Income Tax and Goods and Services Tax – writing off debts as bad

This public ruling is an update and re-issue of BR Pub 05/01 Bad Debts – Writing off debts as bad for GST and income tax purposes. Although the existing ruling was issued for an indefinite period it had become outdated. The new item does not change the Commissioner’s position on the tests to apply in deciding whether or not a debt is “bad”, and what actions are sufficient to “write-off” a bad debt. The item only considers the questions of when a debt becomes “bad” and when the bad debt will have been “written off”. It does not consider any of the other legislative requirements relating to deductibility of bad debts.