Tax Deductions for ATO Interest - Denied

Changes to tax deductions for interest on ATO debts will apply to ATO general interest charge (GIC) and the shortfall interest charge (SIC).

From 1 July 2025, taxpayers are no longer able to deduct GIC or SIC incurred for unpaid tax liabilities.

Previously, when taxpayers had an unpaid tax liability, the ATO would charge interest (GIC and SIC) and the taxpayer could claim that interest as a deduction, which would reduce taxable income and effectively lower the overall tax liability.

The changes will now deter taxpayers to use the ATO as a form of financier for unpaid taxes.

Businesses need to review their tax position and develop a strategy to manage tax liabilities.

While ATO interest will no longer be deductible, interest charges for loans used to tax liabilities for businesses will remain deductible.

There is now a greater incentive to secure funding from external financiers to payout ATO liabilities, while managing cashflow and maintaining deductibility for interest costs.

Creditlink Australia has a network of lenders that provide finance to assist with ATO liabilities.

Contact us if you:

• Have a Tax Liability to payout
• Need help with funding package that offers flexibility
• Want to know which type of finance is appropriate for your business and why

 For help with your tax, seek advice from your registered tax professional.

Need more information? Contact us and we'll be happy to answer any questions or provide further details.

Call us today on (03) 9005-6633 and experience the difference!