We are responsible for administering state taxes, duties and levies for the Victorian Government.
The Taxation Administration Act 1997 (TAA) provides the framework for administering land tax (including vacant residential land tax), payroll tax, the duty charged on certain transactions, the congestion levy, the wagering and betting tax, and the commercial passenger vehicle service levy, and the growth areas infrastructure contribution (GAIC).
The TAA sets out the framework for assessing, investigating, reviewing and enforcing Victorian taxes as well as the powers, rights and obligations of both taxpayers and the Commissioner of State Revenue. It includes how to object to or appeal if you are dissatisfied with a tax assessment or payroll tax decision.
You can also object to a Back to Work decision.
We are also open to resolving disputes through early and informal negotiations and dispute resolution.
Read more about the matters covered by the TAA:
- Assessments and reassessments
- Returns and special tax return arrangements
- Record keeping and providing information or documents
- Notification requirements
- Secrecy provisions
- Paying tax
- Investigation powers
- Penalty tax
We assess your tax liability based on information available to us. This information may have come from you or your representative, another person or agency from which we have sought particular details, or from other sources that provide relevant details to us.
If we are not in a position to make an exact assessment, we can make an estimated (default) assessment. For example, we may issue a default assessment if a taxpayer does not submit a required return fully and accurately by the due date.
Sometimes, we issue a compromise assessment if the complexity of the matter makes it difficult or impracticable to determine an exact tax liability. A compromise assessment is a binding agreement between you and us as to the amount of tax payable. When a compromise assessment is issued, it can only be reassessed with your agreement, or where the Commissioner finds there has been a deliberate failure to disclose material information. As you have agreed to the compromise assessment, you do not have the right to object to it.
We can make reassessments. For example, this might happen when you give us new information affecting the amount of tax you have been assessed for.
The Commissioner may make a reassessment up to five years after the initial assessment.
There are three circumstances in which we may make a reassessment outside this time limit:
- The reassessment is to adjust tax to give effect to a decision on an objection, review or appeal.
- When the initial assessment or reassessment was made, all the facts and circumstances affecting the tax liability were not fully and truly disclosed to the Commissioner.
- A particular taxation law allows a reassessment to be made outside the time limits.
For some taxes – payroll tax, general insurance duty, livestock duty, congestion levy and the commercial passenger vehicle service levy – liability is calculated on the basis of details provided in returns. Taxpayers need to use the forms provided by us.
A special tax return arrangement allows one taxpayer to lodge returns on behalf of multiple taxpayers.
An example of this is where someone registers to use our electronic lodgement system Duties Online to submit dutiable transactions on behalf of their clients. They enter into a notice of a special tax return arrangement with us and we grant approval for them to use Duties Online in accordance with the terms and conditions of the Notice. For the purposes of this arrangement, they are treated as the agent of the taxpayer(s).
You must keep records of all tax-related matters so that your tax liabilities can be properly assessed.
These records, and any additional records specifically required by us, must be kept for five years unless we expressly permit them to be destroyed earlier. If the records are not in English, they must be kept in a form that allows them to be readily converted or translated.
We may ask you to provide these records when we conduct an audit or investigation.
It is a criminal offence to:
- Fail to keep proper accessible records and necessary additional records for five years.
- Include a false or misleading detail in tax records.
- Wilfully damage or destroy tax records.
You may need to provide certain information or documents to enable us to assess the correct amount of tax to be paid. For example, you might have to submit a deed or certificate to claim an exemption or submit documents to us during an investigation. Under the TAA it is an offence to fail or refuse to lodge a document, statement or return as required.
In some circumstances, you are obliged to tell us about an event or transaction that may affect your tax liability. These notification requirements apply to companies and trustees as well as individuals. For example, a trustee will be liable for penalty tax where they fail to notify us when they become a trustee of land in Victoria or acquire further land as trustee in Victoria.
We cannot disclose the information we obtain under or in relation to the administration or execution of a taxation law except as provided under the TAA.
The TAA permits us to disclose tax-related information of a general nature. For example, we provide data on revenue collected from the various state taxes and levies, as well as details of our performance against our key performance indicators. We cannot disclose information that is likely to identify a particular taxpayer.
The secrecy provisions in the TAA enable us to provide information to certain specified agencies, including the Ombudsman, Victorian WorkCover Authority, members of Victoria Police, Legal Services Commissioner and Board, and various Commonwealth agencies, such as the Australian Securities and Investments Commission, Australian Federal Police, Centrelink and the Foreign Investment Review Board.
