GIC remission lawyers

GIC remission means the ATO cancelling some or all of the general interest charge (GIC) on a tax debt. The Commissioner can remit GIC under section 8AAG of the Taxation Administration Act 1953 (TAA). Where the interest arose because a debt was paid late, the ATO must be satisfied that one of the three grounds in that section applies.

GIC runs on overdue tax, and shortfall interest charge (SIC) runs on extra tax from an amended assessment. Both compound daily, and neither is deductible if incurred in an income year starting on or after 1 July 2025. We prepare remission requests that answer the legal tests directly, including where the ATO has already refused once.

When can the ATO remit GIC?

The Commissioner may remit all or part of the GIC a person owes (TAA s 8AAG(1)). Where the interest arose because an amount was paid late, remission is available only if the ATO is satisfied of one of the following (s 8AAG(2)).

1. Circumstances outside your control. The circumstances that contributed to the delay weren't caused, directly or indirectly, by anything you did or failed to do, and you took reasonable action to mitigate them or their effects (s 8AAG(3)).
2. Circumstances you caused, but remission is fair and reasonable. The circumstances behind the delay were caused, directly or indirectly, by you, but you took reasonable action to mitigate them or their effects, and having regard to the nature of those circumstances it would be fair and reasonable to remit (s 8AAG(4)).
3. Special circumstances, or otherwise appropriate. There are special circumstances making remission fair and reasonable, or it is otherwise appropriate to remit (s 8AAG(5)).

The GIC rate is the base interest rate (the monthly average yield of 90-day Bank Accepted Bills, published by the Reserve Bank) plus 7 percentage points, set each quarter (s 8AAD). See how the general interest charge works.

What does the ATO look for in a GIC remission request?

The ATO's approach is in Practice Statement PS LA 2011/12, last updated in June 2026 and flagged by the ATO as under review.

• The onus is generally on you. A request can be made at any time, but you must give the ATO enough information to decide it (para 8).
• Cause and effect. For circumstances outside your control, show how the event affected your ability to pay and that you would otherwise have paid on time (para 14). The ATO's examples include natural disasters, the unforeseen collapse of a major debtor, sudden illness of key people in a small business, and family violence (para 15).
• What usually isn't enough. General adverse business or economic conditions, giving customers extended credit, or using available funds to buy assets or pay other creditors (paras 16–17).
• Mitigation. What you did, or could have done, to lessen the problem, such as realising assets or seeking finance (para 18).
• Fairness to the community. Would ordinary members of the community who pay on time see remission as fair (paras 21–22)? A good payment record with one isolated late payment is the ATO's own example of special circumstances (para 27).
• Special cases. Specific ATO policies apply to 50:50 arrangements for disputed debts, bankruptcy and liquidation (where the ATO generally won't remit), superannuation guarantee charge and deceased estates (paras 35–53).

A strong request answers that guidance point by point, with documents. See how to ask the ATO to remit interest.

How is shortfall interest charge (SIC) remission different?

GIC and SIC have different rates, remission powers and review rights.

	General interest charge (GIC)	Shortfall interest charge (SIC)
When it applies	An amount is unpaid after its due date	The ATO amends an assessment and more tax is payable
Period	From the due date until paid	From the original due date to the day before the amended assessment notice (Sch 1 s 280-100)
Rate	Base interest rate plus 7 percentage points (s 8AAD)	Base interest rate plus 3 percentage points (Sch 1 s 280-105(2))
Power to remit	s 8AAG, three grounds for late payment	Sch 1 s 280-160, where fair and reasonable
If refused	No objection right	Objection if the SIC not remitted is more than 20% of the additional tax (Sch 1 s 280-170)

SIC is due 21 days after the ATO gives notice of it, and GIC then runs on anything unpaid (Income Tax Assessment Act 1997 (ITAA 1997) ss 5-10 and 5-15).

