Denying deductions for general interest charges

Treasury has released draft legislation that will deny deductions for general interest charges (GIC) and shortfall interest charges (SIC) incurred from 1 July 2025.

Currently, entities are able to claim deductions for both GIC for late payment of tax liabilities, and SIC that arises when there is incorrect self-assessment of a tax liability which leads to a tax shortfall.

Taxpayers will continue to have the ability to apply to the ATO and request the remission of GIC and SIC amounts. Currently, when the ATO remits GIC or SIC amounts, the taxpayer is assessed on the relevant amounts under the assessable recoupment rules in Subdivision 20-A of the Income Tax Assessment Act 1997.

However, if the amendments are passed, this will no longer be the case and deductions cannot be claimed for GIC and SIC amounts.

Discover the proposed changes in denying deductions for general interest charges and shortfall interest charges. Read more here.

• Deny Deductions For The General Interest Charge And Shortfall Interest Charge

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