We are also able to share information with the Australian Taxation Office and other state and territory revenue offices.
The secrecy provisions in the TAA also bind any person or agency receiving information from us. It is a criminal offence to disclose any information disclosed by us under our secrecy laws, unless the recipient has our consent to do so and the disclosure is made to enforce a law or to protect the public revenue.
The TAA contains provisions to help us ensure everyone pays their taxes.
We can extend your payment time or make arrangements for you to pay by instalments. We take into account:
- Your capacity to pay and whether you will be able pay the full amount due within a reasonable timeframe.
- Your payment history.
- Your reasons for not paying the full amount by the due date, including any action you have taken to deal with these circumstances.
- Any steps you are taking to ensure your future taxation obligations are met on time.
If necessary, the Commissioner will take legal action to recover unpaid tax. This may include collecting your unpaid tax from third parties, such as people who owe you money or hold money on your behalf.
We use the investigative powers in the TAA to obtain information from taxpayers, their representatives and other sources holding details relevant to the administration of Victorian taxes.
Section 73 of the TAA provides powers to require documents, information and other evidence. We use these powers to obtain information from taxpayers and from agencies we believe have information relevant to a tax matter.
Section 76 of the TAA permits us to enter, inspect and search premises where we believe, on reasonable grounds, that there are documents or things that are relevant to the administration of a tax law. We have the power to seize such documents or things.
We may enter your premises at any reasonable time, but may not enter your residential premises without your written consent. An officer must produce their identity card at the request of the occupier. They may search, inspect and make copies of or extracts from documents kept at the premises. The officer may also seize any document or thing if they have reason to believe or suspect it is necessary to do so to prevent it from being concealed, lost, destroyed or altered.
A search warrant may also be obtained from a magistrate.
The purpose of imposing interest at the market rate is to reimburse the Victorian Government for the costs or loss of revenue incurred due to the late payment of the tax.
Under the TAA, interest is charged for an underpayment, a late payment or a failure to pay tax. The interest rate is the market rate plus the premium rate.
The market rate of interest is established by referencing the Bank Accepted Bills rate, unless the Minister has gazetted an order for a different rate to be used. The market rate is adjusted annually.
We may remit interest partly or in full. Our ruling about interest and penalty tax tells you what we take into account when deciding whether, and by what amount, to remit interest.
Penalty tax is charged for a:
- Tax default - a late payment, an underpayment or a failure to pay any of the tax due.
- Notification default - not notifying us of an error or omission, or a particular event or transaction when this is required.
The TAA provides a fixed penalty scale and also allows for a penalty to be adjusted up and down the scale. The level of penalty reflects the level of culpability (the seriousness of the wrongdoing) involved in the default.
The starting point for penalty decisions is 25 per cent of the amount of the default. This penalty may be increased, reduced or remitted in full, depending on the circumstances:
- The penalty tax rate will be reduced for disclosures made before or during an investigation. The remission is provided recognising the value to the investigation of your co-operation and disclosure(s).
- The penalty will be fully remitted if we find that you took reasonable care to comply with the law, or that the default occurred solely because of circumstances beyond your control.
- The rate of penalty tax will be increased to 75 per cent if we are satisfied that the default was partly or wholly caused by an intentional disregard of the law on the part of the taxpayer or their representative.
- Penalty tax will be further increased by 20 per cent if we find that during an investigation, the taxpayer has taken steps to prevent or hinder the investigation.
Serious breaches of tax obligations can result in criminal prosecutions. It is an offence under the TAA to evade or attempt to evade tax, knowingly give false or misleading information, deliberately omit information from a statement so that the statement is false or misleading, or to falsify or conceal the identity or address of a taxpayer or another relevant person.
The TAA provides a process for making refund applications. You have five years from the date of the overpayment in which to apply for a refund. You can apply for a refund of:
- Land tax or GAIC already paid (whether or not an assessment has been served for that liability).
- An overpayment made for payroll tax, a duty or the congestion levy, provided no assessment (including a deemed assessment) has been served for that liability.
We have three months to determine your claim. If we refuse to pay or offset some or the entire amount claimed, or the refund claim has not been decided within three months, you have the right to bring proceedings to recover that amount.
However, you need to be aware that this action must be taken within three months of the date of the decision, or the date on which a decision was due to be made.
If you have any other tax or FHOG debts, we can offset some or all the refundable amount against those other debt(s). If a person other than the applicant has paid some or the entire refundable amount, we can withhold the refund until we are satisfied that they receive the amount due to them.
Refer to our ruling on refunds for more guidance.