On 15 February 2021, the Australian Taxation Office (ATO) published updated guidance about the income tax and goods and services tax (GST) implications of a wide range of COVID-19 financial support measures provided by the commonwealth, state/territory, and local governments during the pandemic.
The guidance is relevant to business taxpayers and to individual taxpayers.
Taxpayers in receipt of any of the following COVID-19 financial support payments should consider whether their income tax and/or GST treatment of those payments to date aligns with the ATO’s views, and decide whether follow up action should be taken:
- JobKeeper payments;
- Cash flow boost payments;
- Pandemic leave disaster payments;
- Childcare transition payments;
- Loans and grants under the commonwealth government’s Creative Economy Support Package (i.e., provided to artists, arts organizations, etc.);
- Grants under the commonwealth government’s Consumer Travel Support program (i.e., provided to travel agents and tour arrangement service providers);
- Other payments and grants from commonwealth, state/territory, or local governments to assist businesses to continue operating or adapt to changed circumstances; and
- Vouchers to subsidize the purchase of goods and services from COVID-19 affected businesses.
Taxpayers in receipt of relief in respect of any of the following state/territory government taxes or charges should also consider the ATO’s position in relation to the income tax and/or GST implications:
- Payroll tax relief (e.g., higher thresholds, waivers, and interest-free deferrals);
- Land tax relief (e.g., waivers, reductions, deferrals, rebates, credits, refunds);
- Rent waivers and/or reductions for commercial tenants in government-owned properties; and
- Rebates on electricity charges.
The guidance does not purport to be comprehensive. Taxpayers who are uncertain about the appropriate income tax and/or GST treatment of specific financial support received from government agencies during the pandemic should seek professional advice.
Source: Deloitte Australia