General Interest Charge Remission: When the ATO Will Actually Remit It and How to Ask

You settle a tax dispute with the ATO. The tax itself may be manageable at first glance.

Then you see the General Interest Charge (GIC).

It’s compounding daily at a punishing rate. Over years of disputing an assessment, GIC can dwarf the original tax debt. We’ve seen GIC bills exceed the underlying tax by 50% or more.

The good news? The ATO can remit GIC. The bad news? They won’t do it automatically, and they won’t do it just because you ask nicely.

This article walks you through when the ATO will actually consider remission, what circumstances matter, and how to frame your request so it lands.

What Is General Interest Charge and Why Does It Exist?

GIC is the interest the ATO charges on unpaid tax debts. It starts accruing from the day after your tax was originally due and compounds daily.

The rate adjusts quarterly and sits well above commercial rates. As of writing, it’s around 10% per annum. But because it compounds daily, the effective rate climbs higher.

The ATO’s justification? You’ve had use of money that should have been theirs. GIC compensates them for the time value of money and encourages prompt payment.

Fair enough in principle.

But what happens when you genuinely dispute the underlying tax? You object. The ATO takes months, sometimes years, to decide. You might go to the Federal Court or Administrative Appeals Tribunal. The process drags on.

Meanwhile, GIC keeps ticking.

You might win your dispute entirely, reducing the tax to zero. The GIC disappears with it.

But if you partially win, or lose, you’re left with a tax debt plus years of compounded interest. Through no fault of your own, the dispute took time. The GIC bill reflects that delay, even when the delay wasn’t yours.

That’s where remission comes in.

Can the ATO Actually Remit GIC?

Yes. The ATO has broad discretion to remit GIC under administrative guidelines.

This isn’t a statutory right you can demand. It’s discretionary. The ATO publishes guidance in Practice Statement Law Administration PS LA 2011/12, which sets out when they’ll consider remission.

The key word there is “consider.” They don’t have to remit just because you ask.

But if you present the right circumstances with proper evidence, they often will. We’ve secured full remission for clients in cases involving ATO delays, and partial remission where the facts were mixed.

The ATO looks at whether charging GIC in full would be unfair given the specific circumstances of your case. They balance their interest in collecting what’s owed against fairness and reasonableness.

You need to give them a reason to exercise that discretion in your favour.

When Will the ATO Consider Remitting GIC?

The ATO considers remission in three broad categories:

1. ATO delays or errors

If the ATO’s own administrative delay contributed to the period over which GIC accrued, they’ll often remit for that period.

Classic example: You lodge an objection. The ATO sits on it for 18 months before issuing a decision. During that time, GIC kept compounding on the disputed amount. You had no control over the delay. The ATO will typically remit GIC for the period of their delay.

The same applies if the ATO made an error that caused the original assessment or delayed resolution. If they issued an incorrect assessment, took months to correct it, and GIC accrued in the meantime, remission is on the table.

2. Circumstances beyond your control

Serious illness, natural disaster, or other events that genuinely prevented you from paying on time or resolving the dispute faster.

This category is narrower than it sounds. “I was busy” doesn’t cut it. “I was hospitalised for six months and couldn’t manage my affairs” might.

The key test is whether a reasonable person in your circumstances could have acted differently. If not, the ATO may remit GIC for the affected period.

3. Financial hardship

If paying the full GIC amount would cause you serious financial hardship, meaning you genuinely can’t pay without severe consequences, the ATO may partially remit.

Hardship remission isn’t automatic. You’ll need to demonstrate your financial position with detailed evidence: profit and loss statements, cash flow projections, asset and liability schedules.

The ATO will want to see that you’ve exhausted other options before granting hardship remission. They’re not looking to wipe out GIC just because it’s inconvenient. They need to see that paying it would push you into insolvency or force you to sell essential assets.

What Won’t Get You GIC Remission

Understanding what doesn’t work saves you time and credibility.

“The GIC is too high”

The ATO knows GIC is high. That’s the point. Complaining about the rate or total amount won’t move them. You need to demonstrate unfairness in the circumstances, not just that you dislike the bill.

