Resources

Process, timing and terminology.

Short explanations of the procedures that most often affect our clients — what the key documents mean, which decisions can be challenged, and the time limits that apply.

This page is general information only and is not legal advice. Time limits are strict, and the periods described are indicative only — several depend on the taxpayer, the decision and the legislation in force at the relevant time. Rates and thresholds change. Confirm the position for your own matter before acting or refraining from acting.

ATO reviews, audits, objections and appeals

Most Commonwealth tax disputes follow a defined path: enquiry or audit, then an assessment or amended assessment, then objection, then external review or appeal.

Review and auditA review is a preliminary examination of a return or transaction. An audit is a formal and more detailed examination. The Commissioner may issue notices requiring information, documents or attendance to give evidence.

Position paperBefore finalising an audit the ATO will usually issue a position paper setting out its preliminary view. This is the practical opportunity to correct the factual record and put submissions before an assessment issues.

Objection under Part IVCA taxpayer dissatisfied with an assessment or other objectionable decision may object under Part IVC of the Taxation Administration Act 1953 (Cth). The objection must state fully and in detail the grounds relied on; grounds not raised can be difficult to pursue later.

Time limits to objectFor income tax assessments the period is generally two years from the date of the notice for individuals and small business entities, and four years for other taxpayers. For private rulings and many other decisions the period is 60 days. Late objections may be accepted at the discretion of the Commissioner.

Objection decisionThe Commissioner allows the objection in whole or in part, or disallows it. If no decision is made, the taxpayer may give written notice requiring one; if a decision is still not made within 60 days, the objection is taken to be disallowed.

Review or appealWithin 60 days of the objection decision a taxpayer may apply to the Administrative Review Tribunal for review, or appeal to the Federal Court of Australia. The Tribunal reconsiders the merits of the decision; the Federal Court hears the appeal from the objection decision.

Which decisions can be challengedPart IVC applies to assessments, amended assessments, private ruling decisions and other decisions expressly made objectionable. Decisions outside Part IVC — including many remission and recovery decisions — are challenged, if at all, by judicial review under the Administrative Decisions (Judicial Review) Act 1977 (Cth) or section 39B of the Judiciary Act 1903 (Cth).

Payment while in disputeLodging an objection does not suspend the debt. Interest continues to accrue unless a deferral or payment arrangement is agreed, or recovery is otherwise stayed.

Assessments, penalties and interest

These terms appear on almost every ATO notice. Each has a distinct legal effect.

Notice of assessmentThe determination by the Commissioner of taxable income and tax payable. Production of the notice is conclusive evidence that the assessment was properly made, so the amount can generally be disputed only through Part IVC.

Amended assessmentAn assessment that replaces an earlier one. The standard amendment period is two years for individuals and small business entities and four years for other taxpayers, with no time limit where there has been fraud or evasion.

Administrative penaltiesPenalties for a shortfall arising from a false or misleading statement are set by reference to behaviour: 25 per cent for failure to take reasonable care, 50 per cent for recklessness and 75 per cent for intentional disregard of the law.

Uplift and reductionA base penalty may be increased by 20 per cent where, for example, the taxpayer has previously been penalised for similar conduct or has hindered the audit. Conversely, voluntary disclosure — particularly before notification of an audit — can reduce the base penalty substantially.

General interest charge (GIC)Charged on unpaid tax debts and compounded daily at the 90-day bank bill rate plus an uplift factor. It runs from the due date until the debt is paid.

Shortfall interest charge (SIC)Charged on a shortfall created by an amended assessment, for the period between the original due date and the amended assessment. It is levied at a lower rate than GIC to reflect that the taxpayer was unaware of the shortfall.

RemissionThe Commissioner may remit penalties and interest. Penalty remission decisions can generally be objected against; GIC and SIC remission decisions generally cannot, and are challenged by judicial review or through complaint channels.

DeductibilityFrom 1 July 2025, GIC and SIC are no longer deductible. This materially increases the after-tax cost of carrying a disputed tax debt.

NSW land tax and surcharge land tax

Land tax is assessed annually by Revenue NSW under the Land Tax Management Act 1956 (NSW).

The land tax yearLand tax is assessed for a calendar year by reference to the land you owned at midnight on 31 December immediately before that year. Ownership and use on that date fix liability for the whole year — selling in January does not change the assessment.

How liability is calculatedRevenue NSW aggregates the taxable value of all NSW land you own, excluding exempt land such as your principal place of residence and land used for primary production. Tax is charged on the aggregate value above the general threshold, with a higher rate above the premium threshold. Thresholds and rates are set for each land tax year and should be checked for the year in question.

Land valuesTaxable value is based on the land value determined by the Valuer General, generally averaged over the current and two preceding years. A dispute about the value itself is an objection to the Valuer General under the Valuation of Land Act 1916 (NSW), which is a separate process from an objection to the assessment.

Surcharge land taxAn additional charge on residential land owned by foreign persons, assessed on the taxable value without the benefit of the general threshold. The rate has increased over recent years and should be confirmed for the relevant land tax year.

Objecting to an assessmentAn objection must be lodged with Revenue NSW within 60 days after service of the notice of assessment, under the Taxation Administration Act 1996 (NSW). The grounds should be stated fully.

