This Practice Statement outlines the way we allocate payments and available credits to debts owed by taxpayers. Generally, payments and credits are allocated based on the type of tax debt outstanding.
The appendixes to this Practice Statement provide further guidance on how we allocate specific payments and credits to taxation liabilities: • Appendix A outlines how you should allocate certain payments, known as 'listed payments' [1] , when we receive them. • Appendix B outlines how you should allocate 'listed credits' [2] when they arise. • Appendix C outlines how we allocate an excess payment or credit. [3] It includes the order of specific accounts that we generally follow, as well as the order that liabilities within those accounts are paid. • Appendix D outlines how our system automatically allocates payments and credits depending on which account the excess credit originates from.
All legislative references in this Practice Statement are to the Taxation Administration Act 1953, unless otherwise indicated.
A payment is an amount that we receive from a taxpayer in respect of a current or anticipated tax debt. [4]
A credit is an amount to which a taxpayer is entitled (such as an amount resulting from an assessment) that we must pay to a taxpayer under a tax law. [5]
A taxpayer generally directs the payment to an account by making a payment through the approved process, which includes using a payment reference number (PRN).
Where a payment matches a specific liability amount, we will also use that as the basis for directing a payment to a liability.
The majority of payments and credits we receive are allocated in this way. However, there may be some circumstances where we need to determine where the payment or credit will be applied.
Where we receive unidentified payments [6] or a credit arises, we will follow the allocation rules outlined in Appendix C to this Practice Statement.
The following outlines some basic rules and principles about the payment of tax debts: • We can only accept payment of a tax debt in Australian currency. [7] • A payment for a tax debt is taken to be made only when it is received by us. [8] • A taxpayer's payment may be accompanied by correspondence which places conditions on the acceptance of the payment. Accepting the payment does not bind us to these conditions and you should inform the taxpayer of this as soon as possible. In some instances, you may treat these conditions as a proposal to us (for instance, the taxpayer may be proposing to pay an amount by instalments or may be requesting remission of interest) and you should advise the taxpayer whether the proposal has been accepted. • Payments (whether partial or full) [9] are allocated to the appropriate accounts based on the information available when the payment is received. • Sometimes, the administrator of an insolvent company may offer equity in the company to creditors. This situation is discussed in Law Administration Practice Statement PS LA 2011/16 Insolvency – collection, recovery and enforcement issues for entities under external administration.
Generally, we will apply a payment to a particular account based on the PRN that has been used by the taxpayer, and we will allocate within that account in the manner outlined in Appendix C to this Practice Statement.
None of this overrides the law enabling us to allocate payments as we see fit and we may allocate the payment differently to the direction indicated by the PRN or specific instructions. [10]
If you decide to allocate a payment in a manner that is inconsistent with the general allocation policy, you must record specific reasons outlining why you have made this decision. This includes where you have reallocated a payment on request by a taxpayer. Note: there are specific rules which may modify this policy where the payment is a listed payment. These are outlined in Appendix A to this Practice Statement.
If we receive a payment with no PRN, we will allocate it in accordance with Appendix C to this Practice Statement.
Credits can arise on a taxpayer's account as a result of lodgments, amended assessments, account adjustments or credit entitlements at law.
Where there is a credit, you should first allocate it to the account from which the credit originates. Generally, before refunding a credit to a taxpayer, it must be applied to any outstanding debts. [11]
Any excess credit will then be allocated to accounts in accordance with the order of accounts outlined in Appendix C to this Practice Statement.
Within each account, the credit will be allocated in accordance with the account's specific hierarchy of allocation as explained in Appendix C to this Practice Statement. Note: there are specific rules which may modify this policy, such as, where the payment is a 'listed credit'. These are outlined in Appendix B to this Practice Statement.
Where there are no unpaid tax debts to apply a payment against, before any amount is refunded to a taxpayer it will be allocated to the following Services Australia amounts: • firstly, to any Family assistance debt (excluding the childcare subsidy), provided the refund relates to income tax • next, to any child support debts as notified by the Child Support Program, and • lastly, to debts in relation to social security, family assistance or student assistance.
