The Australian Taxation Office (ATO) announced a proposed provision that will disallow the deduction of general interest charges (GIC) and shortfall interest charges (SIC) for income years beginning on or after 1 July 2025.
After 1 July 2025, taxpayers will no longer be able to claim for ATO interest charges.
On 13 December 2023, as part of the 2023–24 Mid-Year Economic and Fiscal Outlook (MYEFO), the Government announced it would amend the tax law to deny deductions for ATO interest charges.
This measure is not yet law.
As the deductions will be denied, any GIC or SIC that is later remitted will no longer need to be included as assessable income.
The consultation is open from 24 September to 16 October 2024.