There has been another important development in the Government’s 2026 tax reform package.
The Treasury Laws Amendment (Tax Reform No. 2) Act 2026 received Royal Assent on 26 August 2026.
For businesses, there are two key changes worth knowing:
1. $20,000 instant asset write-off made permanent effective 1 July 2026.
Small businesses with aggregated annual turnover of less than $10 million will be able to immediately deduct the cost of eligible assets costing less than $20,000.
Importantly, the $20,000 threshold applies per asset, meaning an eligible business can claim the immediate deduction for multiple assets.
This removes some of the uncertainty businesses have faced in recent years waiting to see whether the temporary threshold would be extended.
2. Two-year company loss carry-back returns
Loss carry‑back enables eligible companies to offset a loss against tax paid up to two years earlier, generating a refundable tax offset.
The measure applies for income years starting on or after 1 July 2026 and is available to corporate tax entities that are not significant global entities.
There are limitations, including that the measure applies to revenue losses and the refund is constrained by the company’s franking account balance.
Why does this matter?
These changes may create useful tax planning and cash-flow opportunities for eligible businesses.
For businesses considering asset purchases, managing a temporary downturn or reviewing their broader tax position, the timing of expenditure and availability of prior-year tax losses could have a meaningful impact on the outcome.
If you have any questions about how these changes may apply to your business, please contact us to discuss.
