GIC remission: how to ask the ATO to remove interest on your tax debt

What is GIC, and why does remission matter now?

The general interest charge is the interest the ATO adds to overdue tax. It’s worked out daily on a compounding basis, and the ATO resets the rate every quarter. On a large or long-running debt, GIC can become a meaningful share of what you owe.

Two recent changes make remission more relevant than it used to be:

• GIC incurred from 1 July 2025 is no longer tax deductible. Every dollar of interest now costs more after tax. See ATO interest is no longer deductible.
• The Tax Ombudsman reviewed how the ATO handles remission. The review, published in March 2026, examined inconsistent decisions; the ATO accepted all ten of its recommendations and has introduced new forms and a dedicated team for larger requests.

When will the ATO consider remitting GIC?

The ATO says it may remit GIC if there are extenuating circumstances. In practice, the strongest requests show that:

• the delay was caused by something outside your control — serious illness, a natural disaster, the sudden insolvency of a major customer, a bank error;
• you acted reasonably once the problem arose — you lodged on time, contacted the ATO, set up a plan;
• the interest would be unfair or unreasonable to keep in the circumstances.

The ATO’s own example pages describe cases such as a sole trader whose relocation costs prevented timely BAS payments receiving full GIC remission. Outcomes depend entirely on individual facts.

How do you make a request in 2026?

Step	Detail
Get the form	Download the ATO GIC remission application form — it must be submitted in Excel format
Choose how to lodge	Online services secure mail (businesses and sole traders), practice mail (agents), phone for general requests, or post
Include everything	The ATO says it’s important to include any circumstances you want considered in your request
Attach evidence	Medical certificates, letters from professionals, financial statements, court or police documents, disaster evidence
Expect escalation for larger amounts	Requests about interest or penalties over $2,500 go to a dedicated team rather than being decided on the phone

A registered tax agent can prepare and lodge the request for you. If you pay someone else to do it, check that they’re registered with the Tax Practitioners Board.

What should the request say?

Keep it factual and complete:

1. The accounts and periods the interest relates to.
2. What happened — dates, events, and how they affected your ability to pay.
3. What you did about it — lodgements, contact with the ATO, payment arrangements.
4. Why remission is fair — in plain words.
5. Evidence for each point.

Leaving something out is the most common mistake. Because the ATO asks you to include every circumstance you want considered, a missing detail may not be taken into account later.

Should you wait for a decision before dealing with the debt?

Usually not. GIC keeps accruing while the request is considered, and remission of interest doesn’t stop the tax being due. Firmer action — garnishee notices, director penalty notices, credit reporting — can still happen. A sensible approach is to deal with the debt and pursue remission in parallel:

• set up a payment plan, or
• pay the debt out with funding, and
• ask for remission of the interest already charged.

If remission is granted after you’ve paid, the amount is credited to your account. The ATO has confirmed that remitted GIC incurred from 1 July 2025 doesn’t need to be returned as assessable income.

What are realistic expectations?

Remission is discretionary. Some requests are granted in full, some in part, and some refused. The Ombudsman’s review found decisions had been inconsistent, which is exactly why the new process puts more weight on complete, well-evidenced requests. Treat remission as a worthwhile bonus, not a plan to rely on.

What kinds of circumstances are worth raising?

Every request is judged on its facts, but these are the kinds of circumstances commonly put forward, with the evidence that tends to support them:

Circumstance	Supporting evidence
Serious illness or injury of the owner or a key person	Medical certificates, hospital records, dates
Natural disaster affecting premises or records	Insurance claims, photos, disaster declarations
A major customer’s insolvency	Correspondence from the customer’s administrator or liquidator, invoices
A bank or ATO error	Bank letters, ATO correspondence
Death of a director or family member	Death certificate and timeline
Reliance on incorrect professional advice	A letter from the adviser explaining what happened

Tie each circumstance to specific periods and amounts. “We had a hard year” carries far less weight than “from March to June the sole director was hospitalised; BAS for those quarters was lodged on time by our agent, but payment was delayed until he returned”.

What if your request is refused?

If the ATO refuses remission or remits less than you asked, the decision letter will explain the reasons. Options can include asking for the decision to be reconsidered with additional information, or seeking review through the appropriate channels; your registered tax agent can advise on the right path. If you think the process itself was mishandled, the Inspector-General of Taxation and Taxation Ombudsman handles complaints about the ATO. Meanwhile, keep dealing with the debt itself — interest continues to accrue.

Want the debt dealt with while remission is considered?

If interest is piling up and you’d rather stop it growing while your remission request is assessed, see if you qualify. There’s no credit check to enquire, your details aren’t passed on to a list of lenders, and a real person will talk through whether paying the ATO out now makes sense. Tell us the balance and how much of it is GIC, as accurately as you can.