TAXATION RULING NO. ST NS5

STNS 5

Sales Tax: guidelines for the remission of additional tax

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FOI status:

May be releasedFOI number: I 1211623

PREAMBLE

This Ruling does not have the force of law. Decisions relating to the remission of additional tax are made on the merits of each individual case having regard to this Ruling.

Chapter 1: What this ruling is about

1.1 Sales taxpayers have a number of obligations under the sales tax legislation (1). Failure to meet these obligations may result in prosecution (2) (in some cases) or the imposition of a penalty by way of additional tax. This Ruling explains the circumstances under which a person may become liable for additional tax and sets out guidelines for the remission (or reduction) of the amount of additional tax imposed by the various Sales Tax Assessment Acts.

1.2 Additional tax is imposed under sections of the Assessment Acts for various reasons at rates set out in the relevant sections. These reasons include, but are not limited to:

paying tax late;

lodging late returns or supplying information late; and

making false or misleading statements.

1.3 The provisions dealing with additional tax recognise that there will be circumstances where it is fair for the amount of additional tax to be reduced from the amount specified in the provision imposing it. As a result the Commissioner is given the power to reduce the additional tax imposed. In the language used by the Sales Tax legislation, the power to reduce the statutory amount of additional tax is referred to as the Commissioner's discretion to remit the whole or any part of the additional tax (3).

1.4 This Ruling sets out guidelines for the exercise of the discretions to remit additional tax by authorised officers. The comments in this Ruling do not replace an authorised officer's exercise of the discretion, but provide guidance on the sorts of factors which ought to be taken into account when making a responsible decision within the bounds of legal authority. Ultimately, the responsibility rests with authorised officers to apply the law using these guidelines, in light of the facts and circumstances of each case, in a logical and consistent manner.

1.5 A given set of circumstances may result in additional tax becoming payable under more than one section. For example, if a person makes a false or misleading statement and later, when that statement is discovered to be false, further tax is recovered, additional tax may be imposed under both subsection 29(1) (for late payment) and subsection 45(2) (in respect of the false statement). However, for the purposes of this Ruling, exposure to additional tax is considered separately under each section of the Act and commented upon in separate Chapters.

1.6 In this Ruling the words taxpayer and person are used to refer to and include individuals, companies, partnerships and trusts. Circumstances warranting remission for an individual will apply to companies, partnerships and trusts if it can be said that those circumstances apply to the respective officers, partners or trustees.

1.7 References to sections and subsections relate to Sales Tax Assessment Act (No. 1) 1930 unless otherwise specified (4). The principles in this Ruling apply to all taxpayers, whether lodging on a quarterly or a monthly basis.

1.8 Penalty calculations will generally be based upon net tax payable after deducting credits (such as discounts allowed, bad debts, returns inwards and belated quotations of certificate) for the period in question.

Summary of changes to previous guidelines

1.9 This ruling brings about four key changes to previous guidelines. The ruling:

sets out a flat rate of 2% additional tax in typical cases of failure to lodge returns or furnish information (see paragraph 4.6) and 10% for refusal cases under subsection 45(1) (see paragraph 4.7);

removes any notional per annum component in the calculation of additional tax for false or misleading statements under subsection 45(2) and sets out five categories of typical remission rate (see paragraphs 5.5 to 5.8);

extends concessional treatment similar to that for voluntary disclosures to taxpayers who have been notified of impending audits and make disclosures arising from audits undertaken by them or on their behalf (see paragraphs 5.18 to 5.20); and

alters the rate of additional tax applying to voluntary disclosures to allow for the difference between inadvertent errors disclosed when they become known and deliberate attempts at concealment (see paragraphs 5.16 to 5.20).

Chapter 2: Date of effect

2.1 Sales Tax Rulings are altered from time to time, by the publication of revised Rulings and in other ways. Where the advice given in a Sales Tax Ruling is altered, that alteration may take effect at some specified time in the future. Usually this occurs when the advice which is altered was based on a long established interpretation and any change is likely to have a significant effect.

