Drought and Tax

Australian Taxation Office

Type: Webpage
Knowledge level: Intermediate

Farm Table says:

The ATO website can be a little difficult top find answers on. We recommend calling ATO if you have any questions or queries ( 1800 806 218)

The Australian Taxation Office can assist drought affected taxpayers:

  • with tailored payment plans (with interest free periods)
  • providing additional time to pay your tax
  • waiving penalties or interest you may incur during drought
  • adjusting pay as you go instalments

Watch the ATO’s video on their drought assistance program here.

Remember to lodge all activity statements and tax returns by the due date even if you can’t pay.

Are emergency relief payments taxable income?

Amounts given to help your business are assessable income and subject to tax. However, if you spend these on expense in relation to your business (purchasing feed etc.) there will usually be no tax associated.

If used for other purposes outside of the business, such as food and personal clothing, the amounts received are not classed as income and won’t be taxed. Deductions however cannot be claimed for costs associated with buying these items.

If you received fund through a crowdfunding platform learn more here.

Can I get immediate tax deducions?

Primary producers can get immediate tax deductions for new fencing infrastructure and accelerated depreciation is available for new fodder storage and on-farm water storage facilities.

Find out about:

Have access to Farm Management Deposits changed?

The ATO website state “Early access may be available without changing the deduction you claimed. Your financial institution may require advance notice of your request for early withdrawal.”

Primary producers affected by natural disasters can withdraw their FMDs within the first 12 months of deposit without losing any claimed taxation benefits (deductions) if they have received primary producer Category C recovery assistance under the Natural Disaster Relief and Recovery Arrangements.

To withdraw their FMDs before 12 months, primary producers must:

  • have received a primary producer Category C measure recovery grant through the Natural Disaster Relief and Recovery Arrangements
  • have deposited the funds into an FMD account, and claimed a tax deduction in their tax return for the previous financial year, prior to receiving any primary producer Category C measure recovery grant
  • withdraw the funds from the FMD account after first receiving the primary producer Category C measure recovery grant.

Individual banks have announced Farm Management Deposit interest offsets:

Other forms of assistance

Small business entity concessions include a reduced company tax rate and PAYG instalment concessions.

Call 1800 806 218 to discuss your situation and find out how the ATO can help.

2018 - Australia - Australian Taxation Office
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