Treasury Laws Amendment (2019–20 Bushfire Tax Assistance) Bill 2020 has now been passed, exempting disaster relief payments being made to individuals and businesses impacted by the bushfires from tax.
Under the new laws, volunteers working with a fire service of a state or territory will not be subject to income tax on compensation payments for loss of income resulting from their work with their respective fire service in the 2019–20 financial year.
The payments do not reduce any tax losses that individuals may make in the current income year or may have carried forward from prior income years.
The bill will also make disaster relief and recovery payments that would otherwise have been subject to tax non-assessable non-exempt income.
The payments or benefits also do not reduce any tax losses that entities may make in the current income year or may have carried forward from prior income years.
The new laws will also allow taxpayers to claim income tax reductions for donations to two organisations established by the Business Council of Australia in response to the bushfires.
These deductible gift recipients include the Australian Volunteers Support Trust and the Community Rebuilding Trust.
The Australian Volunteers Support Trust is a charity that provides support to families of any volunteer who tragically loses their life or suffers a serious injury through their volunteer work in relation to a disaster in Australia, and volunteers who become seriously injured through their volunteer work in relation to a disaster in Australia.
The Community Rebuilding Trust is a charity that provides support for the rebuilding and re-establishing of communities affected by disasters in Australia.
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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.