Phiwpang v Chief Commissioner of State Revenue [2025] NSWCATAD 282;

1. Where tax has been assessed, s 86 of the Taxation Administration Act 1996 (NSW) ("Administration Act"), allows rights of objection to a taxpayer dissatisfied with an assessment. This is an internal review process under which the Chief Commissioner of State Revenue, the Respondent in these proceedings, must consider and determine the objection (s 91 of the Administration Act).
2. A taxpayer who is dissatisfied with the Respondent's determination of an objection, may apply to the Tribunal for an administrative review under the Administrative Decisions Review Act 1997 ("NSW") ("ADR Act") of the decision of the Chief Commissioner of State Revenue the subject of the objection.
3. These circumstances have arisen in the present matter as set out in the background above, so bringing the matter within the jurisdiction of the Tribunal, if what is said to be the assessment in evidence, is a valid assessment.
4. The onus of proving her case lies with the Applicant (s 100(3) of the Administration Act).
5. The Tribunal, dealing with the taxpayer's application, may do one or more of the following under s 101 of the Administration Act:

"(a) confirm or revoke the assessment or other decision to which the application relates,

(b) make an assessment or other decision in place of the assessment or other decision to which the application relates,

(c) make an order for payment to the Chief Commissioner of any amount of tax that is assessed as being payable but has not been paid,

(d) remit the matter to the Chief Commissioner for determination in accordance with its finding or decision,

(e) make any further order as to costs or otherwise as it thinks fit."

1. Surcharge purchaser duty is imposed under Chapter 2A of the Duties Act. It applies to certain "foreign persons" who acquire residential property in New South Wales. That the Applicant was a "foreign person" liable for surcharge purchaser duty was not contested.

1. What is in dispute is the Respondent's assessment of penalty tax and interest. The particular questions for determination are as follows:

(1) Whether the assessment in issue is valid?

(2) Whether there was a breach of an information protection principle and if so, what are the consequences?

(3) If the assessment is valid, whether penalty tax was correctly assessed?

(4) If the assessment is valid, whether the interest was correctly assessed?

1. An "assessment" that satisfies the statutory scheme under the Administration Act is required for the Tribunal to have jurisdiction to hear and determine the Applicant's application for administrative review in this matter. This is because the Tribunal's ability to hear and determine the matter depends on an "assessment" within the meaning of the Administration Act having been made, followed by an objection to that assessment. The Tribunal, on review, may confirm or revoke the relevant "assessment". Absent an "assessment" within the meaning of the Administration Act that sets the objection and appeal process in motion, no jurisdiction arises.
2. While the liability to duty (including surcharge purchaser duty) does not itself depend on an assessment being made but arises under the Duties Act, an "assessment" is required to enliven the Tribunal's jurisdiction for the reasons set out at [25] above.
3. In the case of penalty tax and interest, however, the scheme for ascertaining the amount payable by the Applicant, involved the Respondent's exercise of certain discretionary powers of remission considered below. In these circumstances, the amount payable by the Applicant could not have been known until the Respondent, having considered whether to exercise those powers, had assessed the amount of penalty tax and interest. In the case of penalty tax and interest, therefore, on the facts at hand, both the amount of the liability to penalty tax and interest as well as the taxpayer's rights of objection and appeal, both depend on the making of an "assessment" within the meaning of the Administration Act.
4. The scheme for the making of assessments is set out in the Administration Act. The Respondent has a power to make an assessment under Part 3 of the Administration Act. Section 8 within Part 3 says that the "Chief Commissioner may make an assessment of the tax liability of a taxpayer".
5. What is an "assessment" in turn is defined in s 3, relevantly, to include "an assessment made by the Chief Commissioner under Part 3 of the tax liability of a person under a taxation law". This is a definition that requires consideration of what is an "assessment" in its ordinary or technical sense, within the statutory context in which the word appears.
6. What the Administration Act requires an assessment to show when the taxpayer is notified of the assessment, bears relevance in determining what an "assessment" is. These provisions form part of the statutory context establishing what a properly constituted assessment must do. What a notice of assessment must contain is set out in s 14. It must show the "amount of the assessment". Section 15 additionally requires that the notice specify any interest and penalty tax payable by the taxpayer under Part 5 or s 95 in respect of the default. The statutory context indicates that an assessment must at least determine how much tax has been assessed and also the interest and penalty tax assessed.
7. I am of the opinion that an assessment needs to do more. Penalty tax and interest (or any other tax) do not exist in abstraction. Someone has to pay it. The assessment needs to identify who this is. An "assessment" is of "the tax liability of a taxpayer" (s 8 of the Administration Act) (emphasis added). Section 15 requires notice of an assessment of "a taxpayer's tax liability" and specify interest and penalty tax payable "by the taxpayer" (emphasis added). Unless an assessment identifies who must pay, it will fail in its purpose of assessing the tax payable "by the taxpayer".
8. In the case of surcharge purchaser duty, transferees who are "foreign persons" are liable to pay surcharge purchaser duty (Duties Act, s 104R). Only the "foreign person" is liable (s 104R(2)). Where a tax default occurs as a result of a failure by the taxpayer to pay surcharge purchaser duty, penalty tax and interest attaches to the same taxpayer. The assessment must identify the person so liable.
9. What is relied upon as an assessment is shown in a notice issued on 16 January 2025. The Respondent, however, questions the reliance that can be placed on the notice on the basis that an "assessment" is distinct from a notice of assessment. I understand the submission of the Respondent to be that what the notice does or does not do should not carry weight in determining whether there was a valid assessment, because it is a matter that is distinct from the assessment itself. The Respondent relies on what the High Court said in R v Deputy Federal Commissioner of Taxation (SA) [1926] HCA 3; (1926) 37 CLR 368.
10. Isaacs J in this case said:

