Tasmanian Government COVID-19 Business Grants
The Tasmanian Treasury has sought advice from the Australian Government regarding the eligibility of a number of Tasmanian grants to be considered eligible for non-assessable non exempt income tax treatment.
The Australian Government confirmed that a grant must meet a number of criteria to be eligible for this concessional tax treatment, including that it:
- was announced on or after 13 September 2020;
- is paid between 13 September 2020 and 30 June 2022;
- is focussed on helping small and medium businesses;
- in effect responds to the economic impacts of COVID-19;
- applies to business recipients with an aggregated annual turnover below $50 million; and
- most importantly, the grant needs to be directed at entities carrying on a business that are the subject of one or more public health directives that apply to a geographical area in which the business conducts business operations, and the directive has resulted in a significant disruption to the business’s operations.
The Australian Government have advised that the term ‘significant disruption’ in the final criteria listed above has a high threshold, and typically applies to extended and severe lockdowns, such as those faced by Victorian businesses during the 2020 Victorian lockdown.
Given the health orders currently in operation in Tasmania, we have been advised that it is unlikely the Tasmanian Government’s grant programs would be considered to meet this threshold.
We will of course continue to monitor this matter and will seek further advice from the Australian Government as the COVID situation, and related health orders, in Tasmania evolves.