Federal Budget 2020-21: Competitiveness

  • Instant Asset Write-Off – Expanding full deductibility of eligible depreciable assets of any value (previously $150,000) for businesses with an aggregated annual turnover of up to $5 billion (previously $500 million) acquired from 6 October 2020 7:30 pm AEDT and first used or installed by 30 June 2022 (previously 31 December 2020). New or second-hand assets under the enhanced $150,000 instant asset write-off by 31 December 2020 will have an extra six months to first use or install those assets. 
  • Loss carry-backs – Tax losses incurred to 30 June 2022 for companies with a turnover of up to $5 billion can be offset against prior profits made in or after the 2018-19 financial year on which tax has been paid.  
  • Research and Development Tax Incentive – $2 billion in additional funding through removing the $4 million cap on annual cash refunds, lifting the rate for small claimants (turnover less than $20 million), increasing the cap on eligible R&D expenditure from $100 to $150 million per annum and streamlining the intensity tiers for larger claimants. The new rates will be the company tax rate plus 8.5 percentage points for initial R&D expenditure up to 2 per cent R&D intensity, and 16.5 percentage points for R&D expenditure above the 2 per cent R&D intensity. These measures will apply on or after 1 July 2021. 
  • Small business tax concessions – $105 million to increase the eligibility of businesses to access ten small business tax concessions (from a turnover of $10 to $50 million), e.g. immediately deduct start-up expenses, exemptions on Fringe Benefits Tax (FBT), simplified PAYG and GST rules, etc.