"An "assessment" is not a piece of paper: it is an official act or operation; it is the Commissioner's ascertainment, on consideration of all relevant circumstances, including sometimes his own opinion, of the amount of tax chargeable to a given taxpayer. When he has completed his ascertainment of the amount, he sends by post a notification thereof called "a notice of assessment." And then, says the Act (sec. 54), "

1. While it is correct to say that an assessment itself and notice of the assessment are different things, the notice in evidence is the only relevant evidence of the assessment that preceded the notice. As such, the notice of assessment has evidentiary value in identifying whether there has been a properly constituted assessment. In addition, for the reasons given at [30] above, the provisions of the Administration Act dealing with notices of assessment remain relevant in revealing the statutory intention, as to what an assessment must do. For these reasons, the contents of the notice of assessment that is in evidence remain relevant to the determination of whether a valid assessment has been made.
2. The notice shows the amount of the assessment. It also shows a due date for payment. However, unless the assessment so notified, also identifies who is liable, I do not think that a properly constituted "assessment" will have been made for the reasons set out at [31] and [32] above.
3. The person liable in the present case was the Applicant only. Her husband did not share that liability whether jointly or severally for the reasons set out at [32] above. The notice of assessment in evidence, however, was addressed both to the Applicant and also to her husband. It then went on to describe the Applicant alone as the person liable for purchaser surcharge duty. Further, although addressed to the Applicant and her husband, the email address to which the notice of assessment went was that of the Applicant only.
4. The addressing of the notice of assessment to both the Applicant and her husband leaves some doubt as to who was assessed as the taxpayer. It leaves a question as to whether the notice says that the Applicant alone was liable or if her husband also bore some kind of liability for tax, whether primary or secondary. The Respondent did not explain why the notice of assessment was also addressed to the husband, other than to say that the Respondent used the "most recent contact details" it had.
5. Despite the lack of clarity in the notice of assessment as to who was liable, I find on balance, that the assessment in question satisfies the requirements of the Administration Act. It identifies the amounts payable as interest and penalties and describes the Applicant as the party "liable", even if the notice was addressed to both the Applicant and her husband. Further, the Applicant alone commenced these proceedings as the party liable, despite the notice having been addressed also to her husband. I infer from her doing so, that she understood she was the party liable.
6. Section 16 of the Administration Act says that the "validity of an assessment is not affected because a provision of a taxation law has not been complied with". Having found that the notice of assessment in evidence satisfies the requirements of the Administration Act notwithstanding elements of uncertainty, I do not need to consider whether the curative power of s 16 has work to do in the circumstances at hand, to maintain the validity of the notice of assessment in issue.
7. Having decided that the assessment in evidence meets the requirements of the Administration Act, despite some uncertainty as to the proper identification of the party liable as taxpayer, I find that the Tribunal has jurisdiction to hear the Applicant's application for administrative review.