“I was disputing in good faith”

Good faith disputes are expected. The fact that you genuinely believed your tax position doesn’t, by itself, justify remission. Thousands of taxpayers dispute assessments every year. Most pay GIC on any amount that remains owing after the dispute resolves.

You need something more: ATO delay, circumstances beyond your control, or genuine hardship.

“I didn’t understand the law”

Ignorance of the law isn’t a basis for remission unless your lack of understanding arose from unclear ATO guidance or conflicting advice from the ATO itself.

“I couldn’t afford to pay”

Cash flow difficulties during the dispute don’t automatically justify remission. Lots of businesses struggle to pay disputed tax while the matter is unresolved. That’s not enough on its own.

If your cash flow problems were caused by ATO delays or if paying now would create genuine hardship, frame your request around those categories. Otherwise, the ATO will expect you to pay GIC on the outstanding amount.

How to Ask for GIC Remission: The Practical Process

Remission requests are made in writing to the ATO. You’ll need to lodge a formal application, set out your grounds clearly, and attach supporting evidence.

Here’s the process step-by-step:

1. Wait until your dispute is resolved

Don’t apply for remission until the underlying tax liability is settled. The ATO won’t consider remission while the primary tax is still in dispute.

Once your objection is decided, your AAT matter settles, or the court hands down judgment, that’s when you apply.

2. Identify your remission grounds

Which category applies to your situation? ATO delay? Circumstances beyond your control? Financial hardship?

Be specific. “The ATO took 14 months to decide my objection” is a clear ground. “This whole process took too long” is vague and won’t get you anywhere.

3. Gather your evidence

For ATO delay: Timeline showing when you lodged your objection, when the ATO acknowledged it, when they issued their decision. Correspondence showing requests for updates. Any ATO acknowledgments of delay.

For circumstances beyond control: Medical records, statutory declarations, evidence of the event that prevented you from acting. Be prepared to explain why that event meant you couldn’t resolve the matter sooner.

For financial hardship: Full financial statements. Profit and loss. Cash flow projections showing you can’t meet the GIC liability without serious consequences. Asset and liability schedules. Loan documents if relevant.

4. Write a clear, structured submission

Set out the facts chronologically. Explain what happened, when, and why it justifies remission.

Don’t be emotional. Don’t complain about the ATO. Be factual, direct, and professional.

Frame your request in terms of the ATO’s own guidelines. Show them that your situation fits within the categories they’ve published.

5. Quantify the remission you’re seeking

Be specific. Are you asking for full remission of all GIC? Partial remission for the period of ATO delay only?

If you’re asking for partial remission, break down which period you believe should be remitted and why.

6. Lodge your request

Send your submission to the ATO in writing. Keep copies of everything.

The ATO will review your request and issue a decision. This can take weeks or months depending on complexity. Chase them if you don’t hear back within a reasonable time.

Real-World Example: ATO Delay Remission

We acted for a company disputing a transfer pricing adjustment. The amended assessment issued in June 2019. We lodged an objection in August 2019.

The ATO acknowledged receipt and said they’d review it.

Silence. Months passed. We followed up repeatedly. The ATO finally issued an objection decision in April 2021, 21 months later.

The objection was partially allowed. The company still owed tax, but less than originally assessed. By the time the decision came through, GIC had compounded for nearly two years.

We immediately applied for GIC remission for the period of ATO delay. Our submission included:

• Timeline showing objection lodged in August 2019
• Correspondence trail showing our repeated follow-ups
• ATO’s own acknowledgment that the matter “took longer than expected to finalise”
• Calculation showing the GIC that accrued during the delay period

The ATO remitted GIC for the 21-month delay period in full.

The company still paid GIC for the two months between the original assessment and lodging the objection. That was fair, the company had control over that period.

But the 21-month delay wasn’t their fault. The remission saved the company over $180,000.

Common Mistakes That Kill Remission Requests

We’ve reviewed dozens of failed remission requests from taxpayers who went to the ATO on their own. These mistakes come up repeatedly:

Applying too early

You lodge your remission request while your objection is still pending. The ATO rejects it outright because the underlying liability isn’t settled. You’ve wasted time and given the ATO an easy reason to say no.

