We impose interest in specific situations, including:
- 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 you incur the charge. 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.
The amount of interest you have been charged is normally pre-filled on your tax return. However, if you need to work out how much you have been charged, see Calculate and report ATO interest.
If we remit GIC or SIC, you must include the remission amount as interest income in your tax return in the income year that we grant it.