Was there a breach of an information protection principle?

1. The second matter for determination was whether the Respondent had disclosed to the Applicant's then separated husband, the amount of a tax liability to which the Applicant had been assessed and as a result, breached an information protection principle under the Privacy and Personal Information Protection Act 1998 (NSW). Whether such a breach could amount to conduct on the part of the Respondent that had a bearing on the assessment of penalties and interest was a further question.
2. The evidence was that despite the addressing of the notice of assessment both to the Applicant and her husband, the Respondent had sent the notice by email only to the Applicant at her nominated email address. There is no evidence that the email also went to the Applicant's husband. In these circumstances, there is no evidence of a breach of an information protection principle by reason of disclosure in a manner contrary to an information protection principle. I do not in these circumstances need to consider the matter further.

1. Provisions dealing with penalty tax are set out in the Administration Act. Section 27(1) of the Administration Act prescribes the rate of penalty tax. It provides as follows:

"27 Amount of penalty tax

(1) The amount of penalty payable for a tax default is, subject to this Division -

(a) 25% of the amount of tax unpaid, or

(b) if the taxpayer is a significant global entity within the meaning of the Income Tax Assessment Act 1997 of the Commonwealth - 50% of the amount of tax unpaid".

1. Penalty tax is assessable at the default rate of 25%. Sections 27(2) and (3), 28, 29 and 30 provide for certain circumstances where the default rate of penalty tax of 25% set out in s 27(1) can be reduced or increased, depending on the application of various considerations set out in those provisions. The actual rate at which penalty tax was assessed was 20% following such a reduction.
2. If the taxpayer (or a person acting on behalf of the taxpayer) took reasonable care to comply with a taxation law, s 27(3)(a) allows for a determination that no penalty tax applies. Grounds for such a determination may also arise if a tax default occurred solely because of circumstances beyond the taxpayer's control (s 27(3)(b)).
3. Section 33 makes further provision for the remission of penalty tax. Section 33, as it applies from 1 February 2024, provides as follows:

"33 Remission of penalty tax

(1) The Chief Commissioner may, in such circumstances as the Chief Commissioner considers appropriate, remit penalty tax by any amount.

(2) The imposition or remission of interest is not relevant to the imposition or remission of penalty tax".

1. The Respondent justifies the assessments of penalty tax at the rate of 20% on the basis that, in his submission, the tax default in question occurred because the Applicant did not take reasonable care. He also says that the tax default did not occur because of circumstances outside the control of the Applicant. The Applicant disagrees with these submissions.
2. The rate of 20% at which penalty tax was assessed represents a reduction of the rate of 25% otherwise applicable. The Respondent said that he made the reduction in recognition of the Applicant's conduct after the Respondent's investigation commenced.

1. The first question for determination relevant to penalty tax is whether the Applicant took reasonable care in dealing with her obligation to pay surcharge purchaser duty. Where reasonable care has been taken, s 27(3)(a) of the Administration Act may allow for a determination that penalty tax is not payable. It provides as follows:

"(3) The Chief Commissioner may determine that no penalty tax is payable in respect of a tax default if the Chief Commissioner is satisfied that -

(a) the taxpayer (or a person acting on behalf of the taxpayer) took reasonable care to comply with the taxation law".

