Taxation Administration Act 1996

The amount of the penalty tax payable in respect of a tax default is—

in the case of a deliberate tax default—75 per cent of the amount of tax unpaid; or

in any other case—25 per cent of the amount of tax unpaid.

The penalty tax payable in respect of a tax default is subject to adjustment according to the conduct of the taxpayer as follows:

if the taxpayer made a sufficient disclosure of the tax default while not subject to a tax audit—the penalty tax is to be reduced by 80 per cent;

if the taxpayer made a sufficient disclosure of the tax default while subject to a tax audit—the penalty tax is to be reduced by 20 per cent;

if the taxpayer engaged in obstructive conduct while subject to a tax audit—the penalty tax may be increased by the Commissioner by 20 per cent.

For the purposes of subsection (2)—

a taxpayer becomes subject to a tax audit in relation to a tax default under a taxation law when the Commissioner serves written notice on the taxpayer advising that the Commissioner is to investigate the tax liability of the taxpayer under that taxation law, and the taxpayer remains subject to the tax audit for 28 days after service of the notice on the taxpayer or such longer period as the Commissioner may specify by written notice;

a taxpayer makes a sufficient disclosure of a tax default if disclosure is made in writing and the nature and amount of the tax default are as a result of the disclosure apparent to or readily ascertainable by the

a taxpayer does not make a sufficient disclosure of a tax default if the tax default has been or is about to be discovered by the

if a taxpayer has previously been subject to a tax audit in relation to a taxation law, the taxpayer may only make a sufficient disclosure of a tax default under that taxation law that has occurred after the taxpayer ceased to be subject to the previous tax audit;

a taxpayer engages in obstructive conduct if the taxpayer or a person acting on behalf of the taxpayer—

refuses or fails (without reasonable excuse) to comply with a requirement made by the Commissioner under

hinders or obstructs an authorised officer exercising powers under that Division for that purpose; or

deliberately damages or destroys records required to be kept under the taxation law to which the tax audit relates.

Nothing in this section requires that notice be given of an investigation or in any way restricts the exercise of a power of investigation under this Act.