Taxation Determination
TD 92/150
Income Tax: can an amount of interest payable to a taxpayer under the Taxation (Interest on Overpayments and Early Payments) Act 1983 be applied by the Commissioner against an amount of tax which is assessed but not yet due and payable by the taxpayer?
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This Ruling has been reviewed as part of a project to review public rulings. The ATO view expressed in this Ruling is current as of 8 January 2018.
may be releasedI 1213202
| This Determination, to the extent that it is capable of being a 'public ruling' in terms of Part IVAAA of the
Taxation Administration Act 1953,
is a public ruling for the purposes of that Part. Taxation Ruling TR 92/1 explains when a Determination is a public ruling and how it is binding on the Commissioner. Unless otherwise stated, the Determination applies to transactions entered into both before and after its date of issue.
[Note: This is a consolidated version of this document. Refer to the Tax Office Legal Database (http://law.ato.gov.au) to check its currency and to view the details of all changes.] |
1. Yes. Under Division 3 of Part IIB of the Taxation Administration Act 1953 (TAA), the Commissioner may apply an amount of interest payable under that Act to a person in total or partial discharge of a Commonwealth tax liability of the person. The decisions in Re Mendonca; ex parte FC of T (1969) 15 FLR 256; at 259; and in Clyne v. DC of T (1981) 150 CLR 1 at 9; 81 ATC 4429 at 4432; (1981) 12 ATR 173 at 177, make it clear that a 'liability' to tax exists once an assessment has been served, notwithstanding that the tax is not yet due and payable.
2. Accordingly, the Commissioner has authority under Division 3 of Part IIB of the TAA to apply an amount of interest payable to a taxpayer under that Act against an amount of Commonwealth tax which has been assessed to the taxpayer, but which is not yet due and payable.
Example:
A has been issued with an income tax assessment on 7 May 1992. The tax assessed of $10,000 is due and payable on 5 June 1992. On 14 May 1992, A becomes entitled to interest of $5,000 under the Taxation (Interest on Overpayments and Early Payments) Act 1983. On 15 May 1992, the Commissioner applies the amount of $5,000 due to A against A's tax liability of $10,000. As from that date, A only has a tax liability of $5,000.
Commissioner of Taxation
27/08/92
92/1332-5
interest on overpayments;
application of interest on overpayments against tax liability
TIOEP Act 1983
TAA 1953 Pt IIB Div 3
Re Mendonca; ex parte FC of T
(1969) 15 FLR 256
Clyne v. DC of T
(1981) 150 CLR 1
81 ATC 4429
(1981) 12 ATR 173