Interest charged by the ATO

You can claim a deduction for interest we charge on:

  • late payment of taxes and penalties
  • any increase in your tax liability as a result of an amendment to your assessment
  • any increase in other tax liabilities, such as goods and services tax (GST) or pay as you go (PAYG) amounts
  • any underestimation of your tax liability when you vary an instalment for GST or PAYG.

The interest we impose includes general interest charge (GIC), shortfall interest charge (SIC) and late payment interest.

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

  • SIC is incurred on an unpaid income tax shortfall 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 item D10 – Cost of managing tax affairs, in your income tax return.

See also:

Last modified: 16 Jun 2016QC 31992