2.2 This Ruling withdraws several Sales Tax Rulings and supersedes the other general rulings listed at Appendix A. To the extent that the withdrawal of those Rulings has the effect of requiring a person to pay less tax than if those Rulings remained in force, this Ruling will take effect immediately. To the extent that the withdrawal of those Rulings has the effect of requiring a person to pay more tax than if those Rulings remained in force, this Ruling will take effect from 24 February 1992.

RULING Chapter 3: Penalty for unpaid tax

Effect of subsection 29(1)

3.1 Subsection 29(1) imposes additional tax for late payment at the rate of 20% per annum on tax that remains unpaid after it is due and payable. In this context tax includes:

tax shown as payable on a sales tax return;

further tax that should have been shown on a return;

and additional tax imposed under Part VIII (which includes sections 45 and 46) of the Act.

3.2 Additional tax for late payment will apply where payment of tax is delayed for any reason, including taxable sales being returned in a month later than they occurred. (Additional tax in relation to false or misleading statements may also apply in this instance - see Chapter 5.)

Calculation of penalty for unpaid tax

3.3 Additional tax for late payment is calculated from the date the sales tax was originally due for payment to the date when the tax is paid. In the usual case, tax will be due 21 days after the close of the period in which the transaction giving rise to the tax occurred.

3.4 The calculation is based on the actual tax unpaid. Therefore if a taxpayer pays part of the tax by the due date, additional tax is calculated on the balance. Where sales tax has been unpaid in more than one period, the additional tax for late payment is calculated from the due date for each period.

3.5 Where tax is unpaid over a period of several months it may not always be possible to determine the precise dates tax was due. In such a case, tax unpaid is apportioned over the relevant period. For example, if $6,000 in sales tax has been unpaid over a 6 month period, additional tax will be calculated on the basis that $1,000 was unpaid each month, subject to any evidence to the contrary.

Remission of penalty for unpaid tax

3.6 Subsection 29(2) provides that the Commissioner may remit all or part of the additional tax imposed under subsection 29(1). It specifies three possible grounds for doing so, namely where:

the delay was beyond the control of the taxpayer;

despite the fact the delay was subject to the control of the taxpayer, the circumstances were such that it would be fair and reasonable to remit any or all of the additional tax; or

there are special circumstances under which it is fair and reasonable to remit any or all of the additional tax.

3.7 In each of the first two cases mentioned in paragraph 3.6, the remission of additional tax is conditional upon the taxpayer having taken reasonable steps to minimise the delay in payment or its effects. Examples of grounds for remission under these two categories include:

the taxpayer has lost records due to a natural disaster (and makes arrangements with the Taxation Office to pay late); or

the taxpayer becomes suddenly ill (and a member of the family makes arrangements with the Taxation Office for late payment).

3.8 One example of special circumstances might be where actions of the Taxation Office led the taxpayer to a genuine belief that payment was due later. Another might be where a taxpayer, although careful, has made an understatement through inadvertent error which he or she later discovers and voluntarily discloses. However, voluntary disclosure of an understatement made deliberately, recklessly or carelessly (5) will not, by itself, constitute special circumstances.

Chapter 4: Penalty for failure or refusal to furnish returns or information

Effect of subsection 45(1)

4.1 Subsection 45(1) of the Act imposes additional tax equal to 200% of the tax payable by a person where that person fails or refuses to:

lodge a return; or

supply any information relating to goods when and as required (6).

4.2 For the purposes of this chapter, the expression failure to furnish refers to both a failure to lodge returns and a failure to supply information and refusal to furnish includes both a refusal to lodge returns and a refusal to supply information.

4.3 A taxpayer will be considered to have refused to furnish if he or she does not comply with a notice in writing requesting him or her to do so under section 22 or section 23. Failure to furnish means the failure to comply with the normal requirements for lodgment of returns under section 21.

4.4 The penalty for failure or refusal to furnish is imposed as a flat rate, based on the tax payable. In the case of late lodgment of returns, a late return and a late payment of the related tax will result in penalties under both subsection 29(1) (for late payment) and subsection 45(1) (for late lodgment).

