Small-business coronavirus grants set to be income tax-free under new bill
Treasury Laws Amendment (2020 Measures No. 5) Bill 2020 has now been introduced in Parliament, following the government’s announcement that small and medium business grants announced on or after 13 September will be non-assessable non-exempt income.
The bill will amend the income tax law to make payments received by eligible businesses under certain grant programs administered by a state or territory non-assessable non-exempt income so that these payments are not subject to income tax by the Commonwealth.
Only entities with an aggregated turnover of less than $50 million will be eligible for the concessional tax treatment.
Eligibility will also require that the payment must be made under a grant program that is declared by the Minister to be eligible and is, in effect, responding to the economic impacts of the coronavirus pandemic.
The grant program must be first publicly announced on or after 13 September and directed at supporting businesses subject to certain restrictions regarding their operations.
The bill was first introduced in the House of Representatives on Wednesday and has yet to pass both houses.
Source: Accountants Daily