We are responsible for administering state taxes, duties and levies for the Victorian Government.
The Taxation Administration Act 1997 (TAA) makes general provision for the administration and enforcement of Victoria’s taxation laws and the reciprocal enforcement of recognised laws. The various taxation laws that are covered by the TAA include land tax (which includes vacant residential land tax and the absentee owner surcharge), payroll tax, duty charged on certain transactions (such as a transfer of land), wagering and betting tax, Keno tax, the commercial passenger vehicle service levy, congestion 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.
We also administer a number of grants and payments. You can read about how to object to or appeal a decision about your First Home Owner Grant (FHOG).
You can also object to a Back to Work payment 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 information 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 you do not submit a required return fully and accurately by the due date.
Sometimes, we issue a compromise assessment if it is difficult or impracticable to determine a person’s tax liability without undue delay or expense. 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 we find that there has been fraud or a deliberate failure to disclose material information. As a compromise assessment or reassessment is made with your agreement, you cannot object to it or have it reviewed by an administrative review body, including the Victorian Civil and Administrative Tribunal (VCAT) or a court as to its validity or correctness.
Where you use our Duties online payment system to pay duty on a dutiable transaction, such as a transfer of land, or not pay duty where no duty is payable on that transaction, that transaction will be considered a deemed assessment even if there is no liability to pay. You can object to a deemed assessment, or have it reviewed by VCAT or the Supreme Court in accordance with the TAA.
We can also make reassessments of a tax liability, for example, when you give us new information affecting the amount of tax you have been assessed for, or if as a result of an investigation there are additional liabilities identified.
We cannot make a reassessment of a tax liability more than 5 years after the initial assessment is made, unless
1. The reassessment is to adjust tax to give effect to a decision on an objection, review or appeal.
2. When the initial assessment or reassessment was made, all the facts and circumstances affecting the tax liability were not fully and truly disclosed to us.
3. A particular taxation law allows a reassessment to be made outside the time limits.
For some taxes, duties and levies – for example, payroll tax, general insurance duty, livestock duty, congestion levy, wagering and betting tax and the commercial passenger vehicle service levy – liability is calculated on the basis of details that you have provided to us in a return (which includes statements, certificates, reports, applications and other records).
We have a list of statements, certificates, applications, reports or other records that are returns for the purposes of section 3(1) of the TAA on our website.
Under the TAA, special tax return arrangements exist for the lodging and payment of tax for specific types of taxpayers, class of taxpayers and agents that act on behalf of these 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, or acquire further land, 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.
Under the TAA’s secrecy provisions, information obtained under or in relation to the administration of a tax law may be disclosed, for example:
• with your consent, or at the request of a person you have authorised to act on your behalf;
• in connection with the administration or execution of a taxation law, the Back to Work Act 2015, the First Home Owner Grant and Homebuyer Schemes Act 2000; or the Unclaimed Money Act 2008;
• to an authorised recipient including , but not limited to, the Victorian Ombudsman, Victorian WorkCover Authority, Victoria Police, Legal Services Commissioner or 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;
• when the information is 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 will or is likely to identify a particular taxpayer.
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 investigative powers within 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 third parties we believe have information relevant to determine a person’s tax liability. Such third parties may include other government departments and agencies, utility companies, councils, and banks .
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, which we have the power to seize, that are relevant to the administration or execution of a tax law.
We may enter your premises at any reasonable time, however, we cannot 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.
Where a tax default occurs you may be liable to pay interest on the amount of tax that is unpaid. Interest may also be charged for a failure to pay penalty tax.
Interest is not imposed on any unpaid interest or if the amount of the interest calculated on a tax default is less than $20.
Under the TAA, interest consists of two components: a market rate component and a premium rate component which is fixed at 8% per annum.
The purpose of imposing interest at the market rate is to reimburse the Victorian Government for the costs or loss of revenue incurred because of the late payment of the tax.
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 on 1 July.
The premium rate of interest is usually charged for late payment tax defaults and instalment payments not paid by the due date made under payment plans.
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% 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, which recognises 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% if we are satisfied that the default was partly or wholly caused by an intentional disregard of the law.
- Penalty tax will be further increased by 20% 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 over payment in which to apply for a refund.
Claims for a refund need to be made in the approved form. Depending on your circumstances you should complete and submit GEN-Form-01 or Duties-Form-63 (or any other dedicated tax refund application form provided by us).
Before a refund is paid the overpayment may be applied to meet other liabilities that you have arising under, or by reason of, a taxation law under the TAA or any other law that we administer. However, we will not apply an overpayment against other liabilities if the overpayment relates to a:
• contribution paid under Part 9B of the Planning and Environment Act 1987
• liability arising under the Back to Work Act 2015
• liability arising under Part 11 of the Commercial Passenger Vehicle Industry Act 2017, or
• refund of an amount paid or a liability arising under Part 6A of Chapter 4 or Part 4A of Chapter 6A of the Gambling Regulation Act 2003 other than to the extent of allowing the application of a refund of an amount paid under that Part against a liability arising under that Part.
You may apply for a refund through our online portal - Payroll Tax (PTX) Express, or by completing a refund application. 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 the amount overpaid.
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.
A refund of tax will not be paid to you where the tax has been recovered from another person unless you undertake to reimburse any such person with 90 days after receiving the refund. You must notify us in writing withing 7 days of the end of this period that the amounts were reimbursed. Penalties apply if you fail to do this.
Refer to our ruling on refunds for more guidance.