If your business has been affected by a natural disaster, you may receive a government support grant or payment to help you recover. These payments are counted as assessable income unless they are made non-taxable by parliament.
If a business 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.
You may be entitled to claim deductions if you use these payments to:
- purchase replacement trading stock or new assets
- repair your business premises and fit out
- pay for other business expenses.
The GST treatment of grants or payments depends on whether something is supplied in return for the payment. If you meet eligibility criteria to receive a grant and you don't have to provide something of value in return for the grant, there are no GST implications.
The following natural disaster support grants, payments or benefits are non-assessable non-exempt (NANE) which means they are non-taxable.
Cyclone Seroja 11 April 2021 recovery grant
Small businesses and primary producers affected by Cyclone Seroja that occurred around 11 April 2021 may have received special disaster recovery grants.
If you received a Category C grant under the Disaster Recovery Funding Arrangements 2018, it is NANE income for the 2021–22 and later income years.
2021 storms and floods recovery grant
Small businesses and primary producers affected by the storms and floods that occurred in Australia between 19 February 2021 and 31 March 2021 may have received special disaster recovery grants.
If you received a Category D grant under the Disaster Recovery Funding Arrangements 2018, it is NANE income for the 2020–21 and later income years.
2019–2020 Bushfires Relief recovery payment
If you were affected by the Australian bushfires in the 2019–20 financial year, you may have received bushfire relief or recovery funding from government, such as:
- the Australian Government
- a state or territory government
- a municipal corporation
- a local governing body.
These payments or non-cash benefits are NANE income for the 2019–20 and later income years.
2019 North Queensland floods recovery grants
Small businesses, primary producers or non-profit organisations affected by the North Queensland monsoonal trough flooding between 25 January 2019 and 28 February 2019 may have received special disaster recovery grants.
If you received a Category C or D grant under the Disaster Recovery Funding Arrangements 2018, it is NANE income for the 2018–19 and later income years.
2019 Restocking, replanting or farm infrastructure grants
Primary producers impacted by the North Queensland flood between 25 January 2019 and 28 February 2019 may be eligible to receive grants for replacing, repairing, restocking or replanting farm infrastructure, or similar. These grants are NANE income for the 2018–19 and later income years.
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.Find out how to report on support grants and claim business deductions related to natural disasters.