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This Practice Statement deals with the circumstances where you are entitled to be paid an amount of interest by us. In the majority of cases, such interest is payable under the Taxation (Interest on Overpayments and Early Payments) Act 1983 (T(IOEP)A).

Circumstances where interest is payable by us include: • early payments of certain tax liabilities (interest on early payment (IEP)) • particular overpayments of taxes (interest on overpayments (IOP)) • delayed refunds of activity statement amount credits that have been allocated to a running balance account (RBA) (delayed refund interest (DRI)) • certain amounts of tax on no-tax file number (no-TFN) contributions income of superannuation providers.

The entitlement to IEP, overpayments, DRI and certain amounts of no-TFN contributions tax is set out in the T(IOEP)A.

Interest payable by us under the T(IOEP)A is: • assessable income when it is received (applied, credited or refunded) • payable at the base interest rate (within the meaning of section 8AAD of the Taxation Administration Act 1953 (TAA)) • calculated as simple interest, not compound interest [1] • calculated to the nearest cent (0.5 cent rounded up to nearest cent) and amounts less than 50c are not payable. [2]

Apart from interest that is payable under the T(IOEP)A, interest is also payable under the following Acts [3] : • Parts 2 and 5 of the Superannuation (Government Co-contribution for Low Income Earners) Act 2003 (Co-contributions Act) • section 131-70 of Schedule 1 to the TAA, which relates to money received by us in accordance with a release authority, including – excess concessional and non-concessional contributions determinations issued on or after 1 July 2018 (whether for financial years commencing before, on or after 1 July 2018) [4] – notices of assessments of amounts of Division 293 tax issued on or after 1 July 2018 (whether for financial years commencing before, on or after 1 July 2018), and – first home super saver determinations issued on or after 1 July 2018 • subsections 17(2AB), 17(2AC), 20H(2AA), 24G(3A) and 24G(3B) of the Superannuation (Unclaimed Money and Lost Members) Act 1999. [5]

All legislative references in this Practice Statement are to the T(IOEP)A, unless otherwise indicated.

The following terms are used in this Practice Statement:

The rationale for the credit interest regime is to allow taxpayers to benefit from the period in which funds were held by the ATO and unavailable for their use.

Part IIA provides that IEP is payable only where the taxpayer makes a payment (or part payment) that is received by us more than 14 days before the due date for payment of certain liabilities. [12]

Parts IIB, IIC, IIE to IIG, III and IIIA provide when IOP is generally payable and this includes when an overpayment has arisen from: • an income tax assessment • certain amended assessments of surcharge or an advanced instalment and interest on certain offsets relating to no-TFN contributions income of superannuation funds and retirement savings account providers • decisions to which the T(IOEP)A applies • certain remissions, refunds and credits [13] of particular taxes that occurred as a result of a request by the taxpayer.

Part IIIAA provides that DRI is generally payable in relation to an RBA established to account for BAS amounts if a refund that we are required to give is not paid by the RBA interest day. [14]

Further detail of the circumstances when an amount of interest is payable by us under the T(IOEP)A and other Acts is provided in the following paragraphs of this Practice Statement.

A taxpayer's entitlement to credit interest arises strictly in accordance with the relevant provisions of the T(IOEP)A or other relevant Acts. When an amount of interest is payable under the T(IOEP)A, we have no discretion to alter the amount or basis (or both) of the taxpayer's interest entitlement. While the taxpayer may choose to forgo their entitlement to interest (for example, as part of a settlement agreement), this is their choice and not a decision by us.

IEP is payable in relation to: • income tax (including the Medicare levy and Medicare levy surcharge) • SIC under Division 280 of Schedule 1 to the TAA [15] • a compulsory repayment amount in respect of an accumulated Higher Education Loan Program (HELP) debt [16] • a compulsory Vocational Education and Training Student Loan (VSL) repayment amount • a compulsory Student Start-up Loan (SSL) repayment amount • a compulsory ABSTUDY SSL repayment • a compulsory Australian Apprenticeship Support Loan (AASL) repayment amount • a Financial Supplement (FS) assessment debt [17] • interest under section 102AAM of the ITAA 1936 • late lodgment penalty under former section 163A [18] of the ITAA 1936 • GIC for late lodgment under former section 163B or GIC in relation to debit amended assessments under former section 170AA [19] of the ITAA 1936.

