No deduction for ATO interest charges and Non-resident CGT withholding

December 20, 2023

Treasury has released the 2023-24 Mid-Year Economic and Fiscal Outlook.

It flags the following proposed tax-related reforms:

  • No deduction for ATO interest charges — The government will deny deductions for ATO interest charges, specifically the general interest charge and shortfall interest charge, incurred in income years starting on or after 1 July 2025.
  • Non-resident CGT withholding — The government will increase the foreign resident capital gains withholding tax rate from 12.5% to 15% and reduce the withholding threshold from $750,000 to $0. The changes will apply to real property disposals with contracts entered into from 1 January 2025.
  • Penalty unit to increase — The value of a penalty unit will increase to $330, commencing four weeks after passage of legislation.