Who gets a GIC remission?: ATO releases case studies to clarify relief provisions

“These examples are a guide to some of the more common circumstances we see and the likelihood that we may remit part or all of your interest.”

The ATO flagged that it would “likely accept” GIC remission requests involving natural disaster impacts, theft and property damage, domestic violence, unforeseen collapse of a major debtor, bereavement and ill health.

Remission would be more likely for taxpayers with a good compliance history, and for those who had taken steps to reach out to the ATO, and sought to pay as soon as feasible within their circumstances.

The Tax Office said it would likely reject requests stemming from broader economic downturns, general business risks such as a late payment by a creditor, businesses that used money to expand their operations instead of paying overdue taxes, or being on holiday when lodgments were due.

The additional clarity has come after tax agents raised concerns with the ATO’s approach to taxpayer relief provisions, including GIC remission and lodgement deferrals. The GIC is applied to tax debts that have remained unpaid after their due date.

GIC impositions soared in the 2025 financial year, and Tax Ombudsman Ruth Owen received over 134 complaints regarding the ATO’s enforcement approach.

“We’ve heard complaints about a general lack of consistency and transparency in the ATO’s approach to interest charges. Tax professionals and taxpayers have told us that it seems to be a matter of potluck as to who gets their interest reduced or remitted and who has to pay in full,” Owen said.

As previously reported by Accountants Daily, tax agent Deborah Ianchello’s lodgment deferral request on behalf of a hospitalised client going through divorce proceedings was knocked back by an ATO phone agent.

Later, the ATO’s complaints team told Ianchello that this was a poor outcome for the Tax Office, and the extension should have been granted in the first place.

As a preliminary step to address concerns surrounding their taxpayer relief provisions, the ATO said it would shift penalty remission requests online to a dedicated team, from Thursday (22 January).

Cases where the ATO said it would likely accept GIC remission requests included:

• Where an individual (or their tax or BAS agent) has been impacted by a natural disaster (such as fire, flood or drought).
• Where industrial action has impacted an individual or their tax or BAS agent.
• Unforeseen collapse of a major debtor.
• Sudden ill health of an individual, sole trader or key personnel in a small business.
• Sudden ill health of an individual's tax or BAS agent, where it was not practical to make alternative arrangements to meet their obligations.
• Theft of, or damage to, property critical to business operations.
• Where an individual has experienced or is currently experiencing financial abuse, coercive control, family and domestic violence or other circumstances that contribute to experiencing vulnerability that impact their ability to meet their tax obligations.
• Bereavement of a family member.

Requests likely to be declined:

• Adverse business conditions that impact cash flow.
• General economic downturn.
• Fluctuations in currency or exchange rates.
• General business risks, such as late payment of invoices by a creditor.
• Using monies to expand your business instead of paying overdue taxes.
• Missing a lodgment or payment date because an individual did not allow their tax or BAS agent sufficient time to meet deadlines.
• Being on holiday when lodgment or payment is due.