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Thank you for your reply.
I have looked at TR 2006/3.
The ATO appears to have changed its format to issue shorter Fact Sheets (with links) rather than have someone read a "long" Tax Ruling. Please confirm.
I note that TR 2006/3 was last amended on 14 November 2018 - pre Covid.
Could you please advise why TR 2006/3 does not make reference to Covid.
I do understand that there could be some 150 Covid related Grants.
Is it possible for the ATO to publish a Fact Sheet that addresses Covid related Grants and provides clarity rather than saying some Grants may be Assessable and some Grants may not be Assessable?
The Covid world has forced some/many businesses into financial distress and placed business owners under stress. Indeed many businesses were forcibly closed by the State Government and other business owners closed due to health concerns (and rightly so).
A Business Owner could well be dismayed when a Tax Accountant informs them the Covid State Government Grant is Assessable Income - I could empathise with this.
I do hope all is well.
@DuncanS understand where you're coming from and agree, it's a difficult time and the list of different government grants is lengthy. We're currently developing some guidance around the tax treatment of state and territory grants. We'll let you know when it's available - hopefully soon.
Update - I have checked with our technical area and TR 2006/3 sets out the broad principles about how payments to entities to commence, remain in or cease business are taxed. It hasn’t been updated with specific grants like those related to COVID.
Please keep me informed.
Watched the TPB webinar with Sylvia Gallagher today (30 July).
Sylvia did a good job once again.
A number of Agents were posting question on the tax status of Covid Grants.
On another note, do competitive local government grants e.g. offered by City of Sydney here: https://www.cityofsydney.nsw.gov.au/__data/assets/pdf_file/0003/320448/Covid-19-relief-grants-progra... count as assessable income? It is not, from my understanding, a subsidy designed to help businesses carry on, but rather to adapt their business model to keep revenue flowing. As mentioned, it is competitive which means not every applicant, even if eligible, would have been successful in obtaining it.
For information on the specific grant you received you will have to contact the depart providing it.
We can confirm that if you receive one of the following state or territory grants or payments before 30 June 2020, it is assessable income and you will need to declare it in your 2020 tax return:
All the best!
Hi @NicolaATO ,
RE: " I can confirm that if you receive one of the following grants or payments before 30 June 2020, it is assessable income and you will need to declare it in your 2020 tax return...
I may be missing something, but this seems to contradict information on the VIC Gov't website regarding the tax treatment of the Victorian Business Support Fund grants.
"Government grants received, such as JobKeeper and the Business Support Fund - Expansion, when the grant is a “payment for no supply” and not taxable - are not to be included in annual turnover figures."
Can you provide any further information to clarify this please?
I agree that this information is contradictory and am a little confused.
If it is taxable would this also mean that the latest Business Support Extension Grants are taxable?
Please confirm ASAP.