For more information, see: • Director penalties • Law Administration Practice Statement PS LA 2011/4 Collection and recovery of disputed debts • Law Administration Practice Statement PS LA 2011/21 Offsetting of refunds and credits against taxation and other debts • Indirect tax sharing agreement - reasonable allocation of indirect tax law liability .
Appendix A – Listed payments
The following payments have specific rules which apply to their allocation.
We often agree for a tax debt to be paid by instalments. [12] A payment received in accordance with such an arrangement will be allocated using the 'order of allocation' as outlined in Appendix C to this Practice Statement. A PRN will be provided to the taxpayer to direct the instalments to the correct account and liability.
Generally, where there are multiple debts recorded on different accounts, the order of allocation will determine in which order payments will be applied to those accounts.
However, you can take into account individual circumstances to allocate payments differently if it will achieve a more appropriate and reasonable outcome for the taxpayer, with no detriment to the revenue.
For example, a taxpayer may have a super guarantee liability and a judgment obtained on another account. If that taxpayer wanted to enter into concurrent payment arrangements to specifically address the judgment liability as soon as possible, it may be permissible to alter the order of allocation.
The core principle, in agreeing to a payment arrangement that may alter the order of allocation, is to consider a taxpayer's individual circumstances.
Where an administrative overpayment [13] is returned, you should allocate the payment to the overpaid amount.
Where there is a written agreement with a taxpayer in accordance with former section 222ALA of the Income Tax Assessment Act 1936, you must allocate a payment in the order detailed in that agreement. These agreements will have been made before 1 July 2010, but some are still in effect.
Where you can identify a taxpayer has directed a payment towards a particular liability of a company arising under a remittance provision (for example, a pay as you go (PAYG) withholding obligation), you should generally allocate the payment to that liability.
Where a payment is received from a director (in full or in part) in relation to a director penalty liability [14] , the payment will reduce the penalty on the director's account and the corresponding parallel liability on the company's account.
If the payment is for less than the full amount, the payment will be allocated against the earliest penalty on the director's account and will offset the company's parallel liability.
Where the taxpayer has entered into a fifty-fifty arrangement in relation to a disputed debt [15] , you should allocate the payments received (in accordance with that arrangement) to 50% of the disputed principal tax debt.
Any additional payment after the 50% disputed principal tax debt has been paid will follow the order of allocation in Appendix C to this Practice Statement.
Payments made towards debts subject to legal action in the income tax account will be allocated to the earliest debt, first using relevant allocation hierarchy.
Payments made for the activity statement running balance account (RBA) legal account will follow the proportional allocation rules.
Generally, when applying payments to a case where judgment has been entered against a taxpayer, payments will be allocated firstly against the judgment debt and then to the costs involved in obtaining the judgment.
However, for judgments entered into in New South Wales State Courts, you must follow the Civil Procedure Act 2005 (NSW) [16] , which requires that any payment made on account of a judgment debt is to be allocated firstly towards any post-judgment (or later date as the court orders) interest and then towards the balance of the judgment.
Where a payment is made pursuant to a garnishee notice which satisfies the liability on the notice, you must allocate the payment to the amounts that constitute the total payable in that notice.
Where a part-payment towards the amount stipulated on the garnishee notice is received, you should allocate this amount to the debts subject to the garnishee notice, in accordance with the order of allocation in Appendix C to this Practice Statement. How payments are allocated within that account will depend on the allocation rules for that account, which are also outlined in Appendix C.
If the amount on the garnishee notice has been settled, any excess payments received will be allocated to other liabilities not subject to the notice in accordance with Appendix C to this Practice Statement.
Where payments are made voluntarily for an anticipated tax debt in an account (not including the activity statement RBA), you should use the order of allocation as outlined in Appendix C to this Practice Statement if there are existing debts on that account.
If there are existing tax debts in the activity statement RBA, where there is also an expected lodgment, then the voluntary payment made will be allocated to that anticipated lodgment. However, where that anticipated lodgment is not received within the specified timeframe [17] , then the payment will be allocated according to the activity statement RBA allocation rules, with any excess to be allocated according to Appendix C to this Practice Statement.