1. What is "reasonable care" to comply with taxation obligations has been described as follows in Qualweld Australia Pty Ltd v Chief Commissioner of State Revenue [2014] NSWCATAD 227, following RVO Enterprises Pty Ltd ATF the R M O'Mara Family Trust v Chief Commissioner of State Revenue [2004] NSWADT 64, at [95]:

"In each case, it is essentially a question of fact whether the taxpayer has taken reasonable care in attending to its tax obligations. Factors that would indicate that a taxpayer took reasonable care include reasonable attempts to comply with the tax law, reasonable professional and other enquiries to ensure compliance, reliance on professional advice or on official published views of the tax law. Factors which indicate that a taxpayer failed to take reasonable care include oversight or forgetfulness to meet with obligations, failure to maintain adequate records and procedures to prevent errors from occurring, not seeking professional advice and errors in complying with the law."

1. The Applicant in the present case received advice from her husband and a professional advisor before settlement of the contract in issue. The Applicant says that she did not know of her liability for surcharge purchaser duty, having relied on her husband and professional advisor to advise her. She also says she has limited English language skills. The Applicant relies on the above matters to claim that penalty tax should not have been assessed.
2. The Respondent submits that the mere fact of having engaged a professional advisor was not of itself sufficient to establish reasonable care. The Respondent says that s 27(3)(a) expressly requires consideration of whether either the taxpayer or a "person acting on behalf of the taxpayer" took reasonable care to comply with a taxation law.
3. There was no evidence before the Tribunal of the terms of the advice the professional advisor provided and whether it had been acted upon or not. The consequence is that there is insufficient evidence to determine whether the circumstances surrounding the use of a professional adviser shows that the Applicant took reasonable care.
4. I do not draw any adverse inferences against the Applicant by reason of the Applicant not leading evidence as to what advice she received and whether or not she acted upon that advice. However, in the absence of that evidence, I cannot be satisfied, on the balance of probabilities, that the Applicant took reasonable care.
5. The Applicant believed that wrong information about her visa status may have been provided to the professional advisor acting for her. Even if this were the case, these are not circumstances that assist the Applicant's claim that she or a person acting on her behalf had taken reasonable care.
6. The Applicant also says that she acted in good faith upon becoming aware of the liability to surcharge purchaser duty. The Applicant says that there was no deliberate evasion or concealment on her part. She further says that she has limited income and the penalty tax an interest assessed would cause her serious financial hardship.
7. I accept the Applicant's evidence as to her good faith and conduct. However, these are not matters that assist the Tribunal in determining whether or not at the time the tax default arose or thereafter, she took reasonable care. The Applicant's good faith and conduct, including cooperation with the Respondent after she knew of her liability for surcharge purchaser duty, do not prevent a finding, that the Applicant has failed to show, on the balance of probabilities, that she or a person acting on her behalf took reasonable care.

Was the tax default beyond the control of the Applicant?

1. The second question for consideration by the Tribunal is whether circumstances outside the control of the Applicant resulted in the relevant tax default. Section 27(3)(b) of the Administration Act may, in this case, allow for a determination that no penalty tax is payable. It provides as follows:

"(3) The Chief Commissioner may determine that no penalty tax is payable in respect of a tax default if the Chief Commissioner is satisfied that -

..........

(b) the tax default occurred solely because of circumstances beyond the taxpayer's control (or if a person acted on behalf of the taxpayer, because of circumstances beyond either the person's or the taxpayer's control) but not amounting to financial incapacity".

1. Section 27(3)(b) applies only where the relevant tax default occurs "solely" because of circumstances beyond the taxpayer's control. A similar provision fell for consideration in Commissioner for ACT Revenue v G Kalsbeek Pty Ltd [2015] ACAT 90. The ACT Administrative Tribunal said, at [35]:

"In order for the provisions of section 31(6)(b) to operate to avoid penalty tax, the cause of that failure to pay tax must first be identified. An outcome (the failure to pay tax) may have several causes, depending on the length of time of the obligation. This appeal tribunal must then be satisfied that the identified cause (or causes, where there are more than one) is the 'sole' cause of the failure. Unless all of the causes of the failure are identified and (in the case of a single cause), it is beyond the taxpayers control, or (in the case of multiple causes), all are beyond the taxpayers control the relief under section 31(6)(b) is not available. This necessarily involves consideration of all of the factors which the evidence shows contributed to the issue of the failure to pay payroll tax".

