Tax Laws Amendment (Transfer of Provisions) Act 2010 (79 of 2010)

Schedule 1   Collection and recovery of tax

Part 1   Main amendments

Income Tax Assessment Act 1997

3   After Division 4

Insert:

Division 5 - How to work out when to pay your income tax

Table of Subdivisions

Guide to Division 5

5-A How to work out when to pay your income tax

Guide to Division 5

5-1 What this Division is about

If your assessed income tax liability exceeds the credits available to you under the PAYG system, this Division explainswhen you must pay the excess to the Commissioner.

If your assessment is amended so that you must pay income tax, or pay more income tax than under the previous assessment, this Division explains:

(a) when you must pay the additional tax; and

(b) when any associated interest charges must be paid.

Note: For provisions about the collection and recovery of income tax and other tax-related liabilities, see Part 4-15 in Schedule 1 to theTaxation Administration Act 1953.

Subdivision 5-A - How to work out when to pay your income tax

Table of sections

5-5 When income tax is payable

5-10 When shortfall interest charge is payable

5-15 General interest charge payable on unpaid income tax or shortfall interest charge

5-5 When income tax is payable

Scope

(1) This section tells you when income tax you must pay for a*financial year is due and payable.

Note: The Commissioner may defer the time at which the income tax is due and payable: see section 255-10 in Schedule 1 to theTaxation Administration Act 1953.

(2) The income tax is only due and payable if the Commissioner makes an*assessment of your income tax for the year.

(3) However, if the Commissioner does make an*assessment of your income tax for the year, the tax may be taken to have been due and payable at a time before your assessment was made.

Note: This is to ensure that general interest charge begins to accrue from the same date for all like entities. General interest charge on unpaid income tax is calculated from when the tax is due and payable, not from when the assessment is made: see section 5-15.

Original assessments - self-assessment entities

(4) If you are a*self-assessment entity, the income tax is due and payable on the first day of the sixth month after the end of the income year.

Example: If your income year is the same as the financial year, your income tax would be due and payable on 1 December.

Original assessments - other entities

(5) If you arenot a*self-assessment entity, the income tax is due and payable 21 days after the day (the return day ) on or before which you are required to lodge your*income tax return with the Commissioner.

Note: For rules about income tax returns and when they are due, see Part IV of theIncome Tax Assessment Act 1936.

(6) However, if you lodge your returnon or before the return day and the Commissioner gives you a notice of*assessment (other than an amended assessment)after the return day, the income tax is due and payable 21 days after the Commissioner gives you the notice.

Amended assessments

(7) If the Commissioner amends your*assessment, any extra income tax resulting from the amendment is due and payable 21 days after the day on which the Commissioner gives you notice of the amended assessment.

Note: Shortfall interest charge may be payable, on any amount of extra income tax payable as a result of the amended assessment, for each day in the period that:

(a) starts at the time income tax was due and payable on your original assessment; and

(b) ends the day before the day on which the Commissioner gives you notice of the amended assessment.

5-10 When shortfall interest charge is payable

An amount of*shortfall interest charge that you are liable to pay is due and payable 21 days after the day on which the Commissioner gives you notice of the charge.

Note: Shortfall interest charge is imposed if the Commissioner amends an assessment and the amended assessment results in an increase in some tax payable. For provisions about liability for shortfall interest charge, see Division 280 in Schedule 1 to theTaxation Administration Act 1953.

5-15 General interest charge payable on unpaid income tax or shortfall interest charge

If an amount of income tax or*shortfall interest charge that you are liable to pay remains unpaid after the time by which it is due to be paid, you are liable to pay the*general interest charge on the unpaid amount for each day in the period that:

(a) starts at the beginning of the day on which the amount was due to be paid; 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 income tax or shortfall interest charge;

(ii) general interest charge on any of the income tax or shortfall interest charge.

Note 1: The general interest charge is worked out under Part IIA of theTaxation Administration Act 1953.

Note 2: Shortfall interest charge is worked out under Division 280 in Schedule 1 to that Act.