You should allocate payments of dividends of less than 100c in the dollar according to the account's hierarchy rules (Appendix C to this Practice Statement) to each tax debt and other debts (such as judgment interest) that formed our claim in the administration. [18]
Where all, or part, of a debt is an activity statement RBA deficit debt (which is the balance of all activity statement debts as well as payments and credits on an RBA), you should allocate the dividend proportionally among the components of the activity statement debts. Once these debts are extinguished, you should allocate any excess credit proportionally to debts relating to the activity statement debts, such as the provable general interest charge (GIC).
Where a company has a liability that is also subject to a director penalty (a parallel liability), you should apply the instruction in this Practice Statement to identify the balance subject to director penalties. Any dividend that is applied to the liability subject to the director penalty will also reduce the director penalty liability.
Where the dividend received relates to super guarantee charge (SGC) liabilities, you must allocate in accordance with the following rules.
The order of allocation for payments of SGC priority dividends, subject to capping [19] , is the: • nominal interest component • total of the individual super guarantee shortfall • administration component.
Allocation is pro rata across all periods of one component [20] of the SGC debt followed by the next component according to this order of allocation.
If there are insufficient funds to pay the total of a particular component across quarters, the component will receive a percentage of the balance of the dividend remaining in accordance with the portion that the quarter's component represents of the total outstanding for that particular component.
The order of allocation for payments of non-priority SGC dividends which follow priority dividends is: • if priority dividends paid previously were subject to capping [21] , any balance outstanding for nominal interest or individual super guarantee shortfall for excluded employees • additional GIC for the unpaid total of the individual super guarantee shortfall • Part 7 of the Superannuation Guarantee (Administration) Act 1992 (SGAA) penalty charges • additional GIC for unpaid Part 7 of the SGAA penalty charges.
Allocation is pro rata across all periods of one component of the SGC debt followed by the next component according to this order of allocation.
If there are insufficient funds to pay the total of a particular component across quarters, the component will receive a percentage of the balance of the dividend remaining in accordance with the portion that the quarter's component represents of the total outstanding for that particular component.
For insolvency administrations after 5 May 2003, the order of allocation for payments of SGC priority dividends, subject to capping [22] , should be: • the nominal interest component • the total of the individual super guarantee shortfall • additional GIC for the unpaid total of the individual super guarantee shortfall • the administration component.
Allocation is pro rata across all periods of one component of the SGC debt followed by the next component according to this order of allocation.
If there are insufficient funds to pay the total of a particular component across quarters, the component will receive a percentage of the balance of the dividend remaining in accordance with the portion that the quarter's component represents of the total outstanding for that particular component.
The order of allocation for payments of SGC non-priority dividends which follow priority dividends should be: • if priority dividends paid previously were subject to capping, any balance outstanding for nominal interest or individual super guarantee shortfall for excluded employees • additional GIC for the unpaid total of the individual super guarantee shortfall • Part 7 of the SGAA penalty charges • additional GIC for the unpaid Part 7 of the SGAA penalty charges.
Allocation is pro rata across all periods of one component of the SGC debt followed by the next component according to this order of allocation.
If there are insufficient funds to pay the total of a particular component across quarters, the component will receive a percentage of the balance of the dividend remaining in accordance with the portion that the quarter's component represents of the total outstanding for that particular component.
The way you allocate payments made in relation to a consolidated group liability will depend on whether a tax sharing agreement (TSA) exists.
If an effective TSA exists: • A payment by the head company will be allocated to the head company liability and the TSA contributing members' liabilities to an amount equalling the reduced head company liability. • A payment by a TSA contributing member will be applied against that member's liability and the head company liability.
If no TSA exists, all members are jointly and severally liable. This means that: • A payment by a subsidiary member in relation to a group liability will be applied against that liability and will also reduce all related subsidiary members' liabilities and the related head company liability. • A payment made by the head company will be applied against the head company group liability and will also reduce the related subsidiary members' liabilities.
Further information is outlined in Law Administration Practice Statement PS LA 2013/5 Collection of consolidated group liabilities.
The way you allocate payments made in relation to a goods and services tax (GST) joint venture or GST group liabilities will depend on whether an indirect tax sharing agreement (ITXSA) exists.
Where a valid ITXSA exists: • A payment from a participant or member will be applied against the participant or member's liability and also reduce the related operator or representative member's liability. • A payment from the operator or representative will be applied to their liability and may also reduce each participant or member's liability, depending on the terms of the ITXSA.