1. The Tribunal in Continuum Recruitment Pty Ltd v Chief Commissioner of State Revenue [2024] NSWCATAD 38, in considering whether medical problems and workload issues "solely" caused a tax default, said, at [52]:

"While the Tribunal accepts Mr Doyle's evidence that his daughters suffered from a medical condition which placed financial and emotional strain on the family, there is no evidence as to the nature or timing of their illnesses or how this impacted Mr Doyle's ability to comply with the Applicant's obligations. Nor is there any evidence as to the nature or extent of Mr Doyle's own illness or how that may have affected his ability to meet his obligations. On the state of the evidence the Tribunal simply cannot be satisfied that these factors together with Mr Doyle's increased workload as a result of the pandemic, which the Tribunal accepts were circumstances beyond the Applicant's control, solely caused the Applicant's tax default. By Mr Doyle's admission, he "wrongly prioritised" his obligations and should have engaged someone to assist the Applicant meet its obligations. As the ACT Civil and Administrative Tribunal said in Commissioner for ACT Revenue v G Kalsbeek Pty Ltd [2015] ACAT 90 at [42], factors such as those are clearly part of the cause for the Applicant's failure to comply with its obligations and cannot be regarded as being beyond the control of the Applicant though its director".

1. There is no evidence to indicate that the Applicant's tax default occurred solely because of matters beyond her control. Her claims of financial hardship are not sufficient to ground a claim that the non-payment of surcharge purchaser duty occurred because of matters beyond her control. Nor is there evidence to indicate that there were other matters beyond her control, such as illness or external events preventing compliance, explaining her tax default.
2. The Applicant says that the time it took for her visa status to change was outside of her control. The Applicant's visa status may have been relevant in determining whether or not she had a tax liability. However, the question is not whether the circumstances giving rise to her tax liability were beyond her control but once that liability had arisen (which was not contested), whether the circumstances of the Applicant's tax default were beyond her control.
3. For the above reasons, I cannot be satisfied that the Applicant's tax default occurred solely (or otherwise) because of circumstances beyond her control. Accordingly, I do not see any basis for a determination under s 27(3)(b) that no penalty tax is payable.

1. Section 33 of the Administration Act contains a broad discretion to remit penalty tax. The discretion allowed under that provision is not subject to the limits set out in s 27 (Chief Commissioner of State Revenue v Downer EDI Engineering Pty Ltd [2020] NSWCA 126). Nevertheless, that discretion cannot be exercised in a way that defeats the fundamental legislative objectives of the penalty scheme. Ward CJ in Equity (as she then was) has said that except in "special circumstances", the general discretion under s 33 should not be exercised beyond the limits in ss 27(3) and 29 when the circumstances giving rise to a remission under s 27(3) of the Administration Act have not been made out (Bayton Cleaning Co Pty Ltd v Chief Commissioner of State Revenue [2019] NSWSC 657, at [301]).
2. The Respondent's submission was that there were no special circumstances warranting a remission of the penalty tax. Where the Applicant had not taken reasonable care and had not provided any valid basis for failing to comply with the obligations to inform the Respondent, the Respondent's submission was that it would not be consistent with the objective of the penalty regime in the Administration Act for penalty tax to be remitted.
3. I am in agreement with the Respondent's submission that in the absence of reasonable care having been taken and the absence of matters beyond the control of the Applicant explaining her tax default, there are no special circumstances shown in the evidence to warrant a reduction in penalty tax.

1. The rate at which penalty tax has been assessed is 20%. This is less than the default rate of 25% set out in s 27 of the Administration Act. That rate can be varied upwards or downwards in particular circumstances. Where disclosure of a tax default has been made before commencement of an investigation, this is a circumstance where a reduction in the rate of penalty tax can be made.
2. The Respondent reduced the default rate of 25% to 20% because of the Applicant's cooperation with the Respondent. After the Respondent's investigation commenced, she made voluntary disclosure. I agree that the reduction made is appropriate.

