Temporary full expensing extension
Temporary full expensing measures will be extended to 30 June 2023. The measures allow eligible businesses with aggregated annual turnover of less than $5 billion to deduct the full cost of eligible depreciable assets of any value, acquired from 7:30pm AEDT on 6 October 2020 and first used or installed ready for use by 30 June 2023. From 1 July 2023, normal depreciation arrangements will apply.

Temporary loss carry-back extension
The temporary loss carry-back measures will also be extended by one year for companies with aggregated turnover of less than $5 billion. The extension will allow eligible companies to carry back tax losses from the 2022-23 income year to offset previously taxed profits in the 2018-19 or later years.

Companies may elect to receive a tax refund when they lodge their 2020-21, 2021-22 and 2022-23 tax returns. The refund will be limited by requiring that the amount carried back is not more than the earlier taxed profits, and that the carry back does not cause a franking account deficit.

Ordinarily, companies are required to carry losses forward to offset profits in future years. Companies that do not elect to carry back losses can still carry losses forward as normal.

Self-assessment of the effective life of intangible depreciating assets
The Government announced that it will allow taxpayers to self-assess the tax effective lives of eligible intangible depreciating assets, such as patents, registered designs, copyrights and in- house software from 1 July 2023. Taxpayers will continue to have the option of applying the existing statutory effective life to depreciate these assets.

New apprenticeship and trainee wage subsidies
The Government announced it will expand the current wage subsidies for businesses and Group Training Organisations. The measure will uncap the number of eligible places and increase the duration of the 50 per cent wage subsidy to 12 months from the date an apprentice or trainee commences with their employer.

From 5 October 2020 to 31 March 2022, businesses of any size can claim a wage subsidy for new apprentices or trainees who commence during this period. Eligible businesses will be reimbursed up to 50 per cent of an apprentice or trainee's wage of up to $7,000 per quarter for 12 months.

Excise refund for small brewers and distillers
The Government announced it will align the excise refund scheme for small brewers and distillers with the wine equalisation tax producer rebate. From 1 July 2021, eligible brewers and distillers will be able to receive a full remission (up from 60 per cent) of any excise they pay, up to a cap of $350,000 (increased from $100,000) per financial year.

Increased flexibility for visa holders in the tourism, hospitality and agriculture sectors
The Government announced they will temporarily allow student visa holders to work more than 40 hours per fortnight, as long as they are employed in the tourism or hospitality sectors.

This is further to the work limitation conditions lifted from 5 January 2021 allowing student visa holders to work more than 40 hours per fortnight if they are employed in the agriculture sector.

Tax treatment of storm and flood grants
An income tax exemption will be provided for qualifying grants made to primary producers and small businesses affected by the storms and floods in Australia, where those grants relate to the rainfall events between 19 February 2021 and 31 March 2021. These include small business recovery grants of up to $50,000 and primary producer recovery grants of up to $75,000.

Expanded SME Recovery Loan Scheme
The Government announced it will broaden and extend the SME Recovery Loan Scheme, following on from the previous Coronavirus SME Guarantee Scheme.

The Coronavirus SME Guarantee Scheme permitted loans of up to $250,000 over a 3-year term, with the Government guaranteeing half of the loan, which was then extended to a maximum loan amount to $1 million over a 10-year term.

The SME Recovery Loan Scheme extends the maximum loan amount to $5 million with a term of 10 years. Under the SME Recovery Loan Scheme, a maximum interest rate of 7.5% applies with the Government guaranteeing 80% of the loan.

To be eligible, SMEs, including self-employed individuals and non-profit organisations, must have a turnover of up to $250 million and have been either:

  • recipients of the JobKeeper Payment between 4 January 2021 and 28 March 2021
  • located or operating in a local government area that has been disaster declared as a result of the March 2021 New South Wales floods and were negatively economically impacted.

Tax concession for Australian medical and biotechnology innovations
The Government announced a patent box tax regime to tax corporate income derived from Australian medical and biotechnology patents at a concessional corporate tax rate of 17%. Profits generated by patents are currently taxed at the headline corporate rate (30% for large businesses and 25% for base rate entities from 1 July 2021).

The concession is expected to apply for income years starting on or after 1 July 2022.

Digital games tax offset
The Government announced that it will introduce a 30% refundable Digital Games Tax Offset for eligible businesses that spend a minimum of $500,000 on qualifying Australian games. Consultation with industry is expected to occur in mid-2021 to provide criteria for qualifying expenditure, however games with gambling elements will be ineligible.