General Interest Charge

Contents

• Instances when GIC applies
• Calculation of GIC
• Tax treatment of GIC
• Late payment of debts: GIC remission policy

You may be subject to the General Interest Charge (GIC) if you have unpaid tax liabilities, including late or unpaid taxes, charges, levies, or penalties. The GIC is calculated daily on a compounding basis, which increases the amount you owe over time.

Instances when GIC applies

GIC applies to you in two primary situations:

• Late or Unpaid Tax Amounts: If you fail to pay your tax obligations on time or leave them unpaid beyond the due date.
• Excessive Shortfall in Income Tax Instalment: When you significantly underpay your estimated or varied income tax instalments.

Calculation of GIC

The GIC rate is reviewed quarterly, and is calculated based on your outstanding amount of unpaid tax. The interest compounds on a daily basis, leading to a growing debt until you settle your tax liability.

You are informed about the amount of GIC applied through a statement of account, a late payment notice, or a GIC notice. These documents detail the additional amount you owe due to the GIC.

The table provides the GIC annual rates and corresponding GIC daily rates for the specified quarters in the mentioned income years.

Late payment of debts: GIC remission policy

If you find yourself in a situation where you have incurred General Interest Charge (GIC) due to late payment of debts, you have the option to request a partial or full remission of the GIC.

This request can be made if you face extenuating circumstances, which may include:

Delay Not Caused by You
If the delay in payment was beyond your control and not due to any fault on your part (for example, occurrences like natural disasters, industrial action, unforeseen collapse of a major debtor, or sudden ill health of key personnel), and you took reasonable steps to minimize the delay.

Delay Due to You, But Efforts to Reduce Delay
In cases where the delay in payment was caused by your actions, but you made reasonable efforts to minimize the delay, and it would be fair and reasonable to grant a remission.

Serious Financial Hardship
If paying the full amount of GIC would result in serious financial hardship for you, you may be eligible for remission to alleviate the burden.

Under these extenuating circumstances, your situation will be assessed and then concluded whether it is appropriate to reduce or eliminate the GIC imposed on your late payments.

Remember that each case is evaluated on its merits, and it is essential to provide relevant evidence and documentation to support your request for GIC remission.