Early payment interest is limited to the early payment of the amount due and only for the relevant period provided for in the T(IOEP)A.

If the taxpayer is not a full self-assessment taxpayer and makes a payment more than 14 days before the payment due date, the calculation of interest commences from the beginning of the later of the following: • the day on which the payment is made • the day on which the notice notifying the tax, debt, interest or instalment concerned is issued.

If the taxpayer is a full self-assessment taxpayer and they make a payment more than 14 days before the payment due date, the calculation of interest commences from the beginning of the day on which the payment is made.

For all taxpayers, their interest period will end on the earlier of the due date for payment or, in circumstances where the early payment is refunded before the due date, when the refund takes place.

For eligible payments made since 1 July 2021, the calculation and payment of the IEP is automatic.

For eligible payments made before 1 July 2021, claims for IEP should be made by the taxpayer or their agent by a written request to us or, alternatively, calculated and claimed via their tax return for the income year in which the interest entitlement arises.

IEP can only be paid after the due date for payment of the tax paid early has lapsed and only after that tax amount has been established. If the payment is to any extent refunded before the due date, interest is not payable on the payment to that extent, in respect to the period after the day on which the refund takes place.

If the interest has been offset against any outstanding taxation debts, the taxpayer will be advised in writing as to the nature and date of the offset.

If there is an overlap between IEP and IOP under Part IIB, IIC, IIE and IIF and IIG, the taxpayer is entitled to receive both the IEP and the relevant IOP payable. However, when there is an overlap between IEP and IOP under Part IIIA, section 8D removes the IEP entitlement.

Generally, the following parts of the T(IOEP)A deal with IOP:

IOP may be payable as a result of the application of certain credits, known as income tax crediting amounts, to the taxpayer's account at the time of processing an original return or at some later time.

Interest under Part IIB only applies in relation to income tax. [20]

Where interest applies under Part IIB, the provision of the T(IOEP)A that applies will depend on: • whether the taxpayer is a full self-assessment taxpayer or not, and • when we credited, applied or refunded the relevant income tax crediting amounts.

Interest is not payable under this Part in circumstances where the taxpayer's tax return has been lodged fraudulently by an unauthorised third party.

For an ordinary taxpayer, an entitlement to interest will arise under subsection 8E(1) where: • they lodge a tax return for a year of income • an assessment is made up of the income tax payable by them for the year of income • the notice of assessment notifies that we have credited, applied or refunded one or more income tax crediting amounts to them (this is called the 'notice crediting') for the year of income • the sum of their income tax crediting amounts exceeds the sum of their income tax and related liabilities (listed under subparagraphs 8E(1)(d)(i) to (v)) for the year of income, and • the notice crediting occurs more than 30 days after the day on which they lodged the relevant tax return. The interest is calculated on the amount of the excess.

The liabilities under subparagraphs 8E(1)(d)(i) to (v) include: • income tax payable for the year of income (after allowing any rebate, except a tax offset that is subject to the refundable tax offset rules, or deduction under subsection 100(2) of the ITAA 1936 and before allowing any crediting, applying or other payment) plus Medicare levy and any Medicare levy surcharge assessed on the taxable income (after adjustments) • a repayment amount that is notified on the notice of assessment, including – a compulsory repayment amount under the HESA – a compulsory VSL, SSL, ABSTUDY SSL or AASL repayment amount • an FS assessment debt • a liability under section 282-18 of the Private Health Insurance Act 2007 that is notified in the notice of assessment • interest for the year of income payable under section 102AAM of the ITAA 1936 (distributions from certain non-resident trust estates) immediately before the notice crediting.

Interest may also be payable to an ordinary taxpayer under subsection 8E(2) where: • they lodge an income tax return for a year of income • an assessment is made of the income tax payable by them for the year of income • we credited, applied or refunded one or more income tax crediting amounts to them after the income tax notice of assessment is issued (this is called a 'post-notice crediting') for a year of income, and • the sum of their income tax crediting amounts exceeds the sum of the amounts listed in subparagraphs 8E(2)(d)(i) to (v) for a year of income.

