Interest charged by the ATO

You can claim a deduction for interest the ATO charge on:

• Late payment of taxes and penalties
• Any increase in your tax liability as a result of an amendment to your assessment
• Any increase in other tax liabilities, such GST or PAYG
• Any underestimation of your tax liability when you vary an instalment for GST or PAYG

You can claim any interest charge we impose in the year in which it is incurred:

• When you are charged the interest if your income tax assessment is amended
• In the year in which the interest accrues on your account

Source: https://www.ato.gov.au/individuals/income-and-deductions/deductions-you-can-claim/other-deductions/interest-charged-by-the-ato/