11/06/2025
General interest charge incurred from 1 July will no longer be deductible, increasing the cost of carrying a tax debt.
ATO apply GIC if an amount of tax or another liability remains unpaid after the due date. The rate is currently 11.17% and it compounds daily.
Previously, this could be claimed as a deduction on tax returns. However, GIC incurred in income years starting on or after 1 July 2025 will no longer be deductible, regardless of whether the debt relates to an earlier income year. This means taxpayer will pay more overall to carry forward an unpaid tax debt.
GIC that was incurred before 1 July 2025 can still be claimed as a deduction this tax time.