1. The Respondent can assess interest at both the market rate and the premium rate (s 21 and 22 of the Administration Act). The assessment made included interest calculated at both rates.
2. The Respondent, however, has certain statutory powers to remit interest (s 25 of the Administration Act). That power is discretionary. The Chief Commissioner may issue guidelines setting out how interest must be remitted. If guidelines are issued, interest must be remitted only in accordance with the guidelines.
3. Section 25 in its current form came into effect on 1 February 2024. The provisions allowing for the use of guidelines for remittal of interest took effect from that date. Guidelines have been issued with effect from 1 July 2025 as set out in "TAA 001: Remission of Interest Guidelines", but do not apply in the present case because the objection in this matter pre-dates the commencement date of 1 July 2025.
4. The Respondent sets out in Practice Note CPN 024 his earlier guidelines as to how he will exercise his powers of remission. These guidelines were issued in June 2022. Relevantly, they provide as follows:

"When a tax default occurs, interest is calculated on the amount of unpaid tax calculated on a daily basis from the end of the last day for payment until the day it is paid.

The Chief Commissioner may remit the market rate component or the premium component of interest, or both, by any amount depending on the circumstances affecting the tax default. Where the remission of interest is warranted, the amount remitted will, generally, be either both the premium and market rate or the premium rate only.

........

Circumstances outside the control of a taxpayer

Where there is evidence that the default was outside the control of the taxpayer (or their representative), the Chief Commissioner may remit interest. Events over which a taxpayer has no control include but are not limited to:

a. natural disasters such as fire or flood

b. computer system breakdowns including third party systems such as electronic funds transfer systems

c. illness or death of a principal taxpayer

d. Revenue NSW fault affecting receipt of payment, including processing problems

e. circumstances where it is impossible to lodge or pay on time (excluding financial incapacity including hardship).

In cases of financial incapacity, taxpayers may apply for relief in the form of an extension of time to pay, including an instalment arrangement.

Reasonable care taken by the taxpayer

Where there is sufficient evidence to prove that the default was within the control of the taxpayer (or their representative), but reasonable care has been taken to ensure the payment of the tax, the Chief Commissioner will usually remit the premium rate component of the interest. Events that may indicate that the taxpayer took reasonable care include (but are not limited to):

a. being honest and forthright when dealing with the Chief Commissioner

b. cooperation with the Chief Commissioner

c. the default is attributable to calculation errors

d. making diligent efforts to understand and comply with the law

e. maintaining appropriate and proper recording systems in accordance with normal practice i.e., systems that minimise the risk of tax default, allow reconciliation of the tax paid or payable with returns required to be lodged and fulfil the taxpayer's obligation under the taxation laws to maintain records for the purposes of Revenue NSW investigations or audits

f. taking reasonable steps to be aware of and comply with his/her taxation obligations and to be familiar with the legislative requirements

g. applying any relevant revenue rulings in good faith

h. seeking professional advice or private rulings for uncertain or complex matters where no revenue ruling applies, or where circumstances differ from those described in a revenue ruling

i. acting promptly to seek advice or provide information once made aware, from any source, that the taxpayer might have a tax liability

j. the taxpayer has used and reasonably relied on data, statements or other information provided by a third party.

Meeting one or more of these examples does not necessarily mean that reasonable care has been taken; all relevant factors leading to the tax default will be taken into consideration.

Note: Remission of the premium rate will only occur in special circumstances".

