Legislation for key tax incentives contained in the Federal Budget has passed through the Federal Parliament without amendments.
The Treasury Laws Amendment (A Tax Plan for the COVID-19 Economic Recovery) Bill 2020 implements a number of the 2020-21 Budget announcements including:
- From July 2020, increase the top threshold of the 19% personal income tax bracket from $37,000 to $45,000;
- From July 2020, increase the top threshold of the 32.5% tax bracket from $90,000 to $120,000;
- Retain the low and middle income tax offset (maximum $1,080) for the 2020-21 income year;
- Allow corporate tax entities with an aggregated turnover of less than $5 billion to carry back tax losses from the 2019-20, 2020-21 or 2021-22 income years to offset previously taxed profits in 2018-19 or later income years;
- Allow businesses with an aggregated turnover of less than $5 billion to deduct the full cost of eligible depreciating assets that are first held, and first used or installed ready for use for a taxable purpose, between 6 October 2020 and 30 June 2022;
- Expand a range of tax concessions currently available to small businesses (aggregated annual turnover under $10 million) to be made available to medium sized businesses with an aggregated annual turnover of less than $50 million; and
- Reform the R&D Tax Incentive and improve the administrative framework supporting the R&D Incentive, including making information about R&D expenditure claims transparent, enhancing the guidance framework to provide certainty to applicants and streamlining administrative processes.
The Bill will now be sent for Royal Assent by the Governor-General.
View our Federal Budget summaries to find out how the budget might impact you.
If you need further information or advice specific to your circumstances, please get in touch with the team at Cutcher & Neale.