30 days after the date of service of the notice; and

(d) the assessment referred to in paragraph (b) shall be deemed to be an amendment of the notional assessment.

170AA(7)   [Relevant entities with no tax payable: Div 1B Pt VI]  

For the purposes of subsection (6), if the taxpayer is a relevant entity within the meaning of Division 1B of Part VI and, on the basis of the entity's return, either:

(a) the taxable income of the entity of the year of income is nil; or

(b) no tax is payable on the taxable income of the entity of the year of income;

then:

(c) the Commissioner is deemed for the purposes of paragraph 6(a) to have served notice in respect of the entity; and

(d) paragraph 6(c) applies as if all words after ``payable'' were omitted and there were substituted ``on the day that would have applied under subparagraph 4(a)(ia) if the notional assessment had been an assessment and the assessment referred to in paragraph (b) had been an amendment of the notional assessment''.

170AA(7A)   [Instalment taxpayers with no tax payable: Div 1C Pt VI]  

If Division 1C of Part VI applies to the taxpayer for a year of income and, on the basis of the taxpayer's return, the taxable income was nil or no tax was payable on the taxable income, the following provisions apply for the purposes of subsection (6):

(a) the Commissioner is taken to have served a notice of the kind specified in paragraph (6)(a); and

(b) the reference in paragraph (6)(c) to the end of 30 days after the date of service of the notice is to be read as a reference to the due date that applies under section 221AZT .

170AA(7B)   [Self-assessment taxpayer]  

If the taxpayer is a full self-assessment taxpayer for a year of income and, on the basis of the taxpayer's return, the taxable income or net income was nil, or no tax was payable on the taxable income or net income, the following provisions apply for the purposes of subsection (6):

(a) the Commissioner is taken to have served a notice of the kind specified in paragraph (6)(a);

(b) the reference in paragraph (6)(c) to the end of 30 days after the date of service of the notice is to be read as a reference to the date on which the tax becomes due and payable under subsection 204(1A) .

170AA(8)   [General interest charge less than 50 cents]  

Where, but for this subsection, the amount of the general interest charge that would be payable under subsection (1), (1A) or (3) by a taxpayer is less than 50 cents, the general interest charge is not payable by the taxpayer under that subsection.

170AA(9)   [``income tax'' or ``tax'']  

Unless the contrary intention appears, in sections 172 , 205 , 206 , 215 , 216 , 254 , 255 , 258 and 259 , but not in any other section, income tax or tax includes the general interest charge payable under this section.

170AA(10) - (13)    

170AA(14)   [Definitions]  

In this section, unless the contrary intention appears -

"tax"
does not include additional tax payable under section 104 ;

"taxpayer"
includes a penalty payer referred to in subsection (3) of this section.

170AA(15)   [No application 2000/01 year of income onwards]  

This section does not apply to amendments relating to the 2000-01 year of income or a later year of income.