In times marked by soaring interest rates, a cost-of-living crisis, and the aftermath of a pandemic, many individuals and businesses find themselves grappling with the challenges of an escalating tax bill compounded by a relentless General Interest Charge (GIC). If you’re feeling overwhelmed by a tax burden that seems to grow daily, Waterhouse Lawyers is here to provide clarity and guidance on the complexities of GIC remission.

Understanding GIC:

GIC is imposed when a tax amount remains unpaid beyond its due date or when there’s an underpayment following an assessment amendment. Its main objectives are to encourage timely payments, eliminate unfair advantages for late payers, and compensate the Australian Government for the repercussions of delayed payments. Currently, GIC stands at an annual rate of 11.38%.

Can GIC be Remitted?

Certainly, GIC remission is a possibility, and our team of tax experts is poised to assist you through the process. Initiating this request lies with the clients, who typically bear the responsibility of demonstrating the justification for remission.

Grounds for GIC Remission:

Circumstances the Commissioner may consider for remission include:

• Significant delays in receiving third-party information.
• Serious health issues affecting key personnel or their family members.
• Natural disasters impacting access to business records.
• Ongoing pre-lodgement review or audit of a related entity.
• Isolated late payment events with a good compliance history.

However, four main categories for it to fall under:

1. Not Your Fault:
   • Circumstances causing delay are beyond your control.
   • You’ve taken reasonable steps to address and mitigate the effects.
2. Fair and Reasonable:
   • Your actions contributed to the delay.
   • You’ve taken reasonable steps to address the situation.
   • Considering the circumstances, remission is fair and reasonable.
3. Special Circumstances:
   • Unique circumstances in your case.
   • Remission would be fair and reasonable.
4. Otherwise Appropriate:
   • A broad discretion exercised by senior tax officers.

The Commissioner also considers:

• The taxpayer’s previous compliance history.
• Payment of outstanding amounts at the time of requesting remission.
• Actions taken to mitigate circumstances leading to the outstanding payment.
• Any other contributing circumstances provided by the taxpayer.

When and How to Apply:

Even if GIC has been paid, it should not impact the Commissioner’s decision to remit and issue a refund. Our recommended practice is to settle the primary debt first before applying for remission. This approach minimizes accruing interest as there is no unpaid debt left.

If the GIC is less than $50,000 we can call the ATO and verbally request remission by explaining your situation. However, if the debt is larger than $50,000 a written request is required.

Navigating GIC Remission with Expert Guidance:

With our expert guidance, you can alleviate the burden of accumulating interest charges. At Waterhouse Lawyers, our dedicated team is committed to assisting you at every step of the process. Don’t let GIC overwhelm you—allow us to help you regain control of your financial landscape. Contact us today for expert tax advice at 02 9252 8746.