ATO Interest Charges No Longer Deductible from 1 July 2025 (August 25)

Relevant For:

Business owners, CFOs, and finance managers responsible for managing tax liabilities and cash flow.

Key Points:

• From 1 July 2025, ATO interest charges on unpaid or underpaid tax (GIC and SIC) are no longer tax-deductible.
• Applies to all income years starting on or after this date, regardless of when the debt arose.
• Increases the real cost of carrying tax debt; GIC currently 11.17% p.a., compounding daily.
• Businesses relying on deferring tax payments face higher costs.
• Timely tax compliance and proactive cash flow management are now more critical.

Full Article:

From 1 July 2025, businesses will no longer be able to claim income tax deductions for interest charged by the ATO on unpaid or underpaid tax liabilities.