Last month, legislation was passed to make certain grant payments non-assessable non-exempt income so that these payments are not subject to income tax by the Commonwealth.
The law requires the Treasurer to declare that a grant program is eligible by legislative instrument if he is satisfied that it is in response to the economic impacts of the coronavirus pandemic, and if it was first announced on or after 13 September 2020.
Mr Frydenberg has since moved to declare that six Victorian grant programs are eligible for the non-assessable non-exempt income treatment:
- Alpine Business Fund
This program provides direct financial support to alpine businesses impacted by the coronavirus pandemic and covers service fees owed to Alpine Resort Management Boards.
- Business Support Fund 3
This program is the third round of the Business Support Fund and provides direct financial support to eligible businesses that must stay closed or operate under restrictions until “COVID Normal”.
- Licensed Hospitality Venue Fund
This program provides direct financial support to eligible liquor licensees with hospitality venues impacted by restrictions due to the coronavirus pandemic.
- Melbourne City Recovery Fund — small business reactivation grants
One of the components of the Melbourne City Recovery Fund, the small business reactivation grants, is designed to support businesses to trade safely, including through outdoor trading activities, and to help encourage customers back into Melbourne central city.
- Outdoor Eating and Entertainment Package
One of the components of this program is the provision of direct financial support to eligible businesses to adapt their businesses to outdoor dining and entertainment in order to transition to what the Victorian government considers “COVID Normal”.
- Sole Trader Support Fund
This program provides direct financial assistance to eligible sole traders who have been impacted by restrictions due to the coronavirus pandemic. The assistance can be used towards overhead costs and to help sole traders’ transition to “COVID Normal”.
Only entities with an aggregated turnover of less than $50 million will be eligible for the concessional tax treatment.
Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.