Chartered Accountants Australia and New Zealand (CA ANZ) welcome changes by the Australian Taxation Office (ATO) on 22 January 2026 to improve the consistency and transparency of interest and failure to lodge (FTL) penalty remission requests.

Key updates include a dedicated ATO team to review remission requests, revised forms for general interest charge (GIC), shortfall interest charge (SIC) and FTL penalty remissions, and new guidance for GIC remissions. Taxpayers can now also resubmit applications if critical information was previously omitted.

These changes respond to widespread member feedback about unclear guidance, inconsistent outcomes and a lack of meaningful feedback on denied requests. Members shared difficulties navigating the remission process and uncertainty when advising clients. The importance of successful GIC remission requests increased after 1 July 2025, when GIC became non-deductible, raising the financial impact for taxpayers. The high cost of appealing decisions further made the process more challenging.

CA ANZ recognised multiple pain points in the GIC remission process. In its 2025/26 Budget submission, CA ANZ called on the government to allow taxpayers to use the ATO objection process to have GIC remission decisions reconsidered. Ahead of the parliamentary debate on the Bill making GIC and SIC non-deductible, CA ANZ made a joint submission to the Cross Bench. Senator David Pocock proposed an amendment to allow small businesses to continue claiming deductions for GIC and SIC, but withdrew it due to time constraints and the need to extend the $20,000 instant asset write-off.

Engagement with the Tax Ombudsman reinforced the need to review GIC remissions, which emerged as the most frequently raised issue. Consequently, the Tax Ombudsman conducted a review of GIC remissions in late 2025, with CA ANZ making a submission highlighting member concerns. The report is expected in early 2026. CA ANZ also made submissions to the Australian National Audit Office’s audit on the ATO’s management of small business taxpayer debt and the ATO’s internal review into taxpayer concessions, again calling for greater transparency and guidance.

Alongside these submissions, CA ANZ held discussions with the ATO to raise member concerns. This allowed CA ANZ to consult on the updated forms and new GIC remission guidance. Member feedback from a Sharing Knowledge session with the Tax Ombudsman was critical in identifying common scenarios needing further guidance. The new guidance now covers situations involving mental health, payment plans and reliance on third-party information.

CA ANZ remains concerned about the increased administrative burden on registered tax agents following the removal of the registered agent phone line option to make a remission request. Registered tax agents must now use the updated forms and submit them through Online Services for Agents (OSfA). CA ANZ and other industry bodies are actively advocating that the ATO adopt drop-down menus in OSfA to classify the reason and evidence for remission requests to help reduce some of this burden. The ATO needs additional time and resourcing to implement this proposal.

The new examples are an improvement on the existing guidance, but more detailed criteria would be beneficial to both ATO officers reviewing remission requests as well as tax agents and taxpayers submitting requests. CA ANZ appreciates member contact that can assist in the refinement of the examples of when GIC remission is and is not provided.

Follow-up feedback from members is also required to confirm they are receiving meaningful feedback on denied requests.

CA ANZ continues to advocate for GIC and SIC remission guidelines to become clearer and for GIC and SIC to become deductible again.

The introduction of a dedicated team to review remission requests is a much needed and welcome change to improve the consistency of remission decisions. 

The outcomes of the Tax Ombudsman, ATO and ANAO reviews are important to further improve the remission process and the ATO’s management of debt