On Jun. 10, 2025, AST Tax reminded taxpayers that interest charged by AST Tax for late payments or underpayments will no longer be tax deductible, from Jul. 1, 2025.
The Treasury laws amendment (tax incentives and integrity) act 2025 specifies that any general interest charge (GIC) incurred on and after Jul. 1, 2025, regardless of whether the debt relates to an earlier income year, will no longer be tax deductible.
Interest charged incurred before Jul. 1, 2025 may still be claimed as a deduction.
On Nov. 28, AST PRL introduced amendment bill re tax incentives.
AST PRL introduced Treasury laws amendment (tax incentives and integrity) bill 2024, making amendments to luxury car tax, interest deductions, refund verification periods.
In addition, AST PRL published an explanatory memorandum with respect to this bill.
Interest Deduction Changes
Denies tax deductions for general, shortfall interest charge incurred from Jul. 1, 2025.
Aims to enhance incentives for correct self-assessment and timely tax payments.
AST Tax retains discretion to remit interest charges where fair as well as reasonable.
Refund Verification Extensions
Extends AST Tax notifying period for retaining business activity statement (BAS)-related refunds from 14 to 30 days; interest accrues on retained compliant refunds after day 14 until payment; this, as indicated, applies to refund amounts due.
Specifically, applies to refund amounts due after first Jul. 1 post royal assent.
Bill provides interest deduction amendments commence first quarter post royal assent.
On the other hand, refund verification changes commence first Jul. 1 post royal assent.
Next Steps
Bill was moved for second reading Nov. 28, and will follow relevant legislative process.
AST PRL Referral for Inquiry and Report
On the same day, AST PRL referred Treasury laws amendment (tax incentives and integrity) bill 2024 to Senate Economics Legislation Committee for review and report.
The Committee will examine provisions of bill and report findings by Jan. 30, 2025.
Committee invites written submissions from individuals and entities until Jan. 9, 2025.
Jan. 2025 AST PRL Committee Report
On Jan. 30, 2025, AST PRLSenate Economics Legislation Committee tabled its report.
The Committee recommended Treasury laws amendment (tax incentives and integrity) bill 2024 be passed, and Greens said it should be passed before AST PRL dissolution.
Schedule 1 - luxury car tax; 2 - denying deductions for interest charges; and 4 - AUD 20,000 instant asset write-off for small business entities are effective Apr. 1, 2025.
Schedule 3 - extending AST Tax notification period for retaining refunds effective Jul. 1.
Document dated Mar. 27, 2025, received from AST GVT Mar. 31, summarized Apr. 3.
In May, 2025, AST Tax explained the eligibility of instant asset write-off, see #253470.
Jun. 2025 AST Tax Reminder
On Jun. 10, 2025, AST Tax reminded taxpayers that interest charged by AST Tax for late payments or underpayments will no longer be tax deductible, from Jul. 1, 2025.
The Treasury laws amendment (tax incentives and integrity) act 2025 specifies that any general interest charge (GIC) incurred on and after Jul. 1, 2025, regardless of whether the debt relates to an earlier income year, will no longer be tax deductible.
Interest charged incurred before Jul. 1, 2025 may still be claimed as a deduction.
