Non deductibility of ATO interest charges for businesses
Businesses can no longer claim income tax deductions for ATO general interest charge (GIC) and shortfall interest charge (SIC) charged on unpaid/underpaid tax liabilities. This change applies to amounts incurred in income years starting on or after 1 July 2025.
.
Previously, businesses could deduct ATO-imposed interest charges on overdue tax debts, reducing the net cost of these charges. From 1 July 2025, this deduction is no longer available.
This legislative change is significant for businesses that manage cash flow by deferring tax payments, as the cost of carrying tax debt will effectively increase. Without the tax deduction, the real cost of ATO interest charges rises, making it more expensive to delay tax payments. Currently, the GIC rate is 11.17%.
The removal of tax deductibility for ATO interest charges underscores the importance of timely tax compliance.
Acctweb
Hot Issues
- ‘Results in paying more tax’: ATO warns Australians against early super access
- Employee or Contractor ?
- Inherited assets: what you need to know about pre-CGT v post-CGT investments
- WHS and OHS Regulatory Update: August 2025
- HECS/HELP debt reduction Bill introduced
- Non deductibility of ATO interest charges for businesses
- How safe is your business from scams
- The biggest earthquakes in history : (1905–2025)
- What Terms Should I Include in a Capital Raising Term Sheet?
- Prepare for Div 296 now, accountants warn
- ATO, lawmakers demand urgent action as GST fraud skyrockets
- 5 things smart businesses do to stop copycats
- Do not trust myGov messages
- Regulations have changed for buy now pay later services
- Australian Taxation Office (ATO) warns about misinformation on super changes circulating online
- The rise and fall of the world’s largest economies | GDP Epic Battle (1560–2025)
- ATO hit list 2025 – Key Areas Under Review
- Why Succession Planning Matters for Privately Owned and Wealth Groups in Australia
- Benefits of a business plan
- Roles and Responsibilities in a Business Partnership
- Mixing business and pleasure? Be vigilant this tax season
- 30 June 2025 - Tax Checklist - Small (and Micro) Business
- 3 more GST fraudsters sentenced under ATO’s Operation Protego
- Evolution of Boeing - 1916 - 2025
- ATO - Targeted Areas of Focus 2024-25
- 6 ways to improve your business plan
- Benchmarks for small business
- Beware the early lodgment tax trap, CPA Australia warns
- Tax lawyer flags compliance traps with family trusts
- Superannuation on paid parental leave from 1 July 2025
- Tax Time Checklists Individuals; Company; Trust; Partnership; and Super Funds
- Comparison of various Animal Weights