For educational purposes only. Not tax, legal, or financial advice. Tax laws change frequently. Consult a registered tax agent or CPA for your specific situation.
Tax for Aboriginal and Torres Strait Islander Business Owners
Aboriginal and Torres Strait Islander business owners pay income tax on trading profit under the same rules as all Australians, but qualifying native title benefits are completely tax-free under ITAA 1997 s 59-50. The Indigenous Procurement Policy targets 3% of Commonwealth contract value for Indigenous businesses, and IBA provides concessional finance. Individuals in prescribed remote zones for at least 183 days can also claim a zone tax offset.
Last reviewed:
Guidance, not advice. We explain the rules, we don't assess your situation. Always seek financial or tax advice from your accountant, or contact ATO. Read our editorial scope →
Aboriginal and Torres Strait Islander peoples have the same core tax obligations as any other Australian sole trader or company director: income tax on trading profit, GST registration at $75,000 turnover, PAYG withholding if employing staff, and Super Guarantee on eligible workers. The critical difference is that qualifying native title benefits are non-assessable, non-exempt income under ITAA 1997 s 59-50, meaning they sit entirely outside the income tax system. Beyond that, the Indigenous Procurement Policy (IPP) sets a 3% Commonwealth contract value target for Indigenous businesses, Supply Nation certification opens corporate supply chains, and Indigenous Business Australia (IBA) provides concessional finance and advisory support. Zone tax offsets apply to individuals living in prescribed remote areas for at least 183 days.
The reality this serves
Aboriginal and Torres Strait Islander peoples who are self-employed, run small businesses, or receive native title payments, including artists, remote community enterprises, and Supply Nation registered suppliers.
Are native title payments taxable?
Qualifying native title benefits are non-assessable, non-exempt income under ITAA 1997 s 59-50. This covers amounts paid under agreements or compensation arrangements about acts that extinguish, impair, or are inconsistent with native title, plus compensation under the Native Title Act 1993. The exemption flows to Indigenous individuals and Indigenous holding entities (prescribed bodies corporate, land councils, CATSI Act corporations, eligible trusts). However, the exemption does not cover payments for administration costs, wages, consulting fees, or contracting income. These remain assessable. Income or gains from investing native title benefits (bank interest, investment returns, business profits generated using those funds) are also assessable in the usual way. In practice: genuine native title compensation received personally sits outside the tax net, but if that money becomes working capital in your business, the later business profits are taxed normally.
Qualifying native title benefits received by Aboriginal and Torres Strait Islander individuals or Indigenous holding entities are non-assessable, non-exempt income. Wages, consulting fees, and investment returns from those benefits remain taxable.(ITAA 1997 s 59-50; ATO guidance ATO native title and Indigenous income guidance)
How does the Indigenous Procurement Policy benefit my business?
The Commonwealth Indigenous Procurement Policy (IPP) requires at least 3% of total Commonwealth contract value to be awarded to Indigenous businesses. For contracts above $7.5 million in certain industries, Mandatory Minimum Indigenous Participation Requirements (MMR) apply, requiring Indigenous employment or subcontracting. To qualify, your business must be majority Indigenous owned and controlled (currently at least 50%, moving to 51% control for some supplier categories from 1 July 2026). Registration with Supply Nation and listing on AusTender makes your business visible to procurement officers actively seeking to meet IPP targets. Income from IPP contracts is ordinary assessable business income. There is no special tax rate or concession on that income. The benefit is access to work, not a tax advantage.
The IPP requires at least 3% of Commonwealth contract value to be awarded to Indigenous businesses. Income from these contracts is ordinary assessable business income.(Commonwealth Indigenous Procurement Policy (administered by NIAA); ATO guidance AusTender and Supply Nation registration guides)
What are the zone tax offsets for remote businesses?
Individuals who live in prescribed remote or very remote zones for at least 183 days in an income year may claim a zone tax offset that directly reduces tax payable. The offset amount depends on the zone classification (Zone A, Zone B, or Special Area within either zone). For many Aboriginal and Torres Strait Islander business owners operating in remote communities, this offset applies automatically once the residency threshold is met. Travel, accommodation, and freight costs for remote business operations are also deductible to the extent they are incurred in earning assessable income. In cash-heavy remote economies (markets, art centres, small retail), robust record-keeping is essential. The ATO Indigenous helpline (13 10 30), Tax Help volunteers, and National Tax Clinics provide free support where access to commercial accountants is limited.