The amounts that are listed in subparagraphs 8E(2)(d)(i) to (v) are: • income tax payable for the year of income as reduced by any rebate, deduction under subsection 100(2) of the ITAA 1936, crediting, applying or other payment made before the post-notice crediting • a repayment amount that is payable by the taxpayer immediately before the post-notice crediting, including – a compulsory repayment amount under the HESA – a compulsory VSL, SSL, ABSTUDY SSL or AASL repayment amount • an FS assessment debt payable by them immediately before the post-notice crediting • a liability under section 282-18 of the Private Health Insurance Act 2007, payable by them immediately before the post-notice crediting, and • interest for the year of income payable by them under section 102AAM of the ITAA 1936 (distributions from certain non-resident trust estates) immediately before the post-notice crediting. The interest is calculated on the amount of the excess.

The periods for which interest is payable by an ordinary taxpayer on the amount of the excess under section 8F is as follows:

Where the taxpayer made a payment in anticipation of an income tax or related liability after the notice of assessment issued and before a post-notice crediting, interest is payable on the amount of the excess income tax crediting amounts that is attributable to the payment from the beginning of the day the payment was made until the end of the day on which the post-notice crediting occurs. Interest on the remainder of the excess credits that are attributable to the post-notice crediting is calculated as described in Table 3 of this Practice Statement.

Where multiple payments have been made after the notice of assessment has issued and before a post-notice crediting, the excess is attributable to a particular payment (to the extent that it would be set off against that payment) by setting off in the reverse order that the payments were made.

Interest is not payable on a payment if it attracts interest under Part III or it has already been taken into account in a previous application of Part IIB.

In relation to a full self-assessment taxpayer, subsection 8G(1) provides that interest will be payable where: • they lodged a tax return for a year of income • after they lodged the return, we credited, applied or refunded one or more income tax crediting amounts to them (this is called a 'first crediting') for the year of income • we have not previously credited, applied or refunded any income tax crediting amount for the year of income • the sum of their income tax crediting amounts exceeds the sum of income tax payable (after allowing any rebate, except a tax offset that is subject to the refundable tax offset rules, or deduction under subsection 100(2) of the ITAA 1936 and before allowing any crediting, applying or other payment) and interest payable under section 102AAM of the ITAA 1936 for the year of income, and • the 'first crediting' takes place after a specified date.

For interest to be payable under subsection 8G(1), the date on which the first crediting occurs must be either: • 30 days or more after the day on which the return was lodged (if they lodged the tax return at least 30 days before the payment due date for the assessed tax) (under paragraph 8G(1)(e)), or • after the payment due date for the assessed tax (if they lodged the tax return less than 30 days before the payment due date for the assessed tax [21] ) (under paragraph 8G(1)(f)). For clarification, paragraph 8G(1)(f) of the T(IOEP)A only applies where paragraph 8G(1)(e) does not apply.

The interest is calculated on the amount of the excess credit that remains after performing the calculation taking into account the amounts referred to in the third bullet point of paragraph 37 of this Practice Statement.

Subsection 8G(2) provides that interest will be payable in relation to a full self-assessment taxpayer, where: • they lodged a tax return for a year of income • after the first crediting, we credited, applied or refunded one or more income tax crediting amounts to them (this is called a 'later crediting') for the year of income, and • the sum of their income tax crediting amounts credited, refunded or applied via the later crediting exceeds the sum of the following amounts – income tax payable for the year of income as reduced by any rebate, deduction under subsection 100(2) of the ITAA 1936, crediting, applying or other payment made immediately before the later crediting, and – interest for the year of income payable under section 102AAM of the ITAA 1936 immediately before the later crediting. The interest is calculated on the amount of the excess.

The period for which interest is payable to a full self-assessment taxpayer on the amount of the excess arising from a 'first crediting' (under subsection 8H(1A)) is from the earlier of: (a) the 30th day after the day on which the person furnishes the return of income for the year of income; (b) the due date for payment of the assessed tax; until the end of the day on which the first crediting occurs.

The period for which interest is payable to a full self-assessment taxpayer on the amount of the excess arising from a 'later crediting' (under subsection 8H(2A)) is from the payment due date for the assessed tax until the day on which the later crediting occurs.

