ATO introduced credit card payment option for tax debts from January 2016. Now you can pay your tax payments using Visa, MasterCard and AMEX Card. 

Paying your tax debt using your credit card is not ideal situation for most of us. However, this gives us some relief if you are hard pressed for tax due date.  

ATO charges credit card payment fee. Charges can be deductible on certain situations.

Claiming a credit card, or charge card, payment fee as a deduction

When you can claim a tax deduction

A credit card payment fee or charge card payment fee will be deductible if:

• the fee is incurred by you as a result of paying a business tax liability (e.g. a business income tax liability, a goods and services tax liability, a fringe benefits tax liability or a PAYG withholding payments liability) using that credit card or charge card,
• you are carrying on a business for the purpose of gaining or producing your assessable income
• the business tax liability arises in connection with the carrying on of that business.

When you cannot claim a deduction

A credit card payment fee or charge card payment fee will not be deductible if:

• the fee is incurred by you as a result of paying your personal income tax liability using that credit card or charge card and you are a salary and wage earner or an individual partner in a partnership, or
• the fee is incurred by you as a result of paying a penalty (eg a failure to lodge penalty) using that credit card or charge card.