THE HON JOSH FRYDENBERG MP
10 December 2020
MORRISON GOVERNMENT DELIVERS EXPANDED ACCESS TO FULL EXPENSING FOR BUSINESSES
The Morrison Government today passed legislation through the Parliament to expand eligibility for the temporary full expensing measure to help create more jobs and to ensure more businesses can recover faster from the economic impact of COVID-19.
The legislation expands access to the full expensing incentive to enable more large Australian-based businesses with a track record of investing in Australia to be eligible for the measure.
Full expensing temporarily allows businesses with an aggregated turnover of less than $5 billion to deduct the full cost of eligible depreciable assets of any value in the year they are first used or installed.
The legislation introduces a new alternative test for temporary full expensing. To satisfy the new test, companies must have:
- less than $5 billion in total statutory and ordinary income (excluding non-assessable non-exempt income) in either the 2018‑19 or 2019‑20 income year; and
- invested more than $100 million in tangible depreciating assets in the period 2016‑17 to 2018‑19.
This change means that companies with an aggregated turnover of more than $5 billion due to the income of an overseas parent or associate will now be able to qualify provided they meet the additional investment requirements.
Businesses can also now opt out of temporary full expensing and the backing business investment incentive on an asset‑by‑asset basis.
This change gives businesses more flexibility in respect of these measures, removing a potential disincentive for them to take advantage of the support on offer.
The temporary full expensing measure is a key element of the Morrison Government’s Economic Recovery Plan, which will incentivise investment, help create jobs and further strengthen our