Where there is no ITXSA: • A payment from a participant or member will be applied to their personal joint and several [23] liability. It will also reduce the liability of all participant or group members as well as the related operator or representative member's liability. • A payment from the related operator or representative member will be applied to their liability and will also reduce the participant or member's joint and several liabilities equally.
Further information is outlined in Law Administration Practice Statement PS LA 2013/6 Collection from goods and services tax (GST) groups, GST joint ventures and other entities of debts arising from indirect tax laws.
Shortfall interest charge (SIC) is posted to the relevant account for the underlying liability on which it is charged (for example, income tax). The allocation for this liability follows the income tax account hierarchy as outlined in Appendix C to this Practice Statement.
You should allocate payments towards GIC using the same allocation rules that apply to the relevant account on which GIC is charged. See Appendix C to this Practice Statement for further information about the allocation rules for different accounts.
You should allocate an SGC payment to a specific debt where the payment is directed by the employer at the time of making the payment (for example, if the employer specifies which employee it applies to).
You should allocate a payment towards an estimate of SGC if we can identify the employee that the payment is to be allocated toward (for example, if the employer specifies where the payment should go).
Once a payment towards SGC has been made and applied against the employer's liability, this will credit the employees' entitlements of SGC shortfall, associated GIC and the nominal interest component according to the allocation rules of the SGC account in Appendix C to this Practice Statement.
If there is only one employee with an entitlement, the payment will be applied in full to this employee. If there are multiple employees with entitlements, the payment will be applied proportionally across these employees.
You should allocate super excess contribution tax payments to a corresponding excess contribution tax assessment where you can identify that the payment has been directed towards that liability (for example, if the payment dollar matches that liability).
If a designated local entity [24] (DLE) is elected to lodge a Combined Global and Domestic Minimum Tax Return (CGDMTR), the DLE may pay the top-up tax liabilities for each entity using each entity's PRN.
Where a DLE makes a payment equal to the total top-up tax liability of other entities to their own account, this payment should first be allocated to the DLE's GDMT account according to the allocation order set out in Appendix C to this Practice Statement. Any excess should be allocated to the DLE's other liabilities according to Appendix C.
Appendix B – Listed credits
The following credits have specific rules which apply to their allocation.
There is a special rule that operates when you apply credits arising under the PAYG withholding provisions [25] which provides that before allocating it to a non-RBA tax debt (which are tax debts other than an RBA deficit debt), you should allocate this credit to the following amounts in the following order: (a) compulsory repayment amounts arising under the Higher Education Support Act 2003 (b) compulsory Vocational Education and Training Student Loan repayment amounts (c) compulsory Student Start-up Loan repayment amounts (d) compulsory ABSTUDY Student Start-up Loan repayment amounts (e) compulsory Australian Apprenticeship Support Loan repayment amount s, and (f) Financial Support assessment debts.
Where an entitlement to a credit for instalments payable in relation to GST instalments, PAYG instalments, or fringe benefits tax (FBT) instalments arises where we make an assessment of the annual returns for GST, income tax or FBT, you should allocate that credit to those respective assessed taxes for that income year.
You should allocate credits arising from account adjustments against the account posting to which it pertains. Any excess credit is allocated in accordance with Appendix C to this Practice Statement.
A debt may have previously been reduced by a payment or credit and then may later be subject to an account adjustment. In these situations, where an excess credit arises, you should allocate it to reduce unpaid component debts due and payable on the relevant account. Once that account has no further liabilities, you should allocate any excess credit to pay debts in other accounts in the order outlined in Appendix C to this Practice Statement.
A SIC or GIC remission posting should be allocated against the imposition posting to which it relates. However, at times, a GIC remission may not be easily identified with amounts which have been imposed. Where this occurs, you should allocate the GIC remission to the earliest GIC debts on the account. Any excess can be used to pay other debts in other accounts in the order outlined in Appendix C to this Practice Statement.
You must allocate credits relating to pre-insolvency periods to pre-insolvency debts; firstly, to pre-insolvency debts on the account on which the credit originates and then to accounts as listed in the order of allocation in Appendix C to this Practice Statement.
You must allocate any further or remaining credit against any post-insolvency debts on the account on which the credit originates and then against any other post-insolvency debts as listed in the order of allocation in Appendix C to this Practice Statement.
