Taxability on Government Grants/Payout
There were many questions raised whether or not Government Grants/Payout are Taxable. Especially, since last April 2020 where many Grants/Payout are given to companies due to Covid 19. In general, the guiding principle on taxability of grants/payout are:- Grant/ payout will be taxable if it is given to supplement trading receipts or to defray operating expenses of the company (i.e. grant/ payout is revenue in nature)
- Grant/ payout will not be taxable if it is given for the purpose of acquiring capital assets of the company (i.e. grant/ payout is capital in nature)


