Commissioner's Ability to Retain Refunds Pending Verification Checks

On 15 February 2012, the Assistant Treasurer announced that the Government will amend the tax law to allow the Commissioner of Taxation to hold refunds for verification prior to payment and has released exposure draft legislation for comment.

The exposure draft legislation seeks to provide the Commissioner with discretion to retain refunds for the period required to undertake checks to verify the correctness of the amount claimed. Certain threshold tests must be met before this discretion can be exercised. The discretion would apply in relation to refunds and payments arising under all taxation laws that the Commissioner administers.