Individuals living in prescribed remote zones for at least 183 days in the income year can claim a zone tax offset. The amount depends on zone classification.(ITAA 1936 s 79A and ITAA 1997 s 61-10; ATO guidance ATO zone tax offset and remote area guide)
How are government grants for Indigenous businesses taxed?
Business-related government grants are assessable income unless the program guidelines or enabling legislation explicitly state a tax exemption. This applies regardless of whether grants are federal, state, or local, and regardless of whether they target Indigenous businesses specifically. Start-up or expansion grants used for working capital are assessable in full when received. Capital grants used to buy depreciating assets are assessable, but the business can claim depreciation or the small business instant asset write-off ($20,000 per asset for 2025-26). Training grants paid directly to a provider (not to your business) may have no assessable component for you, because you never derive the income. IBA loans are not taxable income. Only a subsidy component or forgiven debt may have tax consequences. Business expenses funded by IBA are deductible or depreciable under normal rules.
Government grants to businesses are assessable income unless specifically exempted. IBA loans are not income, but forgiven debt may be assessable.(ITAA 1997 s 6-5 (ordinary income) and s 15-10 (bounties and subsidies); ATO guidance ATO grants and payments guide)
Allowable expenses in context
Aboriginal and Torres Strait Islander business owners claim deductions under the same rules as all Australian businesses. Art materials, studio costs, travel to exhibitions, gallery commissions, and marketing are deductible for artists operating commercially. Remote area freight and travel costs are deductible where incurred earning assessable income. Supply Nation certification and ORIC registration fees are deductible. Cultural obligations and customary payments are not automatically deductible; they must satisfy the standard test of being incurred in gaining assessable income and not being private or domestic in nature. IBA-funded business purchases (tools, vehicles, equipment) are deductible or depreciable normally regardless of funding source.
Support schemes
Indigenous Business Australia (IBA)
Eligibility: Aboriginal and Torres Strait Islander peoples starting, growing, or investing in businesses. Available to individuals and entities meeting IBA eligibility criteria.
Supply Nation Certification
Eligibility: Businesses that are majority Aboriginal and Torres Strait Islander owned and controlled (at least 50%, moving to 51% for some categories from 1 July 2026). Must be registered with Supply Nation or ORIC.
Native Title Benefits Exemption
Eligibility: Aboriginal and Torres Strait Islander individuals and Indigenous holding entities (prescribed bodies corporate, land councils, CATSI Act corporations, eligible trusts) receiving qualifying native title benefits.
Zone Tax Offset (Remote Areas)
Eligibility: Individuals living in a prescribed zone (Zone A, Zone B, or Special Area) for at least 183 days in the income year.
ATO Indigenous Support Services
Eligibility: All Aboriginal and Torres Strait Islander individuals and small businesses. No income test or registration requirement.
Frequently asked questions
Do I need to declare native title payments on my tax return?+
Qualifying native title benefits under ITAA 1997 s 59-50 are non-assessable, non-exempt income. You do not include them as assessable income in your tax return. However, any wages, consulting fees, or investment returns earned from those funds are assessable normally. Keep documentation from the distributing entity that identifies which payments are native title benefits and which are other income.
Is income from art sales taxable for Aboriginal artists?+
Yes. Income from selling artworks, performances, cultural tours, workshops, and design licences is assessable business income if the activity is carried on commercially (regular sales, intent to profit, proper records). You can claim deductions for materials, studio costs, travel to exhibitions, gallery commissions, and marketing. Sales through art centres are assessable to the artist for their share of proceeds.
How do I register as an Indigenous business for government contracts?+
Register with Supply Nation (supplynation.org.au) for access to the Indigenous Business Direct directory used by Commonwealth agencies and corporate buyers. Your business must be majority Aboriginal and Torres Strait Islander owned and controlled (at least 50%, moving to 51% for some categories from 1 July 2026). Also register on AusTender for Commonwealth contracts. Registration fees are deductible business expenses.
Are IBA business loans taxable when received?+
No. IBA loans are not assessable income. Only a subsidy component or forgiven debt portion may have tax consequences. Business assets purchased with IBA funds (vehicles, equipment, fit-out) are deductible or depreciable under normal rules, the same as any other business purchase regardless of funding source.