Crowdfunding disaster relief and tax
Crowdfunding and income tax
If you earn or receive any money through crowdfunding, some or all of it may be assessable (taxable) income, depending on the nature of the arrangement, your role in it and your circumstances.
The tax laws which apply to investment and financial activity undertaken in a conventional manner (for example, buying goods and services, buying shares, lending money) apply in the same way to investment and financial activity conducted under crowdfunding.
You must keep records explaining all transactions that relate to your tax affairs, including any crowdfunding arrangement. Generally, you need to keep records of most transactions, in English, for five years. The five years starts from when you prepared or obtained the records, or completed the transactions, whichever is the later.
Crowdfunding and disaster assistanceSome crowdfunding platform appeals seek funds to assist businesses, including primary producers affected by severe drought conditions or natural disasters such as bushfires or floods.
Businesses who receive assistance from crowdfunding platforms must consider how these payments affect their tax.
Tax consequences for recipients of drought or disaster assistanceIf you or your business receive assistance payments from private funds, charitable groups or crowdfunding platforms the effect on your tax depends on how you use the funds.
If the amounts received are intended to be used for personal emergency relief such as food or clothing, or other such non-business purposes, they are not included in your assessable income.