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Interest and penalties for unpaid duty

Both compensatory interest and penalties can apply when duty is not paid on time and in full.

About interest and penalties

If you don’t pay duty on time and in full, you will be charged compensatory interest, and you may also be charged a penalty.

Interest and penalties have distinct purposes. Interest is to compensate the Crown for loss of use of money. Penalties are to penalise and deter the non-compliance that led to duty not being paid.

Customs will always charge compensatory interest if you haven’t paid duty on time and in full and, depending on the circumstances, we may also charge one of the following penalties:

In serious cases, prosecution may be considered.

If there are no revenue implications to your offending, then you’ll just be charged the relevant penalty, or prosecuted.

How interest and penalties are applied

Who the interest and penalties are charged to depends on the type of penalty and the circumstances:

  • compensatory interest, late payment penalties and infringement fees are charged to the duty payer (the importer, exporter, or excise licensee)
  • administrative penalties are issued to the declarant who made the erroneous entry.

Further information

See the Customer Guide: Compensatory interest and late payment penalties (PDF 2 MB) for an overview table showing when interest and penalties are applied and who is impacted.