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  • Government entities

    Federal, state, territory and local government entities need to report the total payments they make to an entity, wholly or partly, for providing services.

    Additionally, federal, state and territory government entities will need to report the total grants paid to people or organisations that have an Australian business number (ABN). Local government entities don't need to report grants.

    You need to report details of these payments and grants on the Taxable payments annual report (TPAR) by 28 August each year.

    On this page:

    Government entities that need to report

    Government entities that need to report include:

    • federal government departments
    • executive or statutory agencies
    • statutory authorities
    • state or territory government departments and agencies
    • local governing bodies established by or under state or territory law
    • government-owned corporations
    • organisations that    
      • are either established by the federal government, a state or a territory (whether under a law or not) to carry on an enterprise, or established for a public purpose by an Australian law, and
      • can be separately identified by reference to their location or nature of the activities they carry on, whether or not they're part of a department or branch.

    Example 1: Transport Infrastructure Australia Ltd

    Transport Infrastructure Australia Ltd is a federal government-owned company incorporated under the Corporations Act 2001 and represented by shareholder ministers. Its purpose is to construct a new national highway linking regional communities throughout Australia. It has been established by the government to carry on a public purpose and can be separately identified by reference to the nature of the activities it carries on.

    It is required to lodge a TPAR if it makes payments or grants covered by this reporting measure.

    End of example

    Example 2: State Revenue Office

    A state’s major tax collection agency, the State Revenue Office, is an independent service agency and is located within the state’s Department of Treasury and Finance. It has been established by the state for a public purpose and can be separately identified by the nature of its activities, even though it’s part of a department.

    The State Revenue Office is required to lodge a TPAR if it makes payments or grants covered by this reporting measure.

    End of example

     

    Example 3: Partly owned government entity

    A local council partly owns a caravan park that is operated by a non-profit organisation. The caravan park pays contractors to maintain facilities, including the pool and gardens.

    As the caravan park is partly owned by the local council, it is considered a government-related entity. The caravan park will need to report payments it makes for services in the TPAR.

    End of example

    Government entities excluded from reporting

    Some government entities are exempt from lodging a TPAR. However, these exemptions don't apply to departments of the Commonwealth, a state or a territory.

    Government entities are exempt if they are:

    • providers of education courses
    • providers of child care, including registered carers and providers of approved child care services
    • hospitals
    • providers of medical services
    • cemeteries, cemetery boards or authorities
    • ministerial councils or related bodies, including those established by the Council of Australian Governments
    • Aboriginal land councils
    • national law bodies established under laws enacted by the states and territories
    • public museums, public libraries or public art galleries
    • community associations – for example, parents and friends associations
    • industry or professional associations, including registration and licencing boards and advisory councils
    • water catchment authorities, catchment councils and natural resource management boards
    • trustees of trusts or managers of funds, established for the public benefit or in the public interest
    • superannuation funds
    • defence force mess halls, canteens, brigades or clubs
    • public zoological gardens, public botanical gardens, public parks, public reserves or public alpine resorts
    • commissions of inquiry or Royal Commissions
    • courts or tribunals
    • Commonwealth, state or territory Houses of Parliament
    • community-based volunteer emergency services – for example, Country Fire Associations, volunteer fire brigades and State Emergency Services
    • entities with the primary purpose of promoting the arts
    • entertainment, recreation or sporting venues, including showgrounds, stadiums and racecourses or entities with the primary purpose of managing such venues
    • seaports or airports
    • prisons, detention centres, remand centres, or corrections offices
    • embassies or consular offices.

    If an arrangement exists where a government entity that is not exempt, makes payments on behalf of an exempt government entity, then the government entity making the payments is required to report them to us.

    Example: Reporting entity making payment on behalf of an exempt government entity

    A prison (that is exempt from reporting) engages a contractor to fix plumbing. The payment for the plumbing is made by a state government department to the contractor.

    The state government department is not exempt from reporting, so it will need to report the payment in its TPAR.

    End of example

    Non-assessable non-exempt government grants

    Non-assessable non-exempt government grants include:

    COVID-19 recovery payments

    Some payments from the Victorian Government to support small businesses will be non-assessable non-exempt income for tax purposes.

