Deductions for ATO interest charges ending

From 1 July 2025, taxpayers will no longer be able to claim an income tax deduction for ATO interest charges.

This law specifically denies deductions for both the General Interest Charge (GIC) and the Shortfall Interest Charge (SIC). GIC and SIC incurred before 1 July 2025 are not impacted by these changes and remain deductible for the 2024-25 and earlier income years.

If non-deductible charges incurred on or after 1 July 2025 are later remitted, they will not be assessable income. However, if deductible charges incurred before 1 July 2025 are remitted, the remitted amount must be included in your assessable income.