Tax deductibility and FBT treatment of Covid-19 test expenses
As such tests are inherently private in nature, related to an individual’s health, expenditure on such tests would not generally be tax deductible.
This will require the introduction of new specific legislation (i.e., to clarify that work-related Covid-19 test expenses incurred by individuals will be tax-deductible or FBT exempt where employers provide the tests to their staff) which will apply both where an individual is required to attend the workplace or has the option to work remotely.
The Government intends that these changes take effect from the beginning of the 2022 income year and will apply permanently once enacted.
As legislation is unlikely to be passed before 2022 FBT returns are due, businesses will need to self-assess whether providing tests to employees are likely to incur FBT. Formal work policies requiring employees to undertake tests in certain circumstances to protect other employees and the business under OHS legislation will help in providing an arguable position that providing such tests is not subject to FBT.
If you would like to discuss your business’ work-related expense for the 2022 financial year, particularly covid-19 related expenses, or require further information, contact your usual Mazars adviser or one of our specialists via the form below.
Brisbane – Jamie Towers | Melbourne – Evan Beissel | Sydney – Gaibrielle Cleary |
+61 7 3218 3900 | +61 3 9252 0800 | +61 2 9922 1166 |
Published: 16/03/22
All rights reserved. This publication in whole or in part may not be reproduced, distributed or used in any manner whatsoever without the express prior and written consent of Mazars, except for the use of brief quotations in the press, in social media or in another communication tool, as long as Mazars and the source of the publication are duly mentioned. In all cases, Mazars’ intellectual property rights are protected and the Mazars Group shall not be liable for any use of this publication by third parties, either with or without Mazars’ prior authorisation. Also please note that this publication is intended to provide a general summary and should not be relied upon as a substitute for personal advice. Content is accurate as at the date published.
.