Government to ensure COVID-19 tests are tax-deductible

Assistant Treasurer Michael Sukkar says the government will introduce new legislation to Parliament to ensure COVID-19 tests are tax-deductible.

The deductibility applies both when an individual is required to attend the workplace or has the option to work remotely.

Sukkar says the government will also ensure that fringe benefit tax will not be incurred by employers if they provide COVID-19 testing to their employees for work-related purposes.

The change will take effect from the start of the 2021-22 tax year and remain permanent.

“This action recognises that COVID-19 tests are an important tool for mitigating transmission risks and absences from the workplace,” he said.

“The Morrison government has acted swiftly throughout the pandemic to provide Australians and small businesses with clarity and certainty, and continues to do so as they transition back to their workplaces.”

Institute of Public Accountants general manager for tax policy Tony Greco said moves to ensure tax deductibility were welcome.

“It is also good news for employees if they can deduct the cost of procuring RATS for work purposes as this was problematic under existing tax rules,” he said.

“What we need to see now is the details to ensure the words match the legislative outcome so that we can get on to more important matters and remove all the uncertainties associated with the cost of procuring RAT’s for both employers and employees.”