Where a full self-assessment taxpayer made a payment towards an income tax or related liability after the first crediting and before the later crediting, the period for which interest is payable on the amount of the excess income tax crediting amounts that are attributable to that payment (under subsection 8H(3)) is from the day the payment was made until the day on which the later crediting occurs.

Where multiple payments have been made after the first crediting and before a later crediting, the excess is attributable to a particular payment (to the extent that it would be set off against that payment) by setting off in the reverse order that the payments were made.

The term 'first crediting' is to be interpreted as meaning the date that we first credit, apply or refund one or more income tax crediting amounts in relation to the income tax payable for a full self-assessment taxpayer for the relevant year of income (being a date after they lodged their tax return).

The term 'later crediting' is to be interpreted as meaning the date (after the first crediting) that we next credit, apply or refund one or more income tax crediting amounts in relation to the income tax payable by a full self-assessment taxpayer for the relevant year of income.

The term 'credits' as it relates to the date of first crediting or later crediting includes the date on which we are deemed to have made an assessment of income tax payable for a full self-assessment taxpayer for the relevant year of income.

The term 'applies' as it relates to the date of first crediting (subject to paragraph 50 of this Practice Statement) or later crediting means the effective date of the transaction representing the partial or full offset of the excess income tax crediting amounts against the outstanding tax debt for a full self-assessment taxpayer.

The term 'refunds' as it relates to the date of first crediting (subject to paragraph 50 of this Practice Statement) or later crediting means the process date that the refund of the excess income tax crediting amounts is actually issued to a full self-assessment taxpayer (for example, the date that the refund is paid by electronic funds transfer into a full self-assessment taxpayer's bank account or the date that the cheque is sent by post to a full self-assessment taxpayer).

Notwithstanding the information provided in paragraphs 48 and 49 of this Practice Statement, under no circumstances should the effective date of the offset or the refund in relation to first crediting be earlier than the effective date of the underlying credit entitlement. That credit entitlement is the deemed issue date of the notice of assessment, being the lodgment date of the tax return.

In circumstances where there is both a partial offset and a residual refund in either first crediting or later crediting situations, there will be 2 interest calculations (unless the partial offset and residual refund occur at the same time). One calculation will be based on the offset amount with the end date being the effective date of the offset transaction and the other calculation will be based on the residual refund amount with the effective date being the date the residual refund is actually issued to a full self-assessment taxpayer.

IOP is payable under Parts IIC, IIE and IIF where an amount of surcharge or an advance instalment is overpaid following certain amendments to assessments under the: • Superannuation Contributions Tax (Assessment and Collection) Act 1997 • Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Act 1997.

Interest is payable under Parts IIC, IIE, IIF and IIG on the overpaid amount which starts from the later of: • the day on which the amount of the surcharge or advance instalment was paid, or • the day by which the amount of the surcharge or advance instalment was required to be paid. It ends on the day on which the assessment was amended.

Interest may also be payable under Part IIG to a superannuation provider in certain circumstances where an individual quotes a tax file number (TFN) to the provider resulting in a tax offset under Subdivision 295-J of the ITAA 1997.

Interest will be payable where: • an individual has quoted their TFN to their employer before the end of an income year • their employer failed to comply with the requirements set out in section 133 of the Retirement Savings Accounts Act 1997 or section 299C of the Superannuation Industry (Supervision) Act 1993 which requires them to inform the superannuation provider, to which they make contributions, of the individual's TFN before the end of the income year • due to the employer's failure to comply contributions made to that superannuation provider formed part of its no-TFN contributions income • tax payable on that no-TFN contributions income (the interest-bearing tax) counted towards the no-TFN contributions tax offset of the superannuation provider for the current year, and • the tax offset has been applied in an assessment in respect of the superannuation provider for the current year.

The interest is payable for a period from the day the interest-bearing tax on the no-TFN contributions income was paid or the day the interest-bearing tax was required to be paid (whichever is the later) until the day on which the assessment of the no-TFN contributions income tax offset is made. The interest is payable on each amount of interest-bearing tax.

