ATO’s general remission power: draft LI 2023/D10 

April 27, 2023

The ATO has issued a draft legislative instrument that seeks to codify its long-standing practice of remitting interest or penalties to certain classes of entities, including where the charge or penalty has not yet become due and payable: Draft Taxation Administration (Remedial Power – Remission of Charges and Penalties) Determination 2023 (LI 2023/D10).

When final, the determination will apply to the General Interest Charge, Shortfall Interest Charge and the Failure to Lodge penalty that would otherwise be imposed on an individual or group:

  • that the Commissioner is satisfied has been affected by a natural disaster or other serious and external adverse event
  • with a liability to a charge or penalty the Commissioner considers is a minor amount (eg where the cost of collection is greater than the amount to be collected) or
  • where the Commissioner considers is appropriate to remit to encourage ongoing compliance with taxation laws (eg the remission of a charge or penalty for a taxpayers’ first failure to lodge or pay on time).