Remission of penalty in typical cases

4.5 Subsection 47(3) contains the discretion to remit all or part of the additional tax imposed under subsection 45(1). The extent of the remission will depend on the circumstances of each case and the culpability (or blameworthiness) of the person. A taxpayer who refuses to lodge a return will be subject to a greater percentage of additional tax than a person who simply fails to meet the requirements set out in the law. Paragraphs 4.6 to 4.11 set out the remission that may be expected in typical cases as well as explaining factors warranting a departure from that standard (whether further decreasing or increasing penalty).

Failure to furnish

4.6 Persons who fail to furnish (as defined in paragraphs 4.2 and 4.3) will ordinarily have the additional tax reduced to an amount equal to 2% of the tax payable in relation to goods, unless there are factors such as those set out in paragraphs 4.8 to 4.11 which warrant a variation from that figure.

Refusal to furnish

4.7 Persons who refuse to furnish (as defined in paragraphs 4.2 and 4.3) will ordinarily have the additional tax reduced to an amount equal to 10% of the tax payable in relation to goods, unless there are factors such as those set out in paragraphs 4.8 to 4.11 which warrant a variation from that figure.

Mitigating and aggravating factors

Circumstances warranting further remission

4.8 In the case of either a failure or a refusal to furnish, a decrease from the suggested rates would be warranted where there are factors affecting the taxpayer's ability to comply with his normal obligations or a particular notice (as the case may be), such as:

the taxpayer had genuine comprehension difficulties; or

at the time the return was due, or the notice required action, the taxpayer or some immediate family member was suffering from serious illness or other similar problems.

The decrease will typically be 25% of the amount of additional tax for each factor, provided it was a significant reason for the failure or refusal to furnish.

4.9 Other factors which might be considered in justifying a decrease in the amount of additional tax for failure or refusal to furnish include:

the previous good lodgment history of the taxpayer;

any action taken by the taxpayer to minimise the delay or its effects; or

(in the case of a failure to furnish only) the fact that the return or information was subsequently lodged voluntarily.

4.10 Where the delay in lodgment is a result of neglect, inadvertence or omission by the taxpayer, a decrease from the typical figure will not generally be warranted. The following explanations will therefore not usually be regarded as acceptable grounds for further remission:

the taxpayer forgot;

the taxpayer was overseas; or

key staff were absent.

Circumstances warranting increase

4.11 In the cases of repeated failures or refusals to furnish, the amount of additional tax may be increased from the figure suggested for typical cases. Circumstances warranting increase include that:

there have been previous impositions of additional tax under this subsection;

co-operation has not been reasonable and, as a result, there have been undue or excessive delays in the completion of official enquiries; or

deliberate steps have been taken to conceal the need to lodge returns, for example, the falsification of records. Failure to lodge resulting from a failure to register 4.12 The sales tax law requires that a person who must apply for registration for sales tax purposes must do so within a specified time (7). Where a person who is liable to register for sales tax purposes applies after that time (without prompting by the Taxation Office) and lodges returns at the time of making the application, additional tax for late lodgment will generally not be raised on those returns. However, where a person fails to register until requested to do so by the Taxation Office, additional tax for late lodgment will not automatically be remitted. (NB: A failure to register may also result in prosecution (8).)

Chapter 5: Penalty for false or misleading statements

Effect of subsection 45(2)

5.1 Subsection 45(2) imposes additional tax equal to 200% of the tax payable by a person in respect of certain false or misleading statements. Additional tax is payable where, for a purpose in connection with a sales tax law, a person:

makes a statement to a taxation officer or to another person (say, a supplier) which is false or misleading in a material particular; or

omits from a statement to such a person something that renders it misleading in a material particular, and this results, or would have resulted, in an underpayment of tax.

5.2 For these purposes, a false statement is one which is erroneous or contrary to fact and a misleading statement is one which is capable of leading a reasonably prudent and competent person into error.

