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COVID-19 - frequently asked questions

Payments and reporting

   Relying on this Guide

We are committed to providing you with accurate, consistent and clear information to help you understand your rights and entitlements and your obligations.

If you follow our information and it turns out to be incorrect, or it is misleading and you make a mistake as a result, we will take that into account when determining what action, if any, we should take.

Some of the information in this Guide applies to a specific financial year. This is clearly marked. Make sure you have the information for the right year before making decisions based on that information.

 

Answers to questions on:

PAYG instalment rates and payments

Question: I am not going to make enough income from my business, distributions or investment income this year to have a tax liability. Can I claim back the PAYG instalments I have already paid?

Answer: Yes, if the instalments you have been paying will be more than your estimated tax liability for the year, you can vary the instalment amount on your next activity statement.

This includes entities with substituted accounting periods (SAPs). Any variation must relate to instalments made during your corresponding SAP year as follows:

  • the 2020 income year for late balancers
  • the 2021 income year for early balancers.

If you choose to vary your PAYG instalments, we won't apply penalties or charge interest to varied instalments for the relevant income year.

You can vary your amount to either:

  • zero, to make no payment this period
  • a reduced amount, to cover what you estimate you need to pay for this period.

If you have varied your rate or amount down you can also claim a 5B credit for the amount you have already paid this financial year when you lodge your activity statement.

This will generate a refundable credit for the amount you have already paid when you lodge your activity statement and you will receive a refund for any credit remaining after offsetting against any other liabilities.

This question was last updated on 17 April 2020.

Question: I wish to vary my PAYG instalments due to the effects of COVID-19 on my income. Will I be penalised if I have a tax liability at the end of the year?

Answer: No. If you choose to vary your PAYG instalment amounts due to the effects of COVID-19, we will not apply penalties for excessive variation or charge interest on these instalments. However, if your instalments throughout the year are not sufficient to cover your liability you will have an amount to pay following lodgment of your tax return.

To reduce the potential effect of large final tax liability, you are able to make multiple variations throughout the year as your situation changes.

This question was last updated on 9 April 2020.

Question: Can I vary my PAYG withholding amounts from employees to zero on my next activity statement, in the same way as I can vary my PAYG instalments?

Answer: . No. You still need to report and pay the tax you withhold from your employees' wages. Variations to your PAYG instalment liability apply only to instalments you pay towards your own tax liabilities. It does not apply to tax you withhold from your employee wages.

This question was last updated on 17 April 2020.

Question: I'm an entity that will receive a refund from varying my PAYG instalments because of the effects of COVID-19. This may result in my franking account balance being in deficit at the end of the 2019-20 financial year. Will the Commissioner waive or remit my franking deficit tax (FDT) liability?

Answer: No, the FDT liability cannot be waived or remitted under the law.

If your franking account balance is in deficit at the end of the 2019-20 financial year you must:

  • lodge a franking account tax return
  • pay the FDT liability by the last day of the month immediately following the end of the financial year.

The FDT liability will generally be due by 31 July 2020. If you are unable to pay by that date you can request a payment deferral. We will consider a deferral of the payment up to 30 September 2020.

This question was last updated on 3 April 2020.

Question: I'm an entity that will receive a refund from varying my PAYG instalments because of the effects of COVID-19. This may result in my franking account balance being in deficit at the end of the 2019-20 financial year. Will the Commissioner consider exercising the discretion to not reduce the available offset?

Answer: Yes. While the FDT liability cannot be waived or remitted, it can be claimed as a tax offset. In some circumstances, the available tax offset may be reduced by 30% unless the Commissioner exercises the discretion to not reduce the available offset.

If the deficit in your franking account was due to the unexpected downturn in your business directly related to COVID-19, and the deficit relates to franked dividends paid before 1 March 2020, the Commissioner will allow a franking entity to manage their tax affairs as if the Commissioner has exercised the discretion to not reduce the available tax offset. In these circumstances, the full amount of the tax offset entitlement created by the franking deficits tax liability will be available to the franking entity.

If your situation is different, contact us to discuss your circumstances.

This question was last updated on 3 April 2020.

GST and medical supplies

Question: Is the supply of medical aids and appliances used for treating COVID-19 GST-free?

Answer: Yes, the sale of medical aids and appliances is GST-free if they meet certain conditions, including being listed in the GST law. For example:

  • cardiovascular, dialysis and diabetes medical aids and appliances are listed in the law as GST-free
  • respiratory appliances such as ventilators and other respiratory appliances for those with breathing difficulties such as peak flow meters are GST-free
  • items such as hand sanitiser and personal protective equipment including disposable face masks, disposable gloves, disposable gowns and protective eye wear in the form of goggles, glasses or visors are not GST-free as they are not listed in the GST law.

