Grants provided to small businesses under the Victorian government’s $3-billion COVID-19 support package are now exempt from income tax, it has been confirmed.
Earlier in September, the Victorian government announced an extra $3 billion in new cash grants and tax relief for businesses, including:
Eligible businesses with payrolls up to $10 million are able to receive grants of $10,000, $15,000 or $20,000 depending on their size.
Businesses in Victoria’s alpine resorts are also able to access grants of up to $20,000 to help cover their resort fees.
The federal and Victorian governments have now reached an agreement to make the grants to small and medium businesses under Victoria’s Business Resilience Package exempt from income tax.
The agreement was reached in a recent national cabinet meeting between the federal and Victorian governments, and applies to grants under Victoria’s Business Resilience Package.
Under the agreement, grants paid until 30 June 2021 will be income tax free.
Moving forward, the federal government will look to extend the income tax exemption arrangement to all other states and territories on an application basis, meaning previous various state grants continue to be assessable.
Prime Minister Scott Morrison said the agreement is in recognition of the “exceptional circumstances Victorian businesses face”.
He continued: “Eligibility would be restricted to future grants program announcements for small and medium businesses facing similar circumstances to Victorian businesses.”
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