5.3 A duty of care rests with the taxpayer to ensure that his or her statements and disclosures to the Taxation Office are truthful and complete. In the case of marginal or contentious issues, a taxpayer should make a full and accurate disclosure to the Taxation Office, rather than risk additional tax under subsection 45(2).

5.4 An intention to deceive is not a factor in the application of subsection 45(2). When a statement is false or misleading, despite the fact that it is honestly made, it is still subject to additional tax. However, as explained in paragraphs 5.5 and 5.6, a taxpayer who knew of his obligations or liabilities, yet nevertheless dishonestly made false or misleading statements or omissions will be subject to a higher level of additional tax than a person who has made an honest mistake.

Remission of additional tax

5.5 Under subsection 47(3) the Commissioner may remit all or part of the additional tax imposed under subsection 45(2). Whilst an intention to deceive is not a factor in the application of additional tax, matters such as intent, knowledge and honesty may be taken into account in considering any remission of additional tax. Taxpayers who have deliberately made false statements in an attempt to avoid a known liability will be treated less favourably in relation to remission than taxpayers who have made such statements honestly. The degree of remission therefore relates to the culpability (or blameworthiness) of the taxpayer.

5.6 The factors to be considered when determining the extent of a taxpayer's culpability are listed below. The descriptions are given simple labels for ease of reference:

Deliberate statement

the taxpayer's statement was deliberately made without belief in its truth or was intended to mislead in the face of a known liability or obligation - this would be the most highly penalised category of culpability;

Reckless statement

the taxpayer's statement, although neither known to be untrue nor dishonestly made, was made recklessly or rashly without any real basis in fact or regard to the consequences;

Careless statement

the taxpayer's statement was careless, meaning that it was made as a result of negligence or thoughtlessness on the taxpayer's part, producing a result which the taxpayer could reasonably be expected to recognise as incorrect or at least subject to doubt;

Inadvertent Error

the taxpayer's statement, even though false or misleading, has occurred through an inadvertent error or honest mistake, and there was no intention to deceive, producing a result which the taxpayer could not reasonably be expected to have recognised as incorrect; or

Genuinely Misled

the taxpayer has made the statement as a result of being genuinely misled by actions of the Taxation Office.

Typical remission according to culpability

5.7 The table below sets out a range of suggested rates of additional tax in respect of the factors referred to in the previous paragraph. These typical rates do not take into account any mitigating or aggravating circumstances referred to in paragraphs 5.9 to 5.11 and assume a reasonable level of co-operation by the taxpayer. A range for each culpability type allows the authorised officer to take into account the facts relating to each particular case.

5.8 In determining a penalty rate within a range, the authorised officer may have regard to the significance of the underpayment in relation to the tax paid. For example, a false or misleading statement carelessly made, that results in the omission of $100,000 of a monthly liability of $200,000 may attract a higher base penalty in the range than the omission of $1,000 from a similar liability.

Mitigating and aggravating factors

5.9 The extent to which the additional tax will be remitted may also be influenced by other factors. The variation from the typical rate (given in the table at paragraph 5.7) might be 5 or 10 percentage points for each factor, depending on its significance.

Circumstances warranting further remission

5.10 A decrease from the rate suggested in paragraph 5.7 may be warranted where:

at the time of making the statement or omission the taxpayer or an immediate family member was uffering from serious illness or other similar problems;

the taxpayer suffered from genuine comprehension difficulties;

the taxpayer's technical knowledge and experience was poor and the matters involved were complex;

the taxpayer and his or her representatives have positively co-operated during Taxation Office enquiries; or

the taxpayer has made a voluntary disclosure (see paragraphs 5.16 to 5.20 for further details regarding voluntary disclosures).

N.B. These circumstances are illustrative and not exhaustive.

Circumstances warranting increase

5.11 An increase from the suggested rate in paragraph 5.7 may be warranted where:

deliberate steps have been taken to conceal the evasion of tax, for example, keeping a second set of accounts or falsifying records;

the taxpayer has involved third parties, for example, employees, in corruption or collusion;

there has been previous tax evasion by or on behalf of the taxpayer;

the taxpayer made a false or misleading statement unknowingly, and though he or she subsequently became aware of the mistake or omission, failed to notify the Taxation Office; or

co-operation has been less than reasonable and as a result there have been undue or excessive delays in the completion of official enquiries.

