|Ruling number||TAA 003v2|
|Date issued||16 December 2015|
|Issued by||B Buchanan|
Chief Commissioner of Stamp Duties
|Effective from||1 January 2016|
The following guidelines relate to the refund of an overpayment of tax under Part 4 of the Taxation Administration Act 1996 ("TAA").
If a taxpayer makes a payment that is greater than the assessment against which the payment is made, the Chief Commissioner must generally refund the difference to the taxpayer (section 18) or offset the amount against another taxation liability (section 19).
From 1 January 2016 refunds will be made by electronic funds transfer rather than by cheque.
When an overpayment of tax occurs, the Chief Commissioner will determine whether a refund should issue or whether the overpayment should be applied to another taxation liability of the taxpayer.
If a taxpayer has another taxation liability or liabilities, section 19(1) of the TAA provides a discretion for the Chief Commissioner to transfer the amount of the overpayment to that other liability or liabilities. This is the course which will usually be followed by the Office of State Revenue. The taxpayer will be provided with full details of how the overpayment was applied.
A refund may be credited towards a taxpayer's future liability but only with the taxpayer's consent (section 19(2)).
A refund will be issued to the taxpayer in all instances unless:
it is a cash refund paid over the counter to an agent of the person (limited to nominal amounts); or
the OSR has obtained authority from a taxpayer to issue the refund to another person, or
the circumstances are such that the taxpayer cannot be readily identified from the information immediately available. In these cases, the refund will be issued to the taxpayer's agent.
A decision will be made on a case by case basis in the following circumstances :
legal action is in progress between the parties, or
a third party has paid the tax and proof is provided to the Office of State Revenue, but the third party is unable to obtain authorisat ion from the taxpayer , or
other special circumstances exist.
A refund of an overpayment of tax which arises on a reassessment of a taxation liability as a result of a successful objection or appeal will be made under section 104 of the TAA. If the taxpayer has other taxation liabilities, the amount of the overpayment of tax may be applied to those other liabilities.
In addition, interest at the market rate will be paid under section 105, on the amount of the relevant overpayment. Interest payable under section 105 is not a "refund" and will not be applied to another taxation liability.
Where legislation provides for the passing on of the tax to another person, and this has occurred, a refund will be issued only where the Chief Commissioner is satisfied that arrangements have been made to pass on the refund to the person/s who paid the tax (section 20 of the TAA).
From 1 January 2016, refunds will be made by electronic funds transfer into an account nominated by the taxpayer. This new practice is part of a department-wide initiative to phase out the use of cheques.
Stephen R Brady
Chief Commissioner of State Revenue