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Australia: Guidance on income tax, GST treatment of compensation paid to landholders in connection with renewable energy projects

New guidance on renewable energy compensation payments.

August 4, 2026

The Australian Taxation Office (ATO) released guidance explaining the income tax and GST treatment of compensation paid to landholders in connection with renewable energy projects.

Landholders that have a renewable energy project affecting their land, may receive compensation from the project operator for the impact on the land, their ability to use it, or lost income, which can have different income tax and GST outcomes.

The ATO guidance covers:

  • How income tax and GST treatment is determined
  • Primary production concessions
  • Apportioning lump sum payments

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