N.B. These circumstances are illustrative and not exhaustive.

Level of taxpayer co-operation

5.12 The previous paragraphs refer to the level of taxpayer co-operation as a basis for decreasing or increasing the suggested penalty figure. This is a genuine attempt to encourage a taxpayer to assist a taxation officer establish the taxpayer's correct liability to sales tax and is not intended to restrict a taxpayer's rights. The taxpayer is not required to agree with the Taxation Office's view and is entitled to put his or her case. Refusal by a taxpayer (or his or her representatives) to answer questions or provide documents will not be taken as a lack of co-operation where a genuine claim of legal professional privilege is made. In deciding the extent to which additional tax will be adjusted for the level of co-operation, the authorised officer should consider the extent to which time and resources have been affected.

5.13 Positive co-operation occurs when a taxpayer's or his or her representative's conduct has been more than reasonably co-operative. For example, a taxpayer admits to a false and misleading statement after the commencement of an audit and this results in a significant saving in time and resources in completing the audit.

5.14 Reasonable co-operation occurs when a taxpayer answers all relevant and reasonable questions truthfully and to the best of his or her ability and provides books and records in a timely manner.

5.15 Less than reasonable co-operation occurs when a taxpayer causes undue or excessive delays in the completion of official enquiries, or fails to answer relevant and reasonable questions truthfully and to the best of his or her ability.

Voluntary disclosure of a false or misleading statement

5.16 Taxpayers who voluntarily disclose the fact that they have breached the taxation law are treated more leniently than those who do not come forward voluntarily. Where a taxpayer voluntarily admits to a false or misleading statement, the additional tax will be reduced to half of the amount that would have applied had the breach been discovered through Taxation Office action (that is, half of the figure given in the table at paragraph 5.7).

5.17 In order to qualify for this concessional treatment, a voluntary disclosure must:

be in writing;

contain all relevant material facts; and

not be made as a result of Taxation Office

activities in connection with any of the Acts

administered by the Commissioner.

5.18 Where a sales tax audit has been arranged by the Taxation Office, or a taxpayer has been advised of an audit at some time in the future, disclosures made prior to the commencement of the audit may still be treated as if they were voluntary, subject to consultation with the relevant auditor or audit manager. An example would be where the taxpayer arranges for a prudential audit (by his or her own representative) within a time frame agreed by the audit manager. However, disclosures will not be treated as voluntary when the liability:

was known or ought to have been known prior to the contact by Taxation Office; or

subsequently becomes known, but is not disclosed prior to the commencement of the Taxation Office audit.

5.19 Concessional treatment only applies to matters actually disclosed. If, for example, a taxpayer makes a voluntarily disclosure in relation to a particular classification of goods and subsequent Taxation Office enquiries reveal other incorrect classifications, the concessional treatment will only apply to the matters disclosed.

5.20 Disclosures are sometimes claimed to be voluntary when they are in fact prompted by Taxation Office action. Examples of Taxation Office action include a sales tax audit which has yet to be completed and could reasonably be expected to have revealed the underpayment, or an audit of the taxpayer's liability to other taxes which reveals possible underpayments of sales tax. Whilst such disclosures do not meet the description of voluntary disclosures, they may also be accorded concessional treatment on the basis of positive co-operation.

Chapter 6: Penalty where anti-avoidance provisions apply

Effect of section 46

6.1 Section 46 imposes additional tax when the Commissioner raises an assessment of tax in consequence of the alteration of the sale value of goods under subsections 18(4), 18A(5) and 18A(6). While the relevant sale value provisions are complex, their effect in each case is that the Commissioner may increase the taxable value of goods where he believes it to be too low (and then must issue an assessment).

6.2 The amount of additional tax imposed by section 46 is an amount equal to double the difference between the sales tax payable on the altered sale value and the sales tax that was paid.