For further information on how credits may be allocated in insolvency administrations, refer to PS LA 2011/16 and PS LA 2011/21.
You must allocate credits relating to post-insolvency periods firstly to post-insolvency debts on the account on which the credit originates and then to accounts as listed in the order of allocation in Appendix C to this Practice Statement.
You must allocate any remaining post-insolvency credit against any pre-insolvency debts on the account on which the credit originates and then against any other pre-insolvency debts as listed in the order of allocation in Appendix C to this Practice Statement.
Note that credits under the Product stewardship for oil program generally cannot be offset against pre-insolvency debts. [26] However, where a receiver has been appointed, credits should be applied against any liabilities of the entity regardless of the period. This is because the appointment of a receiver would not normally impact on the rights of unsecured creditors, including a right of legal set-off.
For further information on credits in insolvency administrations, refer to PS LA 2011/21.
When an income tax assessment is made in relation to the head company, you should initially apply any credit entitlements to the assessed tax payable for that income year.
Any excess credit will then be allocated to the head company's PAYG instalment obligations for that income year, commencing with the instalment that has the earliest due date and any related penalties (such as SIC and GIC).
Any remaining credit would then be allocated to: • any other unpaid assessed tax or related administrative penalty of the head company, commencing with the debt that has the earliest due date • any other liability of the head company as listed in the order of allocation in Appendix C to this Practice Statement.
A credit in relation to PAYG instalments for choosing a varied instalment rate or estimating a benchmark tax will be initially allocated to the related instalment liability.
Where a GST group exists, you must apply a credit of a member initially against any of their own tax liabilities. [27] If that member has no tax liabilities, the amount would then be allocated proportionally across the group's activity statement RBAs, commencing with the member that has the earliest period tax debt for each tax type. This may be modified by a valid ITXSA.
Similarly, where a GST joint venture exists, you may offset a participant's credit against any GST or fuel tax related debt incurred by the GST joint venture.
Appendix C – Order of allocation
The following lists the order of allocation our system uses for allocating to particular debt components within these accounts. This account hierarchy is also to be utilised by staff for manually allocating excess credits and for payments where no direction has been received.
To super account liabilities using the following hierarchy: (a) To any SGC debts, commencing with the debts that have the earliest due date, applying the payments in the following order (i) nominal interest (ii) shortfall (iii) shortfall GIC (iv) administration fee (v) Part 7 (vi) Part 7 GIC (vii) shortfall penalty (viii) shortfall penalty GIC (ix) super guarantee employer estimate. The same order is to be followed in applying payments to each subsequent period debt until all outstanding SGC debts are finalised. Where there has been a late payment offset and a further payment is made to be applied for the benefit of multiple employees, the proportional entitlement for each employee must first be calculated then applied to pay nominal interest pro rata across all employees. (b) Payments received in respect of a director penalty relating to an SGC liability are to be credited towards the earliest SGC director penalty debt in the following order (i) nominal interest (ii) shortfall (iii) administration fee (iv) estimated liability. The same order is to be followed in applying payments to each subsequent period until all outstanding director penalty debts are finalised. Payments received in respect of an estimate of SGC under Division 268 of Schedule 1 are to be credited first towards the estimate relating to the earliest period.
To the RBA which records our activity statement liabilities. A payment or credit in our activity statement account will be allocated in the following way: (a) If a payment 'dollar matches' either a single or group debt you should allocate it to that debt. (b) If a payment matches the total amount of a period and a single debt you should allocate it to the total amount of the period. (c) Where a payment is made to the activity statement RBA, the payment will await allocation for up to 14 days if (i) the payment does not dollar match any debts, and (ii) there is an expected lodgment. Where 14 days has elapsed, the payment may be applied against other outstanding debts, first within the activity statement RBA and, once all outstanding debts on the same account are finalised, any residual payment may be applied against debts on other accounts according to the account hierarchy in Appendix D to this Practice Statement. (d) Once all activity statement debts within that period are satisfied, any remaining amount will be proportionally allocated to non-activity statement debts, such as penalties and GIC within the same period. The same order is to be followed in applying payments to each subsequent period until all outstanding debts are finalised (i) GST (ii) GST conversion role (iii) GST instalment (iv) wine equalisation tax (v) luxury car tax (vi) fuel tax credit (vii) FBT (viii) PAYG – withholding (ix) PAYG – large (x) PAYG – conversion (xi) PAYG – instalments (xii) PAYG – trust (xiii) activity statement former account (xiv) administrative penalties (xv) GST Annual Information Report (xvi) Single Touch Payroll Reporting (xvii) pay as you go withholding (PAYGW) Annual Reporting (xviii) PAYG(W) Payment Summary Report (xix) Report – PAYGW No ABN (xx) Report – PAYG Withhold Dep Super (xxi) Report – PAYGW Non-Resident (xxii) Report PAYG Withhold Int N-Res (xxiii) pay as you go instalments (PAYGI) Annual Reporting (xxiv) franking tax (xxv) New Zealand franking entity (xxvi) GIC.
