ATO clarifies tax treatment on deferred loans
The Tax Office has addressed uncertainty from small businesses concerned around how it will treat loans that have been put on hold during the coronavirus crisis.
On its website, the ATO said it considers a debt to be forgiven for tax purposes if, generally:
- The debtor is somehow relieved from the legal obligation to repay it.
- There is evidence that the creditor won’t insist on repayment or rely on the obligation for repayment.
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