Taxation measures - Australian Taxation Office
Extension to 30 June 2020 and Increase of the Instant Asset Write-off
On 2 April 2019, the Treasurer, the Hon. Josh Frydenberg MP, as part of the 2019-20 Budget, announced the increase of the instant asset write-off from $25,000 to $30,000, and an increase in the business turnover threshold from $10 million to $50 million.
The legislative amendment enacting this change, the Treasury Laws Amendment (Increasing the Instant Asset Write-off for Small Business Entities) Act 2019 received Royal Assent on 6 April 2019. Under the legislation, the changes to the Instant Asset Write-off and turnover thresholds apply from the time of the announcement, 7:30 pm on 2 April 2019.
This measure allows eligible small businesses, including those in primary production, to continue claiming a full deduction for business assets in the year they are purchased and/or installed, helping those businesses to improve their planning and cash flows. The table below provides the applicable dates of the level of Instant Asset Write‑off and business turnover thresholds.
|Instant Asset Write-off Threshold||Turnover Threshold|
|Prior to 29 January 2019||$20,000||$10 million|
|29 January to prior to 7:30 pm, 2 April 2019||$25,000||$10 million|
|From 7:30 pm, 2 April 2019 to 30 June 2020||$30,000||$50 million|
More information on the change to the instant asset write-off is available on the Australian Taxation Office’s website.
Immediate deductions for fodder storage assets
Primary producers may be able to immediately deduct (rather than depreciate over three years) the cost of fodder storage assets, such as silos and hay sheds used to store grain and other animal feed, making it easier for them to invest in and stockpile fodder. Primary producers who store fodder for sale may also be entitled to this deduction.
This measure is available for fodder storage assets first used or installed ready for use on or after 19 August 2018.
For more information, refer to the government’s media release.
Income tax averaging
Primary producers can, from 1 July 2017, re-commence income averaging 10 years after opting out. Prior to this amendment, a primary producer who had opted out of income averaging could not return to the arrangement.
Primary producers who opted out of income averaging for the 2006–07, or an earlier financial year, will be opted back in to income averaging for the first financial year after 2016–17 in which their taxable primary production income is greater than that for the previous financial year.
The legislative amendment enacting this change, the Tax and Superannuation Laws Amendment (2016 Measures No. 2) Act 2017 received Royal Assent on 28 February 2017. More information is available at Tax averaging for primary producers (Australian Taxation Office website).
Primary producers affected by drought and natural disasters
The Australian Taxation Office can help people affected by drought and other natural disasters with:
- more time to pay
- waiving penalties or interest charged at a time you were affected by drought
- payment plans with interest free periods
- adjusting pay as you go (PAYG) instalments to better suit your circumstances
- tax incentives for primary producers.
More information is available at the Australian Taxation Office website, on:
In special circumstances, the Commissioner for Taxation may release individuals from payment of income tax, fringe benefits taxes and some other taxes where it is shown that payment would cause serious hardship.
The Tax Office will look at circumstances on a case–by–case basis.
There are a number of taxation measures and concessions available to drought–affected primary producers. These include:
- profit from the forced disposal or death of livestock
- proceeds from double wool clips
- insurance recoveries.
There are also a number of other tax concessions available to primary producers, regardless of their location or if they are in hardship, that can be broadly classified as tax offsets, tax deductions and concessional treatments.
Primary producers, given their highly variable income streams and remote location, can use these mechanisms to lessen their tax burden. These include:
These relate to expenses that directly facilitate earning income and reduces assessable income. These include:
- Farm Management Deposits Scheme
- accelerated depreciation for water and fodder infrastructure and fencing
- depreciating assets
- water facilities deductions
- horticultural plants
- carbon sink forests
- electricity connections and telephone lines for small businesses
- forestry managed investment scheme
These relate to a variety of assistance measures for individuals such as deferrals of tax liability that can help to reduce an individual’s assessable income in the current financial year. These include:
- fuel tax credits
- luxury car tax refund
- reduction in fringe benefits tax
- small business entity tax concessions
For further information on these measures contact the Australian Taxation Office on 13 28 66.
- For drought assistance, contact the Australian Taxation Office Drought hotline on 1800 806 218 or visit Drought help on the Australian Taxation Office website for further information.
- For small business and primary producer assistance, phone the Australian Taxation Office business enquiries line on 13 28 66 or visit Primary producers on the Australian Taxation Office website.