120EAmount of interest payable

1. The amount of interest payable—

2. by a taxpayer on unpaid tax; or
3. by the Commissioner on overpaid tax,—
is calculated for each day in the interest period in accordance with the following formula:
$t\; \times \; r\; ÷\; 365$

Where:

• t t

  is the unpaid tax or overpaid tax on which the interest is payable; and

• r r

  is the Commissioner's paying rate or the taxpayer's paying rate applying on the day.

4. The amount of interest payable in an interest period, is the sum of the amounts calculated under subsection (1) for each day in the interest period.

5. The amount of interest outstanding at any time in an interest period is—

6. the sum of the amounts calculated under subsection (1) for each day in the interest period that falls before that time; less
7. any interest that has been paid by that time.

8. This section is subject to section 120EA.