State Revenue Office – The point at which interest is applied to duties transactions.

At a recent meeting between the Law Society of Tasmania and the State Revenue Office (SRO), the SRO clarified how interest is applied to unpaid duties transactions.

Section 15 of the Duties Act 2001 states that a tax default does not occur for the purposes of the Taxation Administration Act 1997 if duty is paid within 3 months after the liability to pay the duty arises.

In developing Client View and the associated upgrade of TRO, the SRO was aware that its previous practice of issuing an assessment notice (and providing 14 days to pay the assessment before interest was charged), had produced an inequitable situation when the 14-day period exceeded the three-month period after the dutiable transaction.

There was evidence that some transactions were not being submitted for assessment to the SRO until around day 89 after the dutiable transaction had occurred. As a result, the taxpayer was effectively gaining a further minimum two-week interest-free period before payment of duty was required to be made.

To ensure consistency and equity for all taxpayers, and in compliance with the legislation, the upgraded SRO systems now charge interest on any unpaid assessment from day 91 onwards, irrespective of when the transaction was lodged for assessment.

Where a TRO Agent wishes to limit or remove any interest that may be applicable, they are able to make an interim payment of estimated duty when lodging the transaction.

This payment of duty can be made using TRO, and the SRO has published TRO User Factsheet series No 19 setting out how to make those payments.

28 August 2020