Changes to GIC and SIC deductions passed through Parliament
IMPORTANT Parliament has passed legislation to deny tax deductions for General Interest Charges (GIC) and Shortfall Interest Charges (SIC) incurred on or after 1 July 2025.
What this means if you have existing debt
- ATO interest on overdue tax will no longer be deductible, making it a real cost rather than a tax-offset
- If you currently have tax debt, the cost of keeping that debt will increase
- Businesses using ATO payment plans may find them significantly more expensive from a tax perspective
- Refinancing tax debt through a lender (where interest is still deductible) may present a smarter and more cost-effective option.
We recommend reviewing your tax position before 30 June to understand the potential impact and consider your options.
If you’d like help assessing if alternative financing could benefit your business, please contact your Allan Hall Advisor.