Review of the objection decisionIf dissatisfied with the objection decision, a taxpayer may apply to the NSW Civil and Administrative Tribunal for review, or appeal to the Supreme Court of New South Wales, generally within 60 days of the decision.

Interest and penalty taxUnpaid land tax attracts interest comprising a market rate component and a premium component, and penalty tax may be imposed where a default is not voluntarily disclosed. Both may be remitted in appropriate cases.

Victorian state taxes

Victorian land tax, payroll tax and duties are administered by the State Revenue Office Victoria under legislation separate from New South Wales.

Land tax (Vic)Assessed for a calendar year on land owned at midnight on 31 December of the preceding year, under the Land Tax Act 2005 (Vic). The general tax-free threshold was reduced substantially from the 2024 land tax year, so many owners previously below the threshold are now assessed. Thresholds and rates should be checked for the relevant year.

Absentee owner surchargeAn additional surcharge applies to Victorian land held by absentee owners. The rate has increased in recent years and should be confirmed for the year in question.

Vacant residential land taxA separate annual tax on residential land left vacant for more than six months in a calendar year. Its geographic coverage has been expanded and the rate escalates for consecutive vacant years.

Windfall gains taxA tax on the uplift in land value arising from a rezoning in Victoria, payable by the owner at the time of rezoning, subject to exemptions and deferral options.

Commercial and industrial property taxA reform replacing land transfer duty with an annual property tax for commercial and industrial land entering the regime, following a transition period after the first qualifying transaction.

Payroll tax (Vic)Imposed under the Payroll Tax Act 2007 (Vic) on Victorian taxable wages above the annual threshold, with a lower regional rate and a surcharge for large employers. Grouping and contractor provisions are frequent sources of dispute.

Land transfer dutyDuty on dutiable transactions under the Duties Act 2000 (Vic), with additional duty payable by foreign purchasers of residential property.

Objecting to a Victorian assessmentAn objection must be lodged with the State Revenue Office within 60 days after service of the assessment or decision, under the Taxation Administration Act 1997 (Vic). The grounds should be stated fully.

Review and appealIf dissatisfied with the objection decision, a taxpayer may refer the matter to the Victorian Civil and Administrative Tribunal or appeal to the Supreme Court of Victoria, generally within 60 days of the decision.

Court proceedings: from statement of claim to judgment

Most civil claims in New South Wales are governed by the Civil Procedure Act 2005 (NSW) and the Uniform Civil Procedure Rules 2005 (NSW).

Statement of claimThe originating process that starts most civil proceedings. It pleads the material facts relied on, not the evidence. Once filed it must generally be served within six months.

Filing a defenceA defendant must file a defence within 28 days after service of the statement of claim. Each allegation must be admitted, denied or not admitted, and an allegation not dealt with may be taken to be admitted.

Default judgmentIf no defence is filed in time, the plaintiff may apply for default judgment. Judgment can be set aside, but the application usually requires both an explanation for the delay and an arguable defence.

Reply and close of pleadingsA plaintiff may file a reply, ordinarily within 14 days. Pleadings then close and the matter proceeds to directions.

Interlocutory stagesDirections hearings, discovery, subpoenas, lay evidence, expert reports and mediation. This is normally the longest phase of a proceeding and where most costs are incurred.

Hearing and judgmentThe matter is listed for hearing, evidence is tested and submissions are made. Judgment may be delivered at the conclusion of the hearing or reserved.

Limitation periodsUnder the Limitation Act 1969 (NSW) the general period for contract and tort claims is six years from when the cause of action accrues, with different periods for deeds, personal injury and other claims. Limitation should be checked at the outset, because it is a substantive bar.

Statutory demands, insolvency and bankruptcy

Corporate insolvency is governed by the Corporations Act 2001 (Cth); personal insolvency by the Bankruptcy Act 1966 (Cth).

Statutory demandA written demand on a company for a debt that is due and payable and at or above the statutory minimum. It is a means of establishing insolvency, not a debt-collection device for genuinely disputed debts.

The 21-day periodA company has 21 days after service to comply with the demand or to apply to set it aside. The period cannot be extended. Missing it is the single most consequential deadline in corporate insolvency practice.

Setting aside a demandA demand may be set aside where there is a genuine dispute about the debt, an offsetting claim, a defect causing substantial injustice, or some other reason. Both the application and the supporting affidavit must be filed and served within the 21 days.

Presumption of insolvencyFailure to comply gives rise to a presumption that the company is insolvent, which supports a winding-up application. The presumption may be relied on for three months.

Winding upOn a winding-up application the Court may order that the company be wound up and a liquidator appointed. The application must generally be determined within six months.

Voidable transactionsA liquidator may recover unfair preferences, uncommercial transactions and unreasonable director-related transactions within defined relation-back periods, and may pursue directors for insolvent trading.

Bankruptcy noticeFor individuals, a bankruptcy notice based on a judgment debt requires compliance within 21 days. Non-compliance is an act of bankruptcy on which a creditor petition may be founded.

SequestrationA creditor petition must generally be presented within six months of the act of bankruptcy and meet the minimum debt threshold. A sequestration order makes the debtor bankrupt, ordinarily for three years and one day.