In deciding whether to remit SIC, the Commissioner must have regard to two principles: remission shouldn't happen just because your benefit from using the money was less than the SIC, and it should happen where the circumstances justify the Commonwealth bearing some or all of the cost of the delay (Sch 1 s 280-160(2)). The ATO's SIC practice statement, PS LA 2006/8, contemplates remitting SIC down to the base rate in several situations, including an unreasonable delay in starting an audit, and the time an audit runs past its expected completion date if its scope stays much the same. The overrun ground doesn't apply where the taxpayer unreasonably caused the delay or obstructed the audit (paras 27–30). See shortfall interest charge and how to get it remitted.

Why remission matters more now that interest isn't deductible

The Treasury Laws Amendment (Tax Incentives and Integrity) Act 2025 added a rule that you can't deduct GIC or SIC (ITAA 1997 s 26-5(1A)), applying to assessments for income years starting on or after 1 July 2025 (Sch 2 item 4). For most taxpayers, that means interest incurred from the 2025–26 income year, whichever year the debt relates to.

For example, suppose a company paying tax at 30% incurs $10,000 of GIC. Under the old rules, a deduction could have brought the after-tax cost down to about $7,000. Now the full $10,000 is a cost, so if that interest is remitted, the saving is generally the full $10,000, with no tax on the remitted amount (ITAA 1997 s 20-20(3)).

Interest incurred in earlier income years generally remains deductible, but if it is remitted, the remitted amount is generally assessable in the year of remission (ITAA 1997 ss 20-20(3) and 20-25(2A); PS LA 2011/12 paras 73–75). Our guide to ATO interest no longer being tax deductible covers when interest is incurred, late returns, substituted accounting periods and the tax treatment of remitted interest.

Does interest keep running on a payment plan?

Generally, yes. A payment arrangement doesn't change the date the debt was due, so GIC keeps running on the unpaid balance unless the ATO remits it (TAA Sch 1 s 255-15(2) and note). We usually raise remission while the plan is being negotiated. See does the ATO charge interest on payment plans?

If the debt has also led to a director penalty notice, deal with that first. Its 21-day deadline runs from when the ATO posts or leaves the notice, not when you read it (TAA Sch 1 s 269-25(4)).

Penalties are a separate request

Administrative penalties, such as failure to lodge on time and shortfall penalties, are remitted under a different power (TAA Sch 1 s 298-20), with an objection right where the penalty left after a refusal is more than 2 penalty units. That objection is generally due within 60 days after you are served with notice of the decision (TAA s 14ZW(1)(c)). Where both apply, we usually deal with them together. See ATO penalties and penalty remission.

What if the ATO refuses to remit interest?

For SIC, you can object under Part IVC of the TAA if the amount not remitted is more than 20% of the additional tax (Sch 1 s 280-170). The objection generally has to be lodged within 60 days after you are served with notice of the decision (TAA s 14ZW(1)(c)), and a disallowed objection can generally go to the Administrative Review Tribunal or the Federal Court.

For GIC, the TAA gives no right to object. A further request can be made with better evidence, and a s 8AAG decision may be challenged by judicial review in the Federal Court under the Administrative Decisions (Judicial Review) Act 1977, as the taxpayer did, unsuccessfully, in Elias v Commissioner of Taxation [2002] FCA 1132. That application generally has to be lodged within 28 days after you are given the written decision, or after the reasons are given if they come separately, although the Court can allow more time (ADJR Act s 11(1)(c) and (3)). Judicial review asks whether the decision was lawfully made, not whether it was right. See what to do if interest remission is refused.

How we help

• Assess first. We review the debt, the timeline and the reasons for late payment, and tell you which ground, if any, is realistic.
• Prepare the request. We draft it against s 8AAG (or s 280-160 for SIC) and the ATO's practice statements, with the supporting evidence.
• Challenge refusals. We object to SIC decisions where the right exists, and advise on options when GIC remission is refused.
• Work with accountants. We prepare remission requests for accountants' clients and keep the accountant in the loop. See how we work with accountants.

Next step

Send us the ATO statement of account showing the interest (or the amended assessment and SIC notice), with a short note on why the debt fell behind and what you did about it. If the ATO has already refused a request, include its letter, and if you are on a payment plan, its terms. We'll tell you which ground is realistic and whether a request is worth making.