1. Bathurst CJ in Chief Commissioner of State Revenue v Downer EDI Engineering Pty Ltd [2020] NSWCA 126 considered the reach of the power in s 25 of the Administration Act to remit interest. His Honour did not think there was a relevant limit on the power of the Respondent to remit interest in s 25 of the Administration Act.
2. Each of the components of interest assessed, however, requires specific consideration. Those components are made up of interest assessed at the market rate and interest assessed at the premium rate.
3. The rationale for the market rate of interest is described as follows in Chief Commissioner of State Revenue v Incise Technologies Pty Ltd & Anor (RD) [2004] NSWADTAP 19 and why it should be waived only rarely. The Administrative Decisions Tribunal said, at [60]:

"In our view the primary interest rate (the market rate component) is intended to compensate the Commissioner (on behalf of the Government of New South Wales) for not having the benefit of the tax payment from the time it was due. So a rate is set which fluctuates, and is connected to an external rate, the Reserve Bank's Accepted Bill rate. This, as we see it, is a component that could rarely, if ever, be waived as otherwise tax would be paid at a devalued amount thereby discriminating against taxpayers who meet their obligations on time. The Tribunal made the observation at [50] that to justify any remission of the market rate component of interest, it would be necessary to show that in some way the Commissioner contributed to the default. We agree with this observation".

1. The Respondent, in CPN 024, contemplates that where the circumstances of non-payment were outside the control of the taxpayer, remission of interest assessed at the market rate may be justified. The initial question is whether the relevant tax default arose as a result of circumstances outside the control of the Applicant. I have found that the tax default in issue did not occur as a result of circumstances outside the control of the Applicant, whether solely due to such circumstances or otherwise, for the reasons set out at [62]- [64] above. Further, there was nothing in the evidence to show that factors of the kind described at [73] above or other factors outside the control of the Applicant resulted in the tax default in issue.
2. The Tribunal in Incise Technologies laid emphasis on fault on the part of the Respondent as grounds for remission. This was a factor that was also found to be of relevance in Trust Co. of Australia v Chief Commissioner of State Revenue [2002] NSWADT 21, at [27].
3. It is well accepted that interest at the market rate should rarely if ever be waived, because to do so would be to devalue the amount of tax payable. I see no reason to depart from this principle in the present case in light of the matters set out above, in particular because the tax default did not occur as a result of circumstances outside the Applicant's control, whether solely as a result of such circumstances or otherwise and because of the absence of fault on the part of the Respondent. I am unable to identify any other grounds for the remission of the market rate of interest. It follows that the assessment of interest at the market rate is affirmed.
4. The purpose of the premium rate of interest differs from that of the market rate of interest. While the market rate compensates the Respondent for the time value of money that is paid late, the premium rate of interest extracts from the taxpayer something more. It is in the nature of a penalty (Southern Cross Community Health Care Pty Ltd v Chief Commissioner of State Revenue [2021] NSWSC 1317, at [443], per Emmett AJA). That difference informs the varying approaches to remission of each kind of interest. While remission of interest assessed at the market rate should be rare, the circumstances in which interest assessed at the premium rate can be remitted are not as restrictive.
5. There is no express requirement in s 25 for considerations of "reasonable care" to be taken into account in determining whether to remit interest (unlike in the case of s 27 applying to the remission of penalties as discussed above). The Respondent's guidelines, however, state that "taking reasonable steps to be aware of and comply with his/her taxation obligations and to be familiar with the legislative requirements" will be a matter that goes to whether remission should be made.
6. That taking reasonable care is a consideration in determining whether or not interest at the premium rate should be assessed, alongside various other considerations, is well accepted (Golden Age and Hannas the Rocks Pty Ltd v Chief Commissioner of State Revenue [2024] NSWSC 249, at [106]).
7. The question of whether the premium component of interest should be remitted, however, is not limited to considerations of whether or not a taxpayer has taken reasonable care. In Wan v Chief Commissioner of State Revenue [2025] NSWCATAP 54, the Appeal Panel said, at [81] - [82]:

"Factors such as whether a taxpayer took reasonable care or whether there were exceptional circumstances are not irrelevant and the Tribunal was entitled to place great weight on them. Nevertheless, remission of interest is not an "all or nothing" exercise. Further, the degree of a taxpayer's culpability is material. An assessment of the appellant's culpability is not limited to whether he took reasonable care or whether there were exceptional circumstances.

It follows that by asking only whether there was reasonable care or exceptional circumstances and not asking whether there were any personal circumstances of the appellant apparent from the materials before it, relevant to establishing the degree of culpability other than the failure to meet his statutory obligations that may warrant remission, the Tribunal asked the wrong question".

