If your business has downscaled or stopped operating due to COVID-19, you may be able to claim GST and income tax deductions for expenses and losses. This depends on whether your business has stopped operating temporarily or permanently.
Income tax deductions
If your business has downscaled or stopped operating temporarily, you can usually still claim income tax deductions for expenses and losses.
If your business has stopped operating completely, you cannot usually claim these deductions, even if you may restart the business later.
Claiming income tax deductions for costs incurred due to COVID-19
If your business has incurred additional costs (unusual or abnormal) due to the pandemic you may be able to claim an income tax deduction for costs.
Deductions may also apply if your business is incurring depreciation loss or other holding costs on assets that cant be used because of COVID-19 restrictions or temporary downsizing.
More information
If you are unsure how this relates to your business, you should discuss your situation with a tax agent.
You can find out more in the Interpretation Statement IS 22/01.
IS 22/01: Income Tax - deductibility of costs incurred due to COVID-19
GST
If you’re registered for GST, and your business stops operating completely, you may need to cancel your GST registration. This means you will not be able to claim any more GST you’ve been charged (input tax).
Cancelling your GST registration
COVID-19 specific GST issues
More information
If you are unsure how this relates to your business, you should discuss your situation with a tax agent.
You can also find out more in the Interpretation Statement IS 21/04.
IS 21/04: Income tax and GST deductions for businesses disrupted by the COVID-19 pandemic
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