Australia Tax Agency Clarifies Rules on Interest Deductibility for Late Tax Payments

The Australian Taxation Office June 9 clarified general interest charge (GIC) deductibility rules for late tax payments under Act No. 29, the Treasury Laws Amendment (Tax Incentives and Integrity) Act 2025. The announcement clarifies that: 1) GIC incurred on and after July 1 on late payments or underpayments of tax isn’t deductible, regardless of whether the debt relates to an earlier income year; 2) the Tax Agency’s GIC rate is currently 11.17 percent and compounds daily; 3) businesses are encouraged to withhold tax from their cash flow in a separate bank account to ensure the funds are available; 4) payment ...