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Last updated 17 February 2020

Simplifying tax obligations for business

The Commissioner has released Practice Statement PS LA 2003/8 Practical approaches to low-cost business expenses for taxpayers carrying on a business. The practice statement provides guidance on two straightforward methods that can be used by taxpayers carrying on a business to help determine whether expenditure incurred to acquire certain low-cost items is to be treated as revenue or capital.

Subject to certain qualifications, the two methods cover expenditure below a threshold and the use of statistical sampling to estimate total revenue expenditure on low-cost items. The threshold rule allows an immediate deduction for qualifying low-cost business items costing $100 or less. The sampling rule allows taxpayers with a low-value pool to use statistical sampling to determine the proportion of the total purchases on qualifying low-cost business items that are revenue expenditure.

A deduction for expenditure incurred on low-cost assets calculated in accordance with this Practice Statement will be accepted by tax officers.

Foreign exchange (forex) gains and losses

New measures have been introduced which set out new rules on the taxation of forex gains and losses and the manner in which tax-relevant foreign currency amounts are to be converted into Australian dollars.

For more information on the forex measures, visit the Tax Office website at