IOP is payable under subsection 9(1) where [22] : • the taxpayer pays an amount of 'relevant tax' to us • all or part of the amount of 'relevant tax' paid is overpaid as a result of a 'decision to which this Act applies', and • the overpaid amount is refunded to the taxpayer or applied against their outstanding tax liability.

Generally, overpayments that arise from an amended assessment that reduces the taxpayer's liability to tax, as a result of a relevant decision by us, the ART or a court, will give rise to an entitlement to IOP.

For the purposes of Part III, the taxpayer's payment of an amount of 'relevant tax' includes where a credit assessment has been made by them and that credit assessment is subsequently amended to reduce their liability to tax (including where an original credit assessment is increased upon amendment).

The taxpayer is entitled to interest only on the overpaid amount. [23]

Interest entitlements pursuant to Part III are payable on the overpaid amount for the period starting from the later of: • the issue date of the notice of assessment (or deemed notice of assessment), determination or decision in relation to the 'decision to which this Act applies', or • the day on which the amount of relevant tax was paid. The period ends on the day on which the amount of overpaid relevant tax is refunded or applied.

Where an amount of relevant tax has been paid in instalments and, as a result of a decision to which this Act applies, only part of the relevant tax is overpaid, the amount so refunded or applied is to be attributed to the instalments in the reverse order to which the instalments were paid.

The term 'refunded' in the context of Part III (subject to paragraph 65 of this Practice Statement) means the effective date that the refund of the overpaid relevant tax is actually issued to the taxpayer (for example, the date that the refund is paid by electronic funds transfer into their account or the date that the cheque is posted to them).

The term 'applied' in the context of Part III (subject to paragraph 65 of this Practice Statement) means the effective date of the transaction representing the partial or full offset of the overpaid relevant tax against an outstanding tax debt.

Notwithstanding the information provided in paragraphs 63 and 64 of this Practice Statement, where the overpaid relevant tax is the result of an amended assessment, the relevant end date is the later of the date the credit was refunded or applied, or the notice was issued (for example, the effective date of the Notice of Assessment).

If we have amended the income tax assessment multiple times for a particular income year, the start date for the defined interest period under subparagraph 10(1)(a)(i) is the issue date for the Notice of Assessment issued which created the underlying liability that led to the overpayment.

Where the decision to which this Act applies is a decision by us, the ART or a court in regard to indirect tax or assessed GST [24] , an entitlement to interest may arise under either Part III (IOP) or Part IIIAA (DRI), but not both. That is, there is no double entitlement to interest. However, in accordance with the underlying intent of the T(IOEP)A, the taxpayer should receive whichever amount provides the greatest benefit.

Where a request has been made and the refund or remission takes place more than 30 days after the day on which the request is made, Part IIIA provides for an entitlement to IOP where we, as a result of the taxpayer's request [25] : • remit, under section 8AAG of the TAA, certain amounts of the GIC that have been paid (for example, the GIC under section 5-15 of the ITAA 1997 incurred in relation to unpaid assessed income tax liabilities) • remit, under section 280-160 of Schedule 1 to the TAA, the whole or part of an amount that has been paid to us in respect of SIC payable under Division 280 in that Schedule • refund the whole or part of a payment made by the taxpayer on account of assessed income tax and certain related liabilities (for example, a compulsory repayment amount payable under section 154-1 of the HESA).

Where an amount of the GIC that has been paid is remitted, an entitlement to interest may arise under either Part IIIA (IOP) or Part IIIAA (DRI) but not both. That is, there is no double entitlement to interest in relation to the remission of an amount of the GIC.

IOP under Part IIIA is calculated on the amount remitted, refunded or credited from the beginning of the 30th day after the day on which the request was made and up until the end of the effective day on which the remission, refund or crediting takes place.

If the taxpayer makes a payment of income tax before the day they lodge their tax return, the return will be considered a request for refund of the overpaid amount, made on the day of lodgment. There will be an entitlement to interest if the refund takes place more than 30 days after the request, regardless of whether the payment and lodgment occurred before, on or after the payment and lodgment due dates. The amount refunded may include other amounts which are not overpaid income tax – these are not eligible for payment of interest. Interest is limited to the amount overpaid as determined by the income tax assessment.