To any debt within a GST joint venture account in the following order proportionally to the debts on the earliest activity statement period within the activity statement RBA. Once all activity statement debts within that period are satisfied, any remaining amount will be proportionally allocated to non-activity statement debts, such as GIC within the same period: (a) GST (b) GST conversion role (c) wine equalisation tax (d) luxury car tax (e) fuel tax credit (f) activity statement debt from a former account (g) administrative penalties (h) GIC.
To any debt within a GST limited registration entity (LRE) account.
To any debt which represents dividend, interest and royalty withholding tax debts, including any associated charges and penalties.
To any debt within an FBT account, including any associated charges and penalties to the earliest period within the account following the hierarchy: (a) conversion FBT (b) FBT (c) GIC.
To any debt within a super surcharge account, including any associated charges and penalties to the earliest period within the account following the hierarchy: (a) surcharge superannuation provider (b) GIC (c) unfunded defined benefit (UDB) surcharge superannuation provider (d) surcharge superannuant (e) UDB surcharge superannuant.
To any debt within a super surcharge for a constitutionally protected fund (CPF) to the earliest period within the account following the hierarchy: (a) CPF surcharge exit (b) CPF surcharge (c) end of year interest.
To any debt within a minerals resource rent tax (MRRT) account, including any associated charges or penalties to the earliest period within the account following the hierarchy: (a) MRRT instalments (b) MRRT Instalments Consolidated Group Head (c) MRRT (d) MRRT Consolidated Group Head (e) GIC (f) administrative penalties.
To any debt with a tax-sharing amount for an MRRT account including any associated charges or penalties.
To any debt within a petroleum resource rent tax (PRRT) account, including any associated charges or penalties to the earliest period within the account following the hierarchy: (a) PRRT instalments (b) PRRT Instalments Consolidated Group Head (c) PRRT Consolidated Group Head (d) GIC (e) administrative penalties.
To any debt with a tax-sharing amount for a PRRT account, including any associated charges or penalties.
To any debt within an excise (duty) account, including any associated charges and penalties to the earliest period within the account following the hierarchy: (a) excise or customs conversion (b) excise delivery authority (c) excise duty (d) duty-free operator off airport (e) duty-free operator on airport (f) excise claims.
To any debt within an excise equivalent goods account, including any associated charges and penalties to the earliest period within the account following the hierarchy: (a) customs indirect taxes (b) GIC (c) excise or customs conversion (d) customs fee (e) non-administrative penalty (f) customs claim (g) customs duty.
To any debt within an excise infringement account, including any associated charges and penalties.
To any debt within an excise customs demand account. A payment or credit in an excise customs demand account should be allocated in the following way: (a) If a payment 'dollar matches' either a single or group debt, you should allocate it to that debt. (b) If a payment matches the total amount of a period and a single debt, you should allocate it to the total amount of the period. (c) The payment should be allocated proportionally to the earliest period within the excise customs demand account where a payment is made to the excise customs demand account, and (i) does not dollar match any debts, and (ii) there are both excise and customs debts in the same account.
To any debt within a grants or benefits scheme account arising under the Product Grants and Benefits Administration Act 2000, including any associated charges and penalties.
To any debt within a diesel and alternative fuels grants scheme account, including any associated charges and penalties.
To any debt with a diesel fuel rebate scheme debt, including any associated charges and penalties.
