Interest and penalty tax play an integral role in taxation and grant administration. Interest is applied as a means of encouraging taxpayers to meet their obligations on time, to offset the opportunity cost to government of not having the use of the principal tax sum for the period that it remains unpaid, and to provide equity to all taxpayers. Penalty tax is applied to ensure timely payments and compliance with state tax and grant legislation.

The interest rate cited under the Taxation Administration Act 1996 (the "TAA") comprises:

  • market rate; and in respect of defaults
  • an additional 8.00% per annum.

and is applicable to those taxes subject to the TAA.

The amount of penalty tax cited under the Taxation Administration Act 1996 (the "TAA") is:

  • 75% of the amount of tax unpaid where the tax default was deliberate; or
  • 25% of the amount of tax unpaid in any other case.

and is applicable to those taxes subject to the TAA.

Interest and penalty tax may be adjusted or remitted in certain circumstances. (See Revenue Ruling TAA001 for further details.)

The First Home and Construction Grants Act 2000 applies interest and penalty to matters on non-compliance.

Interest rates for refunds and defaults

Contact us