1. The Court of Appeal in Chief Commissioner of State Revenue v Uber Australia Pty Ltd [2025] NSWCA 17, at [397] set out the following factors that may be relevant to a decision under s 25 whether or not to remit some or all of the interest otherwise liable to be paid, namely whether:

"(1) all principal tax that has been assessed and is not in dispute has been paid in full;

(2) there has been timely cooperation by the taxpayer in providing relevant information so as to enable the Chief Commissioner to issue assessments;

(3) there has been no wilful default by the taxpayer in not paying tax on time;

(4) the taxpayer took reasonable care in relation to complying with its tax obligations; and

(5) the taxpayer acted reasonably in all the circumstances, including in light of any explanation offered for why the default occurred".

1. The Court of Appeal went on to say that these "factors are not exhaustive. Nor are they tick-a-box requirements, where the taxpayer must necessarily establish all of them in order to benefit from a favourable exercise of the power. Section 25 grants a broad discretion to be exercised in light of all the circumstances" (at [398]).
2. The Applicant did not pay the amount of surcharge purchaser duty assessed by the due date. However, the conduct of the Applicant, once she became aware of her liability, is a matter that is relevant to assessing the Applicant's claim for remission of interest assessed at the premium rate. She cooperated with the Respondent and negotiated a payment plan.
3. However, she did not take reasonable care for the reasons set out at [54] - [58] above. Nor did the tax default in question occur for reasons outside of her control for the reasons given at [62] - [64] above. These are not matters that assist the Applicant's claim for remission of interest assessed at the premium rate.
4. There are, however, certain personal circumstances favouring the Applicant. As a person without the language skills to deal personally with compliance, I do not think that there was unreasonableness on the part of the Applicant in relying on her husband and a professional adviser in seeking to achieve compliance with her obligations.
5. The running of premium interest over a period of nearly 4 years is also a matter of relevance, having regard to the time the Respondent's investigation took. In Griglio v Chief Commissioner of State Revenue [2024] NSWCATAD 212, I considered a case where the taxpayer's advisors had provided wrong information about his visa status resulting in surcharge purchaser duty not being assessed until some years later. I said:

"The Respondent submits that the cause of delay was wrong information being provided by the Applicant. I accept that this was the cause of an assessment of duty that wrongly excluded surcharge purchaser duty. However, delays that subsequently ensued in investigating the matter and reaching an assessment were, in my opinion, within the control of the Respondent and not the Applicant. While the Respondent may need time to carry out his duties to collect tax and may be compensated for the time cost of late payment through an assessment of interest at the market rate, I do not think that the Applicant should bear the entire costs arising from delays over which it has no control".

1. I think that this is a case that bears some similarity to the circumstances in Griglio. In that case, premium interest was reduced by half. However, unlike in Griglio, the advisors in the present case have provided no evidence explaining the mistake made as to how and why they came to use wrong information about the taxpayer's visa status. In the absence of such an explanation, I do not think that reduction of the premium interest in the same proportion as in Griglio is warranted.
2. However, I think that the matters set out at [88] are relevant "personal circumstances" that together with the delays described at [89], warrant a remission of 25% of the interest assessed at the premium rate.

1. The Applicant claimed financial hardship. The Tribunal does not have jurisdiction to determine the matter on the basis of hardship (Loomes v Chief Commissioner of State Revenue [2014] NSWCATAD 133). Division 5 of Part 10 of the Administration Act establishes and empowers a Hardship Review Board to deal with cases in which the exaction of the full amount of tax would result in serious hardship for the person or the person's dependants. The remaining avenue available to the Applicant would therefore be an application to the Hardship Review Board.

(1) The amount of penalty tax assessed should stand.

(2) The interest assessed at the market rate should stand.

(3) The amount of interest assessed at the premium rate should be remitted by 25%.

(1) The assessment under review is confirmed as to penalty tax and interest at the market rate.

(2) The assessment under review is otherwise remitted to the Respondent for reconsideration in accordance with these reasons.

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.