Economic stimulus measures
The government implemented a number of measures to help businesses recover from the impact of the coronavirus pandemic (COVID-19).
Most of these measures relate to claiming tax concessions, deductions, and depreciation of assets at tax time. They will support businesses through the economic impacts of COVID-19 for the 2020–21,2021–22 and 2022–23 income years.
We will continue to update this page as guidance becomes available.
On this page
Loss carry back
Loss carry back provides a refundable tax offset that eligible corporate entities (companies, corporate limited partnerships and public trading trusts) can claim in their 2020–21,2021–22 and 2022–23 company tax returns.
Eligible corporate entities can choose to carry back losses made in the 2019–20, 2020–21, 2021–22 and 2022–23 income years to the 2018–19 and later income years in which there was an income tax liability. Refer to the Loss carry back tax offset flow chart (PDF, 300KB)This link will download a file.
Loss carry back is intended to interact with temporary full expensing. This encourages new investment which may result in tax losses. The choice to carry back tax losses may result in a tax refund and an increase in business cash flow.
You can use the loss carry back tax offset tool to work out if you are eligible to claim the refundable tax offset. It also calculates the maximum amount you can choose to claim if you are eligible. The tool will provide you with a printable report that you can keep for your records. This report will help you complete your company tax return as it displays each label you need to complete to make your claim.
Listen to our podcast: Episode 32 – JobMaker Plan Part 2: Economic support measures.
Temporary full expensing
Eligible businesses with an aggregated turnover of less than $5 billion can deduct the business portion of the cost of eligible new depreciating assets that are first held and first used or installed ready for use for a taxable purpose, between 7.30pm (AEDT) on 6 October 2020 until 30 June 2023. Corporate tax entities that do not meet the $5 billion aggregated turnover test can access temporary full expensing if they satisfy an alternative income test.
For small and medium sized businesses (aggregated turnover of less than $50 million), temporary full expensing also applies to the business portion of eligible second-hand depreciating assets.
Businesses can also apply temporary full expensing to the business portion of the cost of improvements made to eligible depreciating assets. This applies even if those assets were acquired before 7.30pm (AEDT) on 6 October 2020.
If you don't claim a deduction for an asset under temporary full expensing, you may be able to claim a deduction under:
You can also read our guidance on how to opt out of temporary full expensing.
Listen to our podcast: Episode 32 – JobMaker Plan Part 2: Economic support measures.
Backing business investment – accelerated depreciation
From 12 March 2020 until 30 June 2021, eligible businesses with an aggregated turnover of less than $500 million (in the year they are claiming the deduction), may be able to deduct the cost of new depreciating assets at an accelerated rate. Refer to Backing business investment – accelerated depreciation.
You can't claim accelerated depreciation for an asset if you claim deductions for it under:
You can also read our guidance on how to opt out of backing business investment – accelerated depreciation.
Instant asset write-off
From 12 March 2020 until 30 June 2021, eligible businesses with an aggregated turnover of less than $500 million can use the instant asset write-off for:
- each asset purchased by 31 December 2020, and
- costing less than the $150,000 threshold.
Instant asset write-off will apply for assets first used or installed ready for use until 30 June 2021, if you don't claim a deduction under temporary full expensing.
For example, if you have an aggregated turnover of $50 million or more, instant asset write-off may still apply to the cost of:
- second-hand assets purchased between 7.30pm AEDT on 6 October 2020 and 31 December 2020
- assets you entered into a commitment to hold, construct or use before 7.30pm AEDT on 6 October 2020 (which are assets excluded from temporary full expensing).
Interaction of tax depreciation incentives
Eligible businesses may want to know which tax depreciation incentive is right for them, visit Interaction of tax depreciation incentives.
We have prepared a high-level snapshot to help you work out how temporary full expensing, backing business investment or instant asset write-off may apply to you.
Increasing the small business entity turnover threshold
Eligible businesses with an aggregated turnover of less than $50 million can access certain small business concessions from 1 July 2020 and 1 July 2021. This expansion includes access to fringe benefits tax related exemptions on benefits provided on or after 1 April 2021.
JobMaker Hiring Credit
Eligible businesses can receive payments for new positions they create and fill with eligible employees between 7 October 2020 and 6 October 2021. If eligible, you need to register, nominate your eligible additional employees and claim. Refer to JobMaker Hiring Credit.
Supporting your small business
We offer a range of tools and services to make it easier for your small business to get your tax and superannuation right. We want to help you manage and grow your business and get back on track if you need to, refer to:
Authorised by the Australian Government, Canberra.
Temporary measures and tax incentives have been introduced to support businesses through the economic impacts of COVID-19 for 2020–21, 2021–22 and 2022–23.