Taxation Determination TD 92/150







[Note: This is a consolidated version of this document. Refer to the Tax Office Legal Database (http://law.ato.gov.au) to check its currency and to view the details of all changes.] | 1. Yes. Under Division 3 of Part IIB of the Taxation Administration Act 1953 (TAA), the Commissioner may apply an amount of interest payable under that Act to a person in total or partial discharge of a Commonwealth tax liability of the person. The decisions in Re Mendonca; ex parte FC of T (1969) 15 FLR 256; at 259; and in Clyne v. DC of T (1981) 150 CLR 1 at 9; 81 ATC 4429 at 4432; (1981) 12 ATR 173 at 177, make it clear that a 'liability' to tax exists once an assessment has been served, notwithstanding that the tax is not yet due and payable. | 2. Accordingly, the Commissioner has authority under Division 3 of Part IIB of the TAA to apply an amount of interest payable to a taxpayer under that Act against an amount of Commonwealth tax which has been assessed to the taxpayer, but which is not yet due and payable. | Example: A has been issued with an income tax assessment on 7 May 1992. The tax assessed of $10,000 is due and payable on 5 June 1992. On 14 May 1992, A becomes entitled to interest of $5,000 under the Taxation (Interest on Overpayments and Early Payments) Act 1983. On 15 May 1992, the Commissioner applies the amount of $5,000 due to A against A's tax liability of $10,000. As from that date, A only has a tax liability of $5,000. | Commissioner of Taxation 27/08/92


Legislative references: TIOEP Act 1983 TAA 1953 Pt IIB Div 3
Case references: Re Mendonca; ex parte FC of T (1969) 15 FLR 256
Subject references: interest on overpayments; application of interest on overpayments against tax liability