A New Tax System (Tax Administration) Act 1999 (179 of 1999)

Schedule 10   Pay as you go (PAYG) system of collecting income tax etc. liabilities

Part 1   Amendment of the Taxation Administration Act 1953

14   After section 45-230 in Schedule 1

Insert:

45-232 Liability to GIC on shortfall in quarterly instalment worked out on the basis of estimated benchmark tax

(1) You are liable to pay the *general interest charge under this section if:

(a) the amount of your instalment for an *instalment quarter (the variation quarter ) in an income year is worked out under paragraph 45-112(1)(b) or (c) on the basis of your estimate of your *benchmark tax for that income year; and

(b) the estimate used is less than 85% of your *benchmark tax for the income year (which the Commissioner works out under section 45-365).

Amount on which the charge is payable

(2) You are liable to pay the *general interest charge on the amount worked out as follows (if it is a positive amount):

Acceptable amount of your instalment for the later quarter - Actual amount of your instalment for the later quarter

where:

actual amount means:

(a) the amount of your instalment, as worked out on the basis of the estimate; or

(b) if, as a result of using the estimate, you claimed a credit under section 45-420 for the variation quarter - the amount of the credit, expressed as a negative amount.

(3) The acceptable amount of your instalment for an *instalment quarter in an income year is:

(a) if the amount of the instalment is worked out under paragraph 45-112(1)(b) or (c) - the amount worked out using the table in this subsection (which can be a negative amount); or

(b) otherwise - the amount notified to you by the Commissioner under paragraph 45-112(1)(a) as the amount of your instalment for that *instalment quarter.

Period for which the charge is payable

(4) You are liable to pay the charge for each day in the period that:

(a) started at the beginning of the day by which the instalment for the variation quarter was due to be paid; and

(b) finishes at the end of the earlier of the following days:

(i) the day on which your assessed tax for the income year is due to be paid;

(ii) the last day on which you pay any of that tax.

Commissioner to notify you

(5) The Commissioner must give you written notice of the *general interest charge to which you are liable under subsection (2). You must pay the charge within 14 days after the notice is given to you.

Further charge if charge under subsection (2) remains unpaid

(6) If any of the *general interest charge to which you are liable under subsection (2) remains unpaid at the end of the 14 days referred to in subsection (5), you are also liable to pay the *general interest charge on the unpaid amount for each day in the period that:

(a) starts at the end of those 14 days; 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) the unpaid amount;

(ii) general interest charge on the unpaid amount.

45-233 Reduction in GIC liability under section 45-232 if shortfall is made up in later instalment

(1) This section reduces the amount (the shortfall ) on which you are liable to pay the *general interest charge under subsection 45-232(2) if, for a later *instalment quarter (the later quarter) that is in the same income year as the variation quarter, the amount worked out as follows is a negative amount:

Total value of assets available to pay ordinary debts * [Notified amount / (Notified amount + Amount of remaining ordinary debts)]

That amount (expressed as a positive number) is called the top up .

(2) For the purposes of the formula in subsection (1):

actual amount of your instalment for the later quarter means:

(a) the amount of your instalment for the later quarter, as worked out under section 45-112; or

(b) if you claimed a credit under section 45-420 for the later quarter - the amount of the credit, expressed as a negative amount.

Amount of the reduction

(3) The shortfall is reduced by applying so much of the top up as does not exceed the shortfall.

(4) However, if some of the top up has already been applied (under any other application or applications of this section) to reduce the amount on which you are liable to pay the *general interest charge under subsection 45-232(2) as it applies to a different *instalment quarter, the shortfall is reduced by applying so much of the top up as has not already been applied, and does not exceed the shortfall.

Period for which reduction has effect

(5) The reduction has effect for each day in the period that:

(a) started at the beginning of the day by which the instalment for the later quarter was due to be paid; and

(b) finishes at the end of the earlier of the following days:

(i) the day on which your assessed tax for the income year is due to be paid;

(ii) the last day on which you pay any of that tax.