DRI is generally payable in relation to an RBA established to account for BAS amounts if a refund that we are required to give is not paid by the RBA interest day. [26] However, DRI is not payable where a notification required for the refund has not been given or is inaccurate [27] or there is a need to obtain further information. For example, a notification under any of the BAS provisions or a further (or fuller) GST return [28] that the taxpayer is required to give to us.

DRI is payable under section 12AA where: • we have allocated a BAS amount or PRRT amount to the taxpayer's RBA and an RBA surplus arises • under subsection 8AAZLF(1) of the TAA, we are required to refund the whole or part of that surplus, and • the refund takes place after the RBA interest day.

The RBA interest day as it relates to section 12AA means the 14th day after the latest of the following days: • the day on which the surplus arises • the day on which the taxpayer has given a notification to us that is required for the refund [29] under section 8AAZLG or 8AAZLGB of the TAA (as the case requires) and that is accurate so far as it relates to the refund • if subsection 8AAZLH(3) [30] of the TAA does not apply, the day on which the taxpayer nominates a financial institution account.

The RBA surplus will generally arise on the day the taxpayer gave us the notification required for the refund in the approved form of their credit entitlement for a particular tax period. [31] This would generally be when they lodged their activity statement or fuel tax return. In such cases, the RBA interest day would be 14 days after the lodgment received date.

In certain limited circumstances, the day on which the RBA surplus arises may be a day prior to when a notification required for the refund is given to us. For example, if the taxpayer lodged a revised activity statement or fuel tax return that results in a credit for a particular tax period, the RBA surplus would retrospectively arise on the original lodgment date as they were, in effect, entitled to the credit on that date. In such cases, the RBA interest day would be 14 days after the day that the revised activity statement or fuel tax return is given (in the approved form). [32] This day is later than the day on which the surplus arises and will therefore be the RBA interest day. Refer to Diagram 1 in this Practice Statement for an illustration of this. Diagram 1: Delayed refund interest period

We will not pay DRI where a notification that affects or may affect the amount that is refunded has not been given, is inaccurate [33] or there is a need to obtain further information – for example, where: • the taxpayer has not given us a notification that they are required to give us under any of the BAS provisions (for example, where they have outstanding activity statements or where we have requested further or fuller GST returns) • an activity statement is lodged and does not disclose an amount against all labels on the statement where the taxpayer has an expected liability for that period • the taxpayer makes an error on the activity statement (for example, arithmetic error) and it is necessary to contact them to obtain other information to process the activity statement, or • the taxpayer has not nominated an account at a financial institution into which the refund should be paid (unless we have exercised the discretion provided in subsection 8AAZLH(3) of the TAA).

In the situations outlined in paragraph 77 of this Practice Statement, the RBA interest day will be 14 days after the day the taxpayer provides the relevant information or notification or return to us. In addition, the notification that is provided must be in the approved form and must be accurate so far as it relates to the actual amount to be refunded.

DRI is also payable in accordance with section 12AB where: • we have allocated a BAS amount or PRRT amount to an RBA • the taxpayer requests a remission of a penalty that has been notified by us, and • as a result of the remission of penalty, an RBA surplus arises that we are required to refund under subsection 8AAZLF(1) of the TAA and the surplus is not refunded by the RBA interest day.

The RBA interest day as it relates to section 12AB, means the 14th day after the latest of the following days: • the day on which the request for remission is received • the day on which the taxpayer has given a notification to us that is required for the refund [34] under section 8AAZLG or 8AAZLGB of the TAA (as the case requires) and that is accurate as far as it relates to the refund • if subsection 8AAZLH(3) of the TAA does not apply, the day on which the taxpayer nominates a financial institution account.

Interest will be payable in these circumstances for the period from the end of the RBA interest day until the end of the day on which the refund takes place.

DRI is also payable in accordance with section 12AC where: • we have allocated a payment to an RBA • we have allocated or intend to allocate a BAS amount or PRRT amount to that RBA, and • the taxpayer requests a refund of an RBA surplus that has arisen as a result of a voluntary payment and that we are required to refund under subsection 8AAZLF(2) of the TAA, and the surplus is not refunded by the RBA interest day.

