Instant Write-off for Small Businesses

Small businesses whose aggregated turnover is up to $10 million who decides to purchase an asset up to and including $20,000 (excluding GST) for business purposes can access an instant asset write-off. This was originally legislated from 1 July 2026 to revert to $1,000, however this has now been reversed.

Assets valued at $20,000 or more can continue to be placed into the small business simplified depreciation pool. The lock-out rules that prevent small businesses from re-entering the simplified depreciation pool for 5 years after they have opted out will continue to be suspended until 30 June 2027.

PAYG Instalments for Small Medium Enterprises

From 1 July 2027, small and medium businesses will have the option to report and pay PAYG instalments on a monthly basis rather than a quarterly or annual basis. Businesses can use an ATO-approved calculation embedded in accounting software to calculate and vary their instalments.

Note: businesses with a history of non-compliance will be required to report and pay PAYG instalments on a monthly basis.

Loss Carry-back for Businesses and Start Ups

From 1 July 2026, companies with an aggregated turnover of less than $1 Billion dollars will be able to carry back tax losses, resulting in an offset against tax paid up to 2 years earlier. Only revenue losses will be eligible, and the carryback will be limited by the company’s franking account balance. This will be like a loss carryback during the period of COVID, where businesses were able to carry back losses to offset earlier tax paid.

From 1 July 2028, for a start-up business whose turnover is less than $10 million and makes a tax loss in the first 2 years of operation will be able to generate a refundable tax offset. The tax offset received by the business is limited to the amount paid in FBT and withholding tax on wages paid to Australian employees in the years the loss was made. This means the business will not be paying withholding tax or FBT; instead, it will be paid by the government when the business is making a loss.

Changes to the Electric Car Fringe Benefits 

5 May 2026, the government released their review on zero-emission vehicles (ZEV) regarding FBT discounts and changes, which will not have an impact on existing leases.

From 1 April 2029, a permanent 25% discount on fringe benefits will be available for all electric vehicles valued up to and including the fuel-efficient luxury car tax threshold.

The table below will show the three phases which have been implemented

The LCT threshold for the 2025-26 financial year for a fuel-efficient vehicle is $91,387

The existing FBT 20% statuory rate will continue for all other cars. Including EV's, they cast more than the fuel efficiency LCT threshold.  

Trust Distributions

From 1 July 2028, trustees will pay a minimum tax of 30% on the taxable income of discretionary trusts. Beneficiaries (other than corporate beneficiaries, i.e. companies or other trusts) will receive non–refundable credits for tax payable.

This minimum tax of 30% will not affect other types of trusts, such as fixed and widely held trusts (including fixed testamentary trusts), complying superannuation funds, special disability trusts and deceased estates.

Corporate beneficiaries will not be eligible to receive the credit and will be assessed based on the trust income to which they are entitled. This will prevent double taxation of this income.

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