Australia has published the Treasury Laws Amendment (COVID 19 Economic Response No. 2) Act 2021, which received royal assent (was enacted) on 10 August 2021. One of the key tax measures of the Act is the amendment of the Income Tax Assessment Act 1997 to make payments received by eligible businesses under certain COVID-19 business support programs and Commonwealth COVID-19 disaster payments exempt from income tax. Amendments are made to provide a similar exemption for individuals as well.
The Act also amends the:
- Coronavirus Economic Response Package (Payments and Benefits) Act 2020 to enable the Treasurer to make rules for economic response payments to provide support to an entity where they are adversely affected by restrictions imposed by a state or territory public health order that is directed at controlling the transmission of COVID-19;
- Taxation Administration Act 1953 to enable tax information to be disclosed to Australian government agencies for the purposes of administering COVID-19 business support programs; and
- Coronavirus Economic Response Package Omnibus (Measures No. 2) Act 2020 to reinstate a temporary mechanism for ministers to change arrangements relating to meeting information and document requirements under Commonwealth legislation.
The provisions of the Act generally commenced on 11 August 2021, although it is provided that the exemption for eligible businesses applies for income years ending on or after 1 July 2021 and the exemption for individuals applies for the 2020 21 and later income years.