Temporary full expensing available for businesses

Last October, the government announced the JobMaker Plan to support businesses. One of these incentives is temporary full expensing.

In their 2020–21 and 2021–22 income years, eligible businesses can immediately deduct the:

  • business portion of the cost of eligible new depreciating assets
  • cost of improvements to existing assets.

If your business’s aggregated turnover is less than $5 billion, you can use temporary full expensing.

If you can claim an immediate deduction for an asset under temporary full expensing, you cannot claim it using other depreciation rules (such as backing business investment – accelerated depreciation).

If temporary full expensing does not apply to you, you may be able to claim a deduction under backing business investment – accelerated depreciation or instant asset write-off.

If you have a company, you may make a tax loss in an income year as a result of claiming an immediate deduction under temporary full expensing.
If you make a tax loss and you’re eligible, you can choose to either:

  • carry your loss forward to use it to offset its future income
  • have a refundable tax offset under loss carry back.

You claim temporary full expensing in your tax return:

  • The ATO is updating 2020–21 tax return forms to ensure they are ready for 1 July 2021.
  • If your business is going to lodge your 2020–21 company tax return before 1 July 2021, we are working through how you can make a temporary full expensing claim.

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