This question was last updated on 9 April 2020.

Excise and fuel tax credits

Question: Do I need to pay excise or get an excise license if I repackage alcohol to sell takeaway?

Answer: No. From 23 March until 30 June 2020, we will not take compliance action in the following alcohol repackaging circumstances that would normally require you to have an excise manufacture licence and pay excise duty:

  • If closed alcohol service venues are in possession of duty-paid kegged beer that they repackage and sell in sealed containers (such as growlers).
  • If closed alcohol service venues use duty-paid alcoholic beverages to make cocktails for takeaway sale in sealed containers.

See also:

This question was last updated on 9 April 2020.

Question: What if I can't lodge my excise return or pay amounts owing due to COVID-19?

Answer: You need to contact us on 1800 806 218 to discuss alternative arrangements.

This question was last updated on 17 April 2020.

Question: Can I get a fuel tax credit for my business use of fuel without lodging a business activity statement?

Answer: No - you need to make a claim for fuel tax credit on your business activity statement.

This question was last updated on 20 March 2020.

Question: Do I need to pay excise duty if I manufacture hand sanitiser?

Answer: Hand sanitiser does not usually attract excise, as its alcohol content has typically been treated (denatured) to make it unfit for human consumption. Denatured spirit may also be suitable for making other commercial cleaning products, and can be purchased without restriction. If you hold an excise manufacturer licence to distil spirits, you can make alcohol to manufacture into hand sanitiser.

We are simplifying and fast-tracking our advice and processes to support the further production of hand sanitiser during these difficult times.

See also:

This question was last updated on 20 March 2020.

Payments due before 23 January 2020

Question: Can I defer the due dates for tax payments that were due before 23 January 2020?

Answer: No, you cannot defer due dates for tax payments that were already due before 23 January 2020.

However you can request a:

  • remission of interest that has accrued on those debts from 23 January 2020
  • low interest payment arrangement. Also see questions about Interest and penalties .

This question was last updated on 25 March 2020.

Payments due from 23 January 2020

Question: Can I defer the due dates for tax payments that were due after 23 January 2020?

Answer: You can request a deferral of due dates for tax payments that were due after 23 January 2020 and which you have not yet been able to pay. Also see questions about Interest and penalties .

This question was last updated on 3 April 2020.

Lodgment deferrals

Question: I have a deferred lodgment date for my 2019 tax return because I usually lodge through my tax agent. However, my tax agent is closed due to COVID-19. Can I lodge my own return online by the deferred due date?

Answer: Yes, you can lodge your own return online if you can no longer lodge through your agent. If you are entitled to a refund, you don't need to contact us. We will process your return as quickly as we can. If you are expecting to have an amount to pay from your assessment, contact us after you lodge so we can ensure you are not charged a late lodgment penalty, and we can defer your payment due date.

This question was last updated on 25 March 2020.

Companies with substituted accounting periods

Question: My company has an approved substituted accounting period (SAP) for an early balance date and is entitled to a refund. Can I lodge my company tax return early and receive the refund straight away?

Answer: You can lodge your company tax return before the lodgment due date and receive a refund immediately if the company both:

  • is a full self-assessment taxpayer
  • has an approved SAP with a balancing period that has concluded.

For example, if you have an approved SAP with an early balancing period ending on 31 December 2019, your ordinary lodgment due date would be 15 July 2020. If you choose to lodge your 2020 tax return before that date, you can receive your refund immediately.

However, if you have a debt with us and you are due to receive a refund we are required by law to use the refund or credit to reduce your debt. If you don't want this to happen, contact us to discuss your circumstances.

This question was last updated on 3 April 2020.

Statement of tax record

Question: I'm seeking to defer tax payments and lodgments because of the effect of COVID-19 on my business. Can I still meet the criteria to obtain a satisfactory statement of tax record (STR) for the purpose of tendering for Commonwealth Government contracts?

Answer: Yes. If we have agreed to defer the due date for your tax payments or lodgments you can still meet the relevant criteria for a satisfactory STR. This is because you won't have an outstanding tax payment or lodgment. You must still lodge or make your tax payment by the deferred due date.

If you have a tax debt (for example, income tax, PAYGW or GST) on our system, you must contact us to discuss payment options. If we agree to a payment plan, you will still meet the criteria relating to the payment of a tax debt.

This question was last updated on 3 April 2020.

© AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA

You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).

ATO references:
NO COVID-19 FAQ


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