Taxation Administration Act 1953

The Commissioner may retain an amount that he or she otherwise would have to refund to an entity under section 8AAZLF, if the entity has given the Commissioner a notification that affects or may affect the amount that the Commissioner refunds to the entity, and:

it would be reasonable to require verification of information (the notified information) that:

is contained in the notification; and

relates to the amount that the Commissioner would have to refund; or

the entity has requested the Commissioner to retain the amount for verification of the notified information, and the request has not been withdrawn.

In deciding whether to retain the amount under this section, the Commissioner must, as far as the information available to the Commissioner at the time of making the decision reasonably allows, have regard to the following:

the likely accuracy of the notified information;

the likelihood that the notified information was affected by:

fraud or evasion; or

intentional disregard of a taxation law; or

recklessness as to the operation of a taxation law;

the impact of retaining the amount on the entity’s financial position;

whether retaining the amount is necessary for the protection of the revenue, including the likelihood that the Commissioner could recover any of the amount if the notified information were found to be incorrect after the amount had been refunded;

any complexity that would be involved in verifying the notified information;

the time for which the Commissioner has already retained the amount;

what the Commissioner has already done to verify the notified information;

whether the Commissioner has enough information to make an assessment relating to the amount (including information obtained from making further requests for information);

the extent to which the notified information is consistent with information that the entity previously provided;

any other relevant matter.

The Commissioner must inform the entity (by serving a document on the entity or by other means) that he or she has retained the amount under this section. He or she must do so by the end of:

in a case to which paragraph 8AAZLF(1)(a) applies:

if the whole or part of the RBA surplus of the entity arises because of a credit that arises directly under the BAS provisions (as defined in subsection 995‑1(1) of the Income Tax Assessment Act 1997)—the 16th day to occur after the RBA interest day (within the meaning of section 12AF of the Taxation (Interest on Overpayments and Early Payments) Act 1983) for the RBA surplus; or

otherwise—the RBA interest day for the RBA surplus of the entity; or

in any other case—the 30th day after the entity gives to the Commissioner the notification mentioned in subsection (1) of this section.

For the purposes of subparagraph (3)(a)(i), the whole or part of the RBA surplus is taken to arise because of a credit if the whole or part of the RBA surplus would not arise but for the credit being allocated to the RBA.

In informing the entity that the amount is retained, the Commissioner may request information that he or she is aware will be required for the purposes of verifying the notified information.

The Commissioner may retain the amount under this section only until:

if paragraph (1)(a) applies—it would no longer be reasonable to require verification of the information; or

if the Commissioner fails to inform the entity, in accordance with subsection (3), that he or she has retained the amount under this section—the end of the day after the time by which, under that subsection, the Commissioner is required to inform the entity; or

in any case—there is a change to how much the Commissioner is required to refund, as a result of:

the Commissioner amending an assessment relating to the amount; or

the Commissioner making or amending an assessment, under Division 105 in Schedule 1, relating to the amount;

The entity may object to a decision of the Commissioner to retain the amount under this section in the manner set out in Part IVC, if the entity is dissatisfied with the decision.

Interest on the amount may be payable under the Taxation (Interest on Overpayments and Early Payments) Act 1983.

Before the end of the 7 days after the start of the period during which, under section 14ZW, the entity may object to the decision, the Commissioner must notify the entity, in writing, that the entity may object to the decision.

For the start of the period for objecting to the decision, see paragraph 14ZW(1)(aad) and subsection 14ZW(4).

A failure to comply with subsection (7) does not affect the validity of the decision.