To any debt within an international wine equalisation tax rebate scheme account, including any associated charges and penalties.
To any debt which represents an assessed net fuel amount greater than zero (where the taxpayer is not registered or required to be registered for GST).
To any debt which represents franking deficit tax, over-franking tax or venture capital deficit tax, including any associated charges and penalties.
To any debt within a self-managed super fund supervisory levy account, including any associated charges or penalties.
To any debt within an income tax debts account, including any associated charges and penalties. [28]
A payment or credit will be allocated in the following way: (a) If a payment 'dollar matches' a single debt, you should allocate it to that debt. (b) If no dollar match occurs, the payment received is applied to the earliest outstanding period within the role, based on period start date. (c) If a credit is unable to offset the total amount of liabilities on that role, then that credit is to be applied to the individual debt components, based upon the role allocation hierarchy. The earliest outstanding period within the highest role is paid first, based on period start date following this order (i) income tax from former account (ii) franking tax (iii) income tax – individual (iv) income tax – company (v) income tax – consolidated group (vi) income tax – trust (vii) income tax – super fund (viii) income tax – partnership (ix) income tax – government (x) family trust distribution tax (xi) ultimate beneficiary tax (xii) Division 293 tax due and payable (xiii) excess contributions tax (xiv) GIC (xv) administrative penalties (xvi) Investment Income Report (xvii) income tax – non-compliance.
To any debt which represents only tax-sharing amounts for assessed income tax debts, including any associated charges and penalties following the income tax role hierarchy.
To any debt within a GDMT account, including any associated charges or penalties to the earliest period within the account following the hierarchy: (a) Domestic Minimum Tax (b) Australian IIR tax/ Australian UTPR tax (c) Administrative penalties (d) GIC.
To any debt within the assessed super excess contributions tax account, including any associated charges and penalties to the earliest period within the account following the hierarchy: (a) excess contribution for income tax (b) excess contribution for superfunds (c) administrative penalties.
To any tax debt within our legal action account. Legal accounts will all have an underlying source account. A payment to a legal action account will follow the payment allocation rules for the underlying source account.
To any debt within our transfer balance accounts.
To any secondary tax debts (for example, the costs involved in obtaining a judgment against a taxpayer).
To any judgment costs with the debts that have the earliest due date, applying the payments in the following order: (a) costs ordered by the Court – administration costs (b) fines ordered by the Court – administration fines.
To any director penalty amount in respect of PAYG withholding (or an estimate of PAYG withholding) pursuant to Division 269 of Schedule 1, commencing with the earliest period director penalty amount until all penalty amounts are finalised.
To any director penalty amount in respect of GST.
To any debt which represents PAYG withholding non-compliance tax (NCT), commencing with the earliest period NCT amount.
To tax debts that are subject to objection, review or appeal, including any associated charges and penalties.
To tax debts associated with the first home super saver (FHSS) tax account: (a) FHSS tax role (b) GIC.
To any debts associated with the first home super saver scheme tax account (FHSA): (a) FHSA Provider Report (b) FHSA payment (c) return of FHSA contribution (d) recovery of FHSA contribution (e) FHSA penalty (f) FHSA Report – Holder Details (g) FHSA Government contributions (h) intermediary – FHSA supplier (i) FHSS role (j) FHSS tax role.
To any further amounts due to the Commonwealth directly under a taxation law, which are due but not yet payable: (a) to the integrated client account (ICA) of a trust beneficiary following allocation order, to the earliest period within the account following the hierarchy (i) activity statement former account (ii) trust beneficiary PAYGI (iii) administrative penalties (iv) activity statement reporting (v) PAYGI Annual Reporting (vi) GIC (b) to the trust beneficiary non-disclosure liabilities (c) ultimate beneficiary non-disclosure.
To the tax account which administers our taxable payment reporting system (TPAR) account to the earliest period within the account following the hierarchy: (a) TPAR role (b) TPAR GIC role (c) Early Stage Innovation Companies Report Reporter role (d) Business Transactions through Payment Systems (BTTPS) Reporting Role (e) BTTPS GIC role.
To the tax account which administers our Sharing Economy Reporting Regime (SERR) to the earliest period within the account following the hierarchy: (a) administrative penalties (b) GIC.