Wait until your dispute is resolved.

No evidence

You claim ATO delay but provide no timeline, no correspondence, no proof. You claim hardship but attach no financial statements.

The ATO won’t take your word for it. Evidence is non-negotiable.

Vague or emotional submissions

“This has been so stressful and the ATO has been unreasonable and the GIC is unfair.”

None of that matters to the officer reviewing your request. They need facts, dates, and a clear basis under the ATO’s published guidelines.

Asking for everything without justification

You ask for 100% remission of all GIC without explaining why the entire amount should be wiped.

If only part of the delay was the ATO’s fault, ask for remission of that part. Be realistic. The ATO is more likely to grant a reasonable, well-targeted request than a blanket demand.

Paying first, asking later

You pay the full debt including GIC, then apply for remission.

The ATO is far less motivated to remit once they’ve already received payment. Apply before you pay, or negotiate remission as part of a payment plan.

Does a Payment Plan Stop GIC?

No. GIC continues to accrue on the outstanding balance until you’ve paid in full.

A payment plan with the ATO is an agreement about how you’ll pay the debt over time. It doesn’t freeze interest.

This is a nasty surprise for many taxpayers. You negotiate a payment plan, thinking you’ve resolved the issue. Months later, you discover the debt has grown because GIC kept compounding.

If you’re entering a payment plan, address GIC remission upfront. Apply for remission before finalising the plan. If the ATO agrees to remit, your payment plan is based on the reduced amount.

If they won’t remit, factor ongoing GIC into your cash flow planning. The debt will grow until it’s paid off.

What If the ATO Says No?

The ATO rejects your remission request. Now what?

First, find out why. Ask for a detailed explanation of their decision. Sometimes the rejection is based on missing information or a misunderstanding of your circumstances.

If that’s the case, address the gap and reapply. Provide the missing evidence. Clarify the misunderstood facts.

If the ATO still says no, you can escalate internally. Ask for the decision to be reviewed by a senior officer or team leader. Frame your escalation around the specific reasons for rejection and why you believe they’re incorrect.

If internal escalation doesn’t work, consider complaining to the Inspector-General of Taxation and Taxation Ombudsman (IGTO). The IGTO investigates complaints about ATO administration and can recommend the ATO reconsider.

Remission decisions are administrative, not judicial. You generally can’t appeal to the AAT or Federal Court. But persistent, well-evidenced requests often succeed on reconsideration, especially when the facts clearly support remission.

When to Get Help

If your GIC liability is substantial, say, more than $50,000, get professional help with your remission request.

The difference between a poorly drafted submission and a properly structured one can be hundreds of thousands of dollars.

We’ve seen taxpayers go to the ATO on their own, get rejected, then come to us. By that point, they’ve burned credibility and made the ATO’s position harder to shift.

If ATO delay is involved, if the facts are complex, or if you’re relying on financial hardship, you want someone who knows how the ATO assesses these requests and what evidence they need to see.

This isn’t about hiring a lawyer to write fancy letters. It’s about structuring your case in a way that aligns with the ATO’s internal guidelines and gives them a clear path to saying yes.

Final Thoughts

GIC remission is one of the most underutilised tools in resolving tax disputes. Taxpayers either don’t know it exists or assume the ATO will never agree.

The reality is more nuanced. The ATO remits GIC regularly, when the circumstances justify it and when the request is properly made.

If you’ve spent years disputing an assessment and the ATO caused delay, you have a strong case.

If you faced circumstances genuinely beyond your control, remission is possible.

If paying the full GIC would push you into serious financial hardship, partial remission might be on the table.

But you need to ask. And you need to ask properly.

Don’t pay the GIC bill and hope for the best. Don’t lodge a vague request and wonder why it got rejected.

Understand the grounds. Gather your evidence. Make a clear, structured case. And if the stakes are high, get someone who’s done this before to help you frame it.

The ATO has discretion to remit. Your job is to give them a reason to exercise it in your favour.