Government disaster support grants and payments
If your business has been affected by a natural disaster, the government may give you a government support grant or payment to help your business recover. These support grants or payments are assessable income unless they are made non-taxable by parliament.
If a business disaster support grant or payment is:
- assessable income, you need to report the payment in your tax return in the income year you receive it
- non-taxable, you don't need to include the payment in your tax return and you don't pay tax on it.
GST
If you receive a government disaster support grant or payment to support your business and you are not required to provide anything to receive it, GST is not payable on it. See GST treatment of grants for more information.
Deductions
The ordinary rules about deductibility apply to business expenses you pay for using a business support grant or payment you receive. For example, you can claim a deduction for the cost of:
- purchasing replacement trading stock or new assets
- repairing your business premises and fit out.
Non-taxable government support grants
The following government disaster support grants or payments are Non-Assessable Non-Exempt (NANE), provided you satisfy all specified criteria. If you have received a government disaster support grant or payment that is not listed, it is assessable and must be included in your tax return for the income year in which you receive it.
This information will be updated whenever additional natural disaster support grants or payments to business are made non-taxable and doesn't include grants or support payments paid prior to the 2021 income year that were not assessable income.
Cyclone Seroja 11 April 2021 recovery grant
If you received a Category C grant in relation to Cyclone Seroja that occurred around 11 April 2021, it is NANE income for the 2021-22 and later income years.
2021 storms and floods recovery grant
If you received a Category D grant in relation to the storms and floods between 19 February 2021 and 31 March 2021, it is NANE income for the 2020-21 and later income years.
If you received a Category C or D grant, in relation to storms and flooding after 31 March 2021, it is counted as assessable income and you will need to report the payment in your tax return for that year.
Other disaster relief
If you receive assistance payments from private funds, charitable groups or crowdfunding platforms to help you pay for your business expenses, you need to declare these as assessable income.