The ATO’s new GIC remission regime fundamentally changes how taxpayers and advisers must approach interest and penalty relief, with standardised forms, centralised decision‑making and clearer (but tighter) guidance on when relief will be granted. This blog outlines what has changed, how it links to the recent Tax Ombudsman review, and where to find the key ATO forms and materials your practice now needs to use.
Why GIC remission is now more critical
From 1 July 2025, general interest charge (GIC) and other ATO interest on tax debts are no longer tax‑deductible, significantly increasing the real after‑tax cost of carrying ATO debt for individuals and businesses. Combined with elevated GIC rates and daily compounding, even relatively short periods of under‑payment can now have a material impact on cash flow and business viability.
The Tax Ombudsman’s 2026 review of the ATO’s management of GIC remission found that interest balances have been growing much faster than primary tax debt and that many taxpayers perceive the remission process as inconsistent, opaque and confusing. In particular, taxpayers and advisers reported unclear criteria, variable outcomes and a tendency to “phone shop” for better results, which the review linked to weak internal procedures and pressure on front‑line ATO staff.
What has changed in the new regime
In response to the Ombudsman’s recommendations, the ATO has implemented a suite of administrative changes during late 2025 and early 2026, in addition to agreeing to all 10 recommendations in the review. Key elements of the new regime include:
- A centralised function and review team for GIC remission decisions over set thresholds, aimed at improving consistency and the quality of decision‑making.
- Mandatory use of standardised remission application forms for GIC, shortfall interest charge (SIC) and failure‑to‑lodge (FTL) penalties from 22 January 2026 (for agents) and early 2026 (for businesses and individuals).
- Enhanced public guidance, including clearer website content and published examples that illustrate when remission is likely or unlikely to be approved.
Under the new process, most phone‑based remission decisions have effectively been replaced by written applications lodged via Online services for agents or Online services for business, with a capped amount for minor remissions that can still be handled quickly. This is intended to reduce inconsistent “on the spot” decisions but is already contributing to longer turnaround times as centralised teams work through growing queues of applications.
Key ATO forms and guidance links
For practitioners and taxpayers, the most immediate practical change is the requirement to use the new ATO forms and online processes for remission requests. The core resources now include:
- GIC remission application form (XLSX) – the standard form for requesting ATO remission of general interest charge in most situations, designed for tax professionals and businesses using Online services.
- Interest and FTL penalty remission request forms – a suite of new forms covering GIC, SIC and FTL penalties, with specific versions for individuals, businesses and agents, now live on the ATO website.
- How to request a remission of interest and FTL penalties – updated step‑by‑step ATO guidance explaining eligibility, evidence requirements, lodgement channels and what to expect from the decision process.
The forms and guidance can be found at:
How to request a remission of interest and failure to lodge penalties | Australian Taxation Office
Themes from the Tax Ombudsman’s review
The Tax Ombudsman’s report, In the interest of fairness: A review into GIC remission, is the key background document to the current changes. Among other things, the report found:
- The ATO’s tightening of its remission approach from late 2023 was not clearly communicated, leading to taxpayer confusion and frustration.
- Many taxpayers and practitioners considered existing GIC practice statements confusing and unhelpful, and survey data showed high levels of dissatisfaction with both guidance and decision consistency.
- Phone‑based remission decisions were often made without proper adherence to internal guidance, contributing to “shopping around” and undermining perceptions of fairness.
The report recommended a standardised application form, a centralised decision‑making function, improved training and clearer public guidance, as well as a post‑implementation review within 12 months of the changes to ensure the reforms are working as intended. The ATO has publicly acknowledged these recommendations and is positioning the current regime as the first phase of a broader refresh of taxpayer relief provisions through 2026.
Practical implications for advisers and taxpayers
From a practical perspective, the new regime raises the bar for remission requests and places a premium on detailed, evidence‑based submissions. Taxpayers and advisers should now assume that:
- Remission requests will be assessed primarily on written material lodged via the standard forms, with less scope for informal negotiation by phone.
- Decision‑makers will be working from more prescriptive criteria and examples, making it essential to clearly link each factual circumstance to the recognised grounds for remission.
- Turnaround times may be longer, particularly for larger amounts directed to centralised teams, so remission strategy must be integrated into broader cash‑flow and dispute‑management planning.
For businesses and individuals, there are several immediate action points:
- Review existing ATO debt and consider whether a well‑supported remission request under the new regime is warranted, particularly where delays were caused by external events, ATO error or reliance on ATO advice.
- Ensure Online services for business and Online services for agents access is correctly set up so new forms can be lodged promptly and tracked.
- Build stronger contemporaneous records (for example, cash‑flow forecasts, correspondence with lenders or customers, health or disaster documentation) to support future remission applications under the more structured, evidence‑based approach.
The combination of non‑deductible, high‑rate, compounding interest and a more formalised remission regime means that interest strategy can no longer be an afterthought in tax risk management. Used well, the new forms and guidance provide a clearer roadmap for fair outcomes – but they also demand a more disciplined, evidence‑rich approach from taxpayers and advisers seeking relief.