To the tax account which represents amount owed to us in respect to securities and monies in trust.
To the foreign double-tax account in the following allocation order to the earliest period within the account following the hierarchy (a) trust income tax – conversion (b) trust beneficiary income tax (c) GIC (d) administrative penalties.
To the tax account under the super direction to pay regime.
To the tax account under the GST withholding regime.
To the tax account which represents a civil penalty promotion scheme.
To the account in respect to our Foreign Investment Review Board (FIRB) Accounts to the earliest period within the account following the hierarchy: (a) FIRB role (b) FIRB vacancy fee role (c) administrative penalties (d) GIC.
To the account in respect to our exchange of information with foreign government agencies, known as the automatic exchange of information (AEOI) Admin Account to the earliest period within the account following the hierarchy: (a) Common Reporting Standard Reporter (b) Foreign Account Tax Compliance Act Reporter (c) GIC (d) administrative penalties.
To Major Bank Levy accounts (the Major Bank Levy Act 2017 and the Treasury Laws Amendment (Major Bank Levy) Act 2017).
To any further amounts due to the Commonwealth directly under a taxation law, which are due but not yet payable.
To any government agency costs and fines account.
Appendix D – Automatic system order of allocation of payments and credits
The following lists the automatic order of allocation of our systems. The account hierarchy of each particular account is unique when allocating.
Depending on which account the excess credit originates from, it will follow the order of allocation listed in this Appendix.
We note that allocation varies slightly between these accounts and, at some point in future, we may look to align the allocation policy. However, this is how we allocate at this time.
The superannuation system allocates following the hierarchy: (a) Superannuation Guarantee Employer (b) Super Guarantee Director Penalty Account (c) Integrated Client Account (d) GST Joint Venture Account (e) ICA Trust Beneficiary (f) Fringe Benefits Tax Account (g) Income Tax Account (h) Costs Ordered by Court Account (i) Fines Ordered by Court Account (j) PAYGW Director Penalty Account (k) GST Director Penalty Account (l) Superannuation (m) First Home Saver Account (n) Entity Endorsement Account (o) Fund Endorsement Account (p) Unclaimed Super Money (USM) Superannuation Account (q) USM Unmatched Account (r) Superannuation Holding Account (SHA) Special Account (s) SG Overpaid Distributions Account (t) External Agency.
The integrated client account allocates following the hierarchy: (a) Integrated Client Account (b) GST Joint Venture Account (c) Miscellaneous Amounts – Admin Account (d) GST LRE Account (e) Superannuation Guarantee Employer (f) Super Guarantee Director Penalty Account (g) ICA Trust Beneficiary (h) Fringe Benefits Tax Account (i) Income Tax Account (j) GDMT Account (k) FHSS Scheme Account (l) Transfer Balance Account (m) Costs Ordered by Court Account (n) Fines Ordered by Court Account (o) PAYGW Director Penalty Account (p) GST Director Penalty Account (q) Superannuation (r) First Home Saver Account (s) Entity Endorsement Account (t) Fund Endorsement Account (u) USM Superannuation Account (v) USM Unmatched Account (w) SHA Special Account (x) SG Overpaid Distributions Account (y) FIRB Account (z) AEOI Admin Account (aa) Miscellaneous Penalty Account (bb) External Agency.
The income tax account allocates following the hierarchy: (a) Income Tax Account (b) GDMT Account (c) Superannuation Guarantee Employer (d) Super Guarantee Director Penalty Account (e) Integrated Client Account (f) GST Joint Venture Account (g) GST LRE Account (h) ICA Trust Beneficiary (i) Fringe Benefits Tax Account (j) First Home Superannuation Saver Tax Account (k) FHSS Scheme Account (l) Transfer Balance Account (m) Costs Ordered by Court Account (n) Fines Ordered by Court Account (o) PAYGW Director Penalty Account (p) GST Director Penalty Account (q) Superannuation (r) First Home Saver Account (s) Entity Endorsement Account (t) Fund Endorsement Account (u) USM Superannuation Account (v) USM Unmatched Account (w) SHA Special Account (x) SG Overpaid Distributions Account (y) FIRB Account (z) AEOI Admin Account (aa) Miscellaneous Penalty Account (bb) External Agency.