Tax treatment of government supports in the hands of employers

Feb 08, 2021

Chartered Accountants Ireland liaised with Revenue for information on the Temporary Wage Subsidy Scheme (TWSS), Employment Wage Subsidy Scheme (EWSS) and the Restart Grant in terms of how these supports are treated for tax purposes in the hands of the employer.  Revenue helpfully provided information which the Institute has made available on our COVID-19 Hub. 

The Institute’s COVID-19 Hub sets out that there should be no income tax/corporation tax implications for employers whose employees received TWSS payments.  The EWSS is taxable income for employers but a tax deduction is available to the employer for the portion of wages subsidised by the EWSS.  No special tax treatment applies to the Restart Grant and the grant is therefore taxable under general rules on the taxation of government grants and depends on if the grant was expended for capital or revenue purposes.  See the Institute’s COVID-19 Hub for more information.