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 Federal Budget 2021

Several significant initiatives have been announced to better benefit company taxpayers. These policies will encourage firms to invest and expand and eliminate unintended consequences and lower compliance costs. Today I am going to share some of those measures with you. 


Extension of temporary full expensing measure


A one-year extension of the “temporary full expensing” policy established in last year’s Federal Budget has been announced to encourage company investment and job creation.


This measure will allow eligible businesses:

  • those with an aggregated turnover of less than $5 billion or corporate tax entities that meet an alternative $5 billion total income test
    • to deduct the full cost of eligible depreciating assets purchased after 7:30 p.m. (AEDT) on the 6th of October 6 2020, and first used or installed ready for use by the 30th of June 2023. 


Normal depreciation rules will apply from the 1st of July 2023.


One more year of loss carry-back rules 


The government has also announced that the temporary loss carry-back measure announced in the 2020-21 Federal Budget will be extended:

  • to allow eligible businesses (with a combined turnover of less than $5 billion) to carry-back tax losses from the 2022-23 income year,
  • to offset previously taxed profits as far back as the 2018-19 income year when filing their 2022-23 tax return. 
  • As a result, qualified businesses will use tax losses from 2019-20, 2020-21, 2021-22, and now the 2022-23 fiscal years to offset tax paid in the 2018-19 and subsequent fiscal years. 
  • There are no additional modifications to the loss carry-back offset eligibility, so it’s still only available to businesses.

Want to find out more about the new measures announced in part with the Federal Budget 2021. Head over to our blog to find out more helpful information or contact us to find more information. 

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