Taxation Administration Act 1999

The amount of penalty tax payable in relation to a tax default is 25% of the amount of tax unpaid, subject to this division.

The commissioner may increase the amount of penalty tax payable in relation to a tax default to 50% of the amount of tax unpaid if the commissioner is satisfied that the tax default—

was caused wholly or partly by the taxpayer (or a person acting on behalf of the taxpayer)—

delaying the payment of tax; or

delaying the provision of information required for the assessment of tax; or

providing information required under a tax law that is incorrect, incomplete or misleading; or

is the taxpayer’s second or subsequent tax default in relation to a tax liability, or in relation to a similar or related tax liability.

Subsection (2) applies to a tax default in the same way whether the tax default happened before or after the subsection commenced.

The commissioner may increase the amount of penalty tax payable in relation to a tax default to 75% of the amount of tax unpaid if the commissioner is satisfied that the tax default was caused wholly or partly by the intentional disregard by the taxpayer (or a person acting on behalf of the taxpayer) of a tax law.

No penalty tax is payable in relation to a tax default if the commissioner is satisfied that—

the taxpayer (or a person acting on behalf of the taxpayer) took reasonable care to comply with the tax law; or

the tax default happened solely because of circumstances beyond the taxpayer’s control (or if a person acted on behalf of the taxpayer, because of circumstances beyond either the person’s or the taxpayer’s control) but not amounting to financial incapacity.

The commissioner’s decision to impose penalty tax is an internally reviewable decision (see s 107, def internally reviewable decision), and the commissioner must give an internal review notice to the taxpayer (see s 107B).