Remission of penalty

6.3 The additional tax imposed under section 46 relates to sales tax underpaid as a result of arrangements which result in the avoidance of sales tax. In each case, the Commissioner will alter the sale value in relation to a transaction where goods have been sold at less than an arm's length price or where persons have entered into arrangements for the purpose of securing a less than reasonable sale value in respect of goods.

6.4 In each instance the arrangements will have been entered into consciously or knowingly. Remission in a typical case will reflect the same level of culpability as in the case of deliberate false or misleading statements. In the absence of mitigating or aggravating circumstances, additional tax will be remitted to between 45 to 60 % of the tax not paid.

Mitigating and aggravating factors

6.5 The extent to which the additional tax will be remitted will be further influenced by other factors which either warrant a decrease or an increase in the amount imposed. The change might typically be 5 or 10 percentage points for each factor, depending on its significance.

Circumstances warranting further remission

6.6 A decrease from the suggested rate would be warranted where the taxpayer and his or her representatives have positively co-operated during Taxation Office enquiries.

Circumstances warranting increase

6.7 An increase from the suggested rate would be warranted where:

deliberate steps have been taken to conceal the sale value arrangements or the taxpayer has involved third parties, in collusion;

there has been previous tax evasion by or on behalf of the taxpayer; or

co-operation has been less than reasonable and, as a result, there have been undue or excessive delays in the completion of official enquiries.

Level of taxpayer co-operation

6.8 The comments regarding the level of taxpayer co-operation made in paragraphs 5.12 to 5.15 apply for the purposes of this Chapter.

Chapter 7: Financial hardship

7.1 These guidelines for remission have generally been concerned with examining those reasons or factors which have contributed to the taxpayer being liable for additional tax. Authorised officers may also consider the taxpayer's capacity to pay. They should assess the effect that the additional tax will have on the taxpayer, having regard to his or her net assets and potential earning or borrowing capacity.

7.2 Where the authorised officer is satisfied that the level of additional tax determined in accordance with the guidelines outlined in this Ruling would cause serious financial hardship for the taxpayer, further remission of additional tax may be warranted. The extent of any further remission will depend entirely on the facts in each case.

Chapter 8: Example calculations of remission of additional tax

The facts giving rise to additional tax

8.1 The taxpayer is registered for sales tax purposes as a wholesaler of taxable goods. He has been registered for several years. He is a sole trader and has no employees. The sales tax return for January 1990 was lodged and paid on 21st February 1990 showing net tax of $8,000; the return for February 1990 was lodged and paid on 21st March showing net tax of $8,000; and the return for March 1990 was lodged and paid on 21st April 1990, showing net tax of $9,000.

8.2 An audit is commenced on 1 August 1990. After a preliminary examination, the auditor informs the taxpayer that she has discovered understatements of $2,000 tax for January 1990 and $600 tax for March 1990.

8.3 When advised of these initial findings, the taxpayer states that the January underpayment had arisen due to a careless failure to include the last sale of the month in the return. He had discovered it the next month, but chose not to disclose the error voluntarily because cash was tight. Furthermore, he also admits to an omission of $2,000 in relation to February and explains that this underpayment represented the first step in a plan to omit sales on a regular and planned basis using a secret invoice book and entering one significant transaction per month. However, he had abandoned the plan after making only one entry. He shows the auditor a private diary documenting the plan as well as the secret invoice book.

8.4 The auditor is satisfied that the March 1990 underpayment resulted from an inadvertent arithmetic error and that it occurred despite the fact that the taxpayer had taken reasonable care. The taxpayer has not previously been penalised in respect of false or misleading statements. The audit is rapidly concluded as a result of the taxpayer's co-operation during the audit and the taxpayer lodges supplementary returns for the three months and pays the tax owing on 21 August 1990.