The RBA interest day as it relates to section 12AC means the 14th day after the latest of the following days: • the day on which the request for refund of the RBA surplus resulting from the voluntary payment is received • the day on which the taxpayer has given a notification to us that is required for the refund [35] under 8AAZLG or 8AAZLGB of the TAA (as the case requires) and that is accurate as far as it relates to the refund • if subsection 8AAZLH(3) of the TAA does not apply, the day on which the taxpayer nominates a financial institution account.

Interest is payable on the amount of the RBA surplus which is required to be refunded under section 8AAZLF of the TAA for the period from the end of the RBA interest day (that is, the beginning of the next day) until the end of the effective day on which the refund is actually issued.

Interest payable by us under the T(IOEP)A is assessable income when it is received (applied, credited or refunded). [36]

Generally, if an amount of interest is to be paid to a taxpayer that has an overseas address according to ATO records, or if we are authorised to pay the interest at a place outside of Australia, 10% of the interest is withheld under section 12-245 of Schedule 1 to the TAA.

Interest payable under the T(IOEP)A is also a 'credit' for the purposes of Part IIB of the TAA. Accordingly, we are required under Division 3 of Part IIB to the TAA to apply an amount of interest payable to the taxpayer against any amount due to the Commonwealth directly arising under a taxation law, including any such amount that is due but not yet payable.

A taxpayer will be entitled to a payment of interest by us if we pay none of the government co-contribution on or before the payment date for the co-contribution. [37]

Interest is payable: • on the amount of the government co-contribution, and • for the period from the payment date for the government co-contribution until the day on which we first pay an amount in satisfaction of that co-contribution.

A taxpayer will also be entitled to a payment of interest by us if we underpay a government co-contribution and we do not pay the underpaid amount in full on or before the payment date for the underpaid amount. [38]

Interest is payable: • on the unpaid amount of the government co-contribution (or payment shortfall) that remains unpaid on the payment date, and • for the period from the payment date for the underpaid amount until the day on which the underpaid amount is paid in full.

Additionally, if by an administrative error we have underpaid the amount of co-contribution, a taxpayer will be entitled to interest on the amount of the payment shortfall. Interest is payable for the period from the payment date for the government co-contribution until the payment date for the underpaid amount. [39]

The payment date is 60 days after we have received all of the information, required by the Co-contributions Act or requested by us under the Act, necessary to make a determination that a government co-contribution is payable and to whom the payment is to be directed. [40]

The interest that is payable under section 12 of the Co-contributions Act forms part of the actual government co-contribution. Therefore, it is treated for all purposes (for example, taxation purposes) in the same manner as the government co-contribution. The government co-contribution is not assessable income in the hands of the superannuation entity or the individual (sections 295-170 and 307-135 of the ITAA 1997).

The entitlement to interest for amounts released from superannuation is set out in section 131-70 of Schedule 1 to the TAA [41] and applies to: • excess concessional and non-concessional contribution determinations, where issued on or after 1 July 2018 (whether for financial years commencing before, on, or after 1 July 2018) • notices of assessments of amounts of Division 293 tax (where issued on or after 1 July 2018 (whether for financial years commencing before, on, or after 1 July 2018), and • first home super saver determinations issued on or after 1 July 2018.

A taxpayer will be entitled to interest for late payments where: • we issue a release authority to a superannuation provider in accordance with section 131-15 of Schedule 1 to the TAA • the superannuation provider pays the amount detailed in the release authority to us • they are entitled to a credit for that amount as mentioned in section 131-65 of Schedule 1 to the TAA • all or part of the credit is required to be refunded in accordance with Division 3A of Part IIB of the TAA, and • we do not refund the required amount within 60 days after receiving the amount from the superannuation provider.

Interest is calculated on a daily basis utilising the base interest rate that applies for each relevant day and the interest period is determined as follows: • beginning 60 days after the day we receive the amount, and • ending on the effective day that we refund the amount or the effective day that the relevant amount is applied or offset against the outstanding taxation liability.

Interest payable under section 131-70 of Schedule 1 to the TAA is assessable income at the time that it is received (applied, credited or refunded).

Interest payable is also a 'credit' for the purposes of Part IIB of the TAA. Accordingly, we are required under Division 3 of Part IIB of the TAA to apply an amount of interest payable against any amount due to the Commonwealth directly arising under a taxation law, including any such amount not yet payable.