    Payments from the following eligible grants programs will be non-assessable non-exempt income for recipients that meet the eligibility criteria:

    • Alpine Business Fund
    • Alpine Support Program
    • Business Costs Assistance Program Round 2
    • Business Support Fund 3
    • Impacted Public Events Support Program
    • Independent Cinema Support Program
    • Licensed Hospitality Venue Fund
    • Licensed Hospitality Venue Fund 2021
    • Live Performance Support Program
    • Melbourne City Recovery Fund - Small business reactivation grants
    • Outdoor Eating and Entertainment Package
    • Sole Trader Support Fund
    • Sustainable Event Business Program.

    A payment may be non-assessable non-exempt if it was:

    • made under a grant program identified above
    • received by a grant recipient in the 2020–21 or 2021-22 financial years.

    The list of eligible grants programs may be extended to specific grants in other states and territories.

    If a grant recipient wants to treat the grant amount as non-assessable non-exempt and not include it in their tax return, they must meet certain eligibility requirements. Visit Non-assessable non-exempt government grants for grant recipients.

    Storms and floods

    2021 Storms and Floods

    Small businesses and primary producers affected by the storms and floods that occurred between 19 February 2021 and 31 March 2021 may be eligible to receive special disaster recovery grants.

    For a grant to be eligible as non-assessable non-exempt income, it must

    • be a Category D grant provided under the Disaster Recovery Funding Arrangements 2018
    • must have the written consent of the Prime Minister to be considered Category D.

    These grants are non-assessable non-exempt income for the 2020-21 income year and onwards.

    If a grant recipient wants to treat the grant amount as non-assessable non-exempt and not include it in their tax return, they must meet certain eligibility requirements. Visit Non-assessable non-exempt government grants for grant recipients.

    2019 North Queensland Flood Recovery

    As part of the 2019 North Queensland Flood Recovery Package the following grant types may be eligible as non-assessable non-exempt:

    Recovery grants

    Small businesses may be eligible to receive special disaster recovery grants. This includes primary producers and not-for-profit organisations affected by the North Queensland monsoonal trough flooding between 25 January 2019 and 28 February 2019.

    For a grant to be eligible as non-assessable non-exempt income, it must:

    • be a Category C or D grant provided under the Disaster Recovery Funding Arrangements 2018
    • have the written consent of the Prime Minister to be considered Category C or D.

    These grants are non-assessable non-exempt income for the 2018-19 income year and onwards.

    If a grant recipient wants to treat the grant amount as non-assessable non-exempt and not include it in their tax return, they must meet certain eligibility requirements. Visit Non-assessable non-exempt government grants for grant recipients.

    Restocking, replanting and farm infrastructure grants

    Primary producers may be eligible to receive certain grants for replacing or repairing farm infrastructure, restocking or replanting, or a similar purpose.

    These grants are non-assessable non-exempt income for the 2018–19 financial year and later financial years. Therefore, you do not pay tax on the grants.

    Bushfires disaster relief payments and non-cash benefits

    Any relief recovery payments or benefits provided by any level of government for the 2019-20 bushfires are non-assessable non-exempt income. This includes federal, state or territory, and local government bodies.

    Grant recipients do not need to include these payments in their tax return.

    Water infrastructure improvement payments

    Payments for Sustainable rural water use and infrastructure programs are non-assessable non-exempt income if the participant chooses to have the payment treated this way. The participant can also choose to treat it as ordinary income.

    For more information on the choice options and eligible programs visit Sustainable rural water use and infrastructure program.

    Government entities required to report grants

    If you provide a grant of the type listed under Division 59 in the Income Tax Assessment Act (ITAA 1997) you must:

    • complete a Taxable Payment Annual Report (TPAR)
    • answer 'yes' to the question 'Is this payment listed under Division 59 in the Income Tax Assessment Act (ITAA 1997)?'.

    Example

    The Victorian Government created the Business Support Fund. This fund provided grants to support businesses impacted by the stage 3 and 4 COVID-19 restrictions imposed on regional Victoria and metropolitan Melbourne.

    The minister declared this to be an eligible grant program, as it:

    • was first publicly announced after 12 September 2020
    • responded to the economic impacts of the pandemic
    • was directed at supporting businesses whose operations were significantly disrupted as a result of the public health directive.

    These payments are of the type listed under section 59-97 of the ITAA 1997 'State and Territory grants to small business relating to the recovery from the coronavirus known as COVID-19'.

    Therefore, the Victorian Government can report that this grant is listed under Division 59 of the ITAA 1997 on the TPAR form.

    End of example

    See also:

    Last modified: 21 Jul 2021QC 48850