Income Tax Assessment Act 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

PART 2-5 - RULES ABOUT DEDUCTIBILITY OF PARTICULAR KINDS OF AMOUNTS  

Division 26 - Some amounts you cannot deduct, or cannot deduct in full  

Operative provisions  

SECTION 26-25   Interest or royalty  

26-25(1)    

You cannot deduct under this Act interest (within the meaning of Division 11A of Part III of the Income Tax Assessment Act 1936 ) or a ^* royalty if:

(a) Subdivision 12-F in Schedule 1 to the Taxation Administration Act 1953 requires you to withhold an amount from the interest or royalty; and

(b) either:

(i) you fail to withhold the amount; or

(ii) after withholding the amount, you fail to comply with section 16-70 in that Schedule in relation to that amount.

26-25(2)    

You cannot deduct under this Act interest (within the meaning of Division 11A of Part III of the Income Tax Assessment Act 1936 ), or a ^* royalty, that is in the form of a ^* non-cash benefit if:

(a) section 14-5 or 14-10 in Schedule 1 to the Taxation Administration Act 1953 requires you to pay an amount to the Commissioner before providing the benefit, because of Subdivision 12-F in that Schedule; and

(b) you fail to pay the amount as required by that section.

26-25(3)    
If:

(a) apart from subsection (1) or (2), you can deduct interest (within the meaning of Division 11A of Part III of the Income Tax Assessment Act 1936 ) or a ^* royalty for an income year; and

(b) the ^* withholding tax payable for the interest or the royalty is paid;

you can deduct the interest or royalty for that income year.