Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 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.

  (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.

  (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.