Calculation of additional tax

8.5 Additional tax is calculated in respect of the January underpayment as follows:

The auditor concludes that the omission arose from one transaction only and that the taxpayer had initially been careless. However, as the taxpayer had discovered the underpayment and failed to disclose it, it should be treated as if it had been made deliberately. As the omission was 20% of the total liability, the auditor believes that the additional tax should be in the middle of the range for the typical case of deliberate statements. She determines that, before aggravating or mitigating factors, the additional tax should be 50% of the underpayment;

Since the taxpayer positively co-operated during the enquiries, the auditor allows a 5% reduction in penalty. There are no aggravating factors. As a result, the additional tax to be applied is 45%. The auditor determines the subsection 45(2) additional tax to be $900.

8.6 Additional tax in respect of the February omission is calculated as follows:

The omission was deliberate, significant, and arose as the initial step in a plan to conceal sales. However, it was an isolated occurrence and the plan was abandoned at a very early stage. In the absence of other factors, additional tax would be at the top of the range of 45% to 60%. She determines that, before aggravating or mitigating factors, the additional tax to be applied would be 60% of the underpayment;

The disclosure of his plan was not strictly voluntary, because the audit had commenced. However, the auditor decides that it was unlikely that she would have easily discovered the February omission, given that the January omission had appeared careless rather than deliberate. In the circumstances, the auditor does not afford full concessional treatment, but decides that the level of positive co-operation warrants a reduction of 10% and reduces the additional tax to 50%.

The auditor calculates subsection 45(2) additional tax to be $1000.

8.7 The additional tax in respect of the March omission is calculated as follows:

The auditor is satisfied that the underpayment resulted from an inadvertent error although the taxpayer had taken reasonable care.

It was a minor error and the taxpayer has positively co-operated.

In the circumstances, the auditor remits all penalty under subsection 45(2).

8.8 In the case of each omission, the taxpayer will be liable for additional tax under subsection 29(1) in respect of the late payment of the further sales tax (9). The additional tax under section 29 is summarised as follows:

January - $200 (being 20% of $2,000 for 6 months);

February - $166.66 (being 20% of $2,000 for 5 months); and

March - $40 (being 20% of $600 for 4 months).

Chapter 9: Review of decisions relating to additional tax

Additional tax for late payment - subsection 29(1)

9.1 There are no provisions for objection against the imposition of additional tax for late payment. However, a taxpayer may ask for a review by lodging a request with the Commissioner, in writing, setting out the circumstances which led to the late payment of the tax and the basis on which remission is sought.

9.2 A decision not to remit additional tax under subsection 29(1) may be reviewed by the Federal Court under the Administrative Decisions (Judicial Review) Act 1977.

Additional tax under subsections 45(1), 45(2) and section 46

9.3 Subsection 47(1) requires the Commissioner to make assessments of additional tax imposed under subsections 45(1), 45(2) and section 46. Objections may be lodged against these assessments by virtue of subsection 40(1). The requirements of the objection and appeal provisions are currently set out in Part VII of Act No. 1 (10). (N.B. The Administrative Appeals Tribunal will only review a decision relating to the remission of additional tax under Part VIII of Act No. 1 if:

the amount of tax to be reviewed is greater than $20;

and the additional tax exceeds 20% per annum of the tax properly payable.)

Chapter 10: Previous advice affected by this ruling

10.1 This Ruling will affect previously issued documents and decisions in the following manner:

Sales tax rulings ST 2123, ST 2130, ST 2254 no longer apply;

Paragraphs 1391 to 1392 in Australian Sales Tax A.G.P.S. Canberra 1984 no longer apply;

The documents on the Freedom of Information Index listed at Appendix A are superseded;

and

All private rulings previously issued are amended to the extent that they are inconsistent with this Ruling.

COMMISSIONER OF TAXATION
23 January 1992

References

ATO references:
NO Unknown

Date of effect:
Immediate

Subject References:
- additional tax
alteration of sale value
basis for remission of additional tax
failure or refusal to lodge returns
failure to pay tax when due
false or misleading statements

Legislative References:
- STAA (No. 1) 1930 Sections 18,
18A,
29,
45,
46, &
47
STAA (Nos 2 - 9) 1930 Section 12
STAA (No. 10) 1985 Section 12
STAA (No. 11) 1985 Section 16