Drought and Rural Assistance – Taxation Measures (Australian Taxation Office)

This program aims to deliver a number of tax assistance measures for farming families, businesses and rural communities. It seeks to help drought-affected individuals and businesses across regional, rural and metropolitan areas to manage their tax.

The Australian Taxation Office can help people affected by drought and other natural disasters with:
- More time to pay
- Waiving penalties or interest charged at a time they are affected by drought
- Payment plans with interest free periods
- Adjusting pay as you go (PAYG) installments to better suit their circumstances
- Tax incentives for primary producers

Assistance available include:
- Instant asset write-off
- Immediate deductions for fodder storage assets
- Income tax averaging
- For drought–affected primary producers:
a) Profit from the forced disposal or death of livestock
b) Proceeds from double wool clips
c) Insurance recoveries

In special circumstances, the Commissioner for Taxation may release individuals from payment of income tax, fringe benefits taxes and some other taxes where it is shown that payment would cause serious hardship. The Tax Office will look at circumstances on a case-by-case basis.

​​​There are also a number of other tax concessions available to primary producers, regardless of their location or if they are in hardship, that can be broadly classified as:
- Tax offsets which primary producers, given their highly variable income streams and remote location, can use to lessen their tax burden.
- Tax deductions relating to expenses that directly facilitate earning income and reduces assessable income.
- Tax concessions relating to a variety of assistance measures for individuals such as deferrals of tax liability that can help to reduce an individual’s assessable income in the current financial year.

As part of the 2020-21 Budget, the Government has made changes to the instant asset write off and expanded entitlements to a wider range of businesses through a temporary full expense incentive to support new investment and increase business cash flows. Until 30 June 2022, businesses with a turnover of $5 billion will be able to deduct the full cost of depreciable assets of any value in the year they are first used or installed ready for use.

The Government has also introduced a loss carry back scheme which will allow businesses with a turnover up to $5 million to offset losses against previous profits on which tax has been paid, to generate a refund.

For further information on these measures contact the Australian Taxation Office.

Eligible applicants include drought-affected individuals and businesses across regional, rural and metropolitan areas.