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  • Interest charged by the ATO

    You can claim a deduction for certain interest imposed by the ATO.

    The law authorises us to impose interest in specific situations, including where there is:

    • late payment of taxes and penalties
    • an increase in your tax liability as a result of an amendment to your assessment
    • an increase in other tax liabilities, such as goods and services tax or pay as you go amounts.

    The interest we impose includes:

    • general interest charge (GIC)
    • shortfall interest charge (SIC)
    • late payment interest.

    You can claim a deduction for the GIC and SIC we impose in the year it is incurred. This will depend on when you actually became liable for the interest. For example:

    • SIC imposed on an unpaid income tax shortfall is incurred in the year you are served a notice of amended assessment.
    • GIC imposed on existing unpaid tax liabilities is incurred on a daily basis, in the year it is imposed.

    You claim a deduction for ATO interest at Cost of managing tax affairs – Interest charged by the ATO in your tax return.

    See also:

    Last modified: 18 Jun 2021QC 31992