A GIC remission request asks the Commissioner to cancel some or all of the interest on a tax debt. Section 8AAG of the Taxation Administration Act 1953 grants the discretion. The general interest charge runs at 11.51 per cent for the October to December 2026 quarter, compounding daily. GIC lost tax deductibility from 1 July 2025, so remission is now the only relief on ATO interest.
Successful requests rest on three grounds: circumstances beyond the taxpayer’s control, fair and reasonable treatment of self-caused delay, and ATO error. A written request with evidence of cause, action, and payment conduct carries far more weight than a phone plea.
What Is the General Interest Charge in 2026?
The general interest charge is the ATO’s interest on unpaid tax debts, set at 11.51 per cent annually for October to December 2026. The rate equals the 90-day bank bill base rate plus a statutory uplift of 7 percentage points, recalculated each quarter under section 8AAD.
GIC compounds daily, and the 2026 trajectory has run upward each quarter: 10.65, 10.96, 11.43, and now 11.51 per cent. ATO interest now sits at its highest level in a decade.
Daily compounding turns the headline rate into real money fast. A $50,000 tax debt accrues roughly $475 of GIC in 30 days and $1,439 in 90 days. A full year at the current rate adds more than $6,000. The charge keeps running through payment plans and disputes alike. Every month of delay on a remission request has a visible price.
Why Did GIC Remission Become More Valuable From 1 July 2025?
GIC and shortfall interest charge stopped being tax deductible from 1 July 2025, which raised the real cost of ATO interest sharply. A company on a 25 per cent rate previously bore an after-tax GIC cost near 8.6 per cent. The same company now bears the full 11.51 per cent. A top-rate individual previously bore around 6.1 per cent after tax, and now bears the full rate, nearly double the former cost. Our note on the ATO interest deductibility change from 2025 covers the rule itself.
Remission absorbed the role deductions used to play. A dollar of remitted GIC now saves a full dollar, with no tax adjustment clawing part of the saving back. Businesses carrying ATO debt into 2026-27 hold one lever on the interest, and the lever is a properly argued remission request.
What Grounds Support a GIC Remission Request?
Section 8AAG lets the Commissioner remit GIC on three grounds: external circumstances, fair and reasonable treatment, and broader fairness including ATO error. The grounds are set out below:
- Circumstances beyond the taxpayer’s control: natural disasters, serious illness, family breakdown, or the collapse of a major debtor. Reasonable action to limit the delay completes the ground.
- Self-caused delay where remission is fair and reasonable: the taxpayer contributed to the delay, took reasonable corrective action, and special circumstances make full GIC unjust.
- Fairness in all other cases: ATO error or delay, incorrect ATO advice relied on in good faith, or serious financial hardship. Payment of the interest itself causing real detriment defines the hardship limb.
The ground chosen shapes the whole request. A flood or a hospital admission argues causation with dates and documents. ATO delay argues from the ATO’s own correspondence timeline. Hardship argues from financial statements. A request citing every ground at once usually proves none of them.
How Do You Lodge a GIC Remission Request?
A GIC remission request is lodged in writing through ATO online services, through a registered tax agent, or by letter. Small amounts sometimes resolve on a phone call, and anything material deserves a written case. The elements we include in every remission request are listed below:
- The debt and the GIC amount, identified by account and period, so the decision maker sees the exact figure in play.
- The cause of the delay, stated plainly with dates and evidence attached.
- The actions taken: lodgements brought up to date, payments made, a payment plan entered and honoured.
- The remission ground relied on, matched to section 8AAG language.
- The requested outcome: full remission, partial remission, or remission for a defined period.
Payment conduct sells the request. A taxpayer who lodged on time, paid what was possible, and communicated early reads as someone the circumstances overran. A taxpayer who went silent for a year reads differently, whatever the circumstances were.
What Evidence Persuades the ATO to Remit GIC?
Evidence of cause, evidence of action, and evidence of conduct decide GIC remission requests. The ATO has pushed a firmer collection posture since the pandemic debt book grew, and bare assertions now achieve little. Cause evidence means hospital records, insurance claims, liquidation notices from a major customer, or disaster declarations covering the business location.
Action evidence means bank statements showing payments, correspondence showing early contact, and a payment plan in good standing. Conduct evidence means a lodgement history the decision maker verifies in minutes.
Partial remission deserves more use than most requests give. The strongest case often covers a defined window. Examples include the months a business sat flooded, the period an ATO error delayed an assessment, or the stretch a debtor’s collapse froze cash flow. A request for the whole balance invites refusal where a dated window invites agreement.
What Happens After a GIC Remission Decision?
A refused GIC remission request carries no objection rights. The follow-up runs through a better request, a complaint, or the dispute on the primary debt. Remission sits in the Commissioner’s discretion, and Part IVC objections do not reach a remission refusal.
A fresh request with new evidence remains open at any time. A complaint, escalating to the Tax Ombudsman, suits cases built on ATO error or delay.
The primary debt follows a different track. A taxpayer disputing the underlying assessment objects against the assessment itself, and interest on a cancelled debt falls away with the debt. Our guide on how to object to an ATO decision covers the deadlines and the grounds. Sequencing matters here: the objection resolves the debt question first, and the remission request then addresses the interest on what survives.
How Does GIC Remission Interact With Payment Plans?
GIC continues to accrue through a payment plan, and remission is commonly addressed at the end of a completed plan. A payment plan stops recovery action, never the interest clock. Businesses often pair the two: a plan to manage the principal, and a remission request on the interest. The request lands up front on strong grounds, or on completion as recognition of honoured terms.
A completed plan with every instalment paid on time is itself persuasive conduct evidence. The conditions the ATO applies to plans, including the up-front component, sit in our guide to ATO payment plans for small businesses. A plan entered early and honoured fully positions the remission request before a word of the request is written.
What Alternatives Exist Beyond GIC Remission?
Refinancing the debt, restructuring the business, and formal insolvency options all sit alongside remission for heavy ATO debt. Commercial lending below 11.51 per cent beats accruing GIC, and interest on a loan to pay a business tax debt follows its own deductibility analysis.
Larger debts sometimes justify the formal options: restructuring plans and other arrangements that compromise the debt itself rather than the interest alone. Our breakdown of ATO debt options beyond payment plans compares the pathways. Remission remains the cheapest lever on the list, because a successful request costs a letter and removes pure interest.
What Mistakes Sink GIC Remission Requests?
Vague causes, silent delay, and requests lodged before the lodgement record is clean sink most GIC remission attempts. The common failures are listed below:
- Asserting hardship without documents. Financial statements, not adjectives, establish hardship.
- Requesting remission while returns sit outstanding. An incomplete lodgement record undercuts every ground.
- Blaming circumstances while showing no action. Section 8AAG grounds pair cause with reasonable steps taken.
- Asking for everything. A dated partial request matched to the disruption succeeds where a blanket request fails.
- Treating refusal as final. New evidence supports a fresh request, and ATO error supports a complaint.
Frequently Asked Questions
What is the current ATO general interest charge rate?
The GIC rate for October to December 2026 is 11.51 per cent annually, compounding daily. The rate resets each quarter at the 90-day bank bill rate plus 7 percentage points.
Is ATO interest still tax deductible?
GIC and shortfall interest charge are not deductible for income years starting on or after 1 July 2025. Remission is now the only relief on ATO interest.
What reasons does the ATO accept for remitting interest?
Circumstances beyond the taxpayer’s control, fair and reasonable cases of self-caused delay, and ATO error or serious hardship support remission. Evidence of cause and reasonable action decides each ground.
How is a GIC remission request lodged?
Requests are lodged in writing through ATO online services, a registered tax agent, or by letter. Material amounts deserve a written case with documents attached.
Does a payment plan stop GIC from accruing?
GIC accrues through every payment plan. A completed plan strengthens a remission request made at the end, because honoured terms prove conduct.
Can a refused remission request be appealed?
No objection rights attach to a GIC remission refusal. A fresh request with new evidence, a complaint, or the Tax Ombudsman are the follow-up paths.
What Is the Next Step on a GIC Remission Request?
Interest compounds while requests wait, so the remission case is worth building now rather than after the debt grows. Book your free 30-minute strategy session with one of our directors. We assess the ground, assemble the evidence, and sequence the request around any payment plan or dispute. Blackwattle Tax helps Australian businesses cut the cost of ATO debt with specialist, director-level attention.
Schedule a FREE 30-minute consultation today to discover how we can help you make strategic decisions and streamline your business operations.
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Disclaimer: We endeavour to make sure the information provided in this guidance is up to date and accurate. Please note, that the information is only intended to be a guide, with a general overview of information. This guidance is not a comprehensive document and should not be interpreted as legal advice or tax advice. The information is general in nature. You should seek the assistance of a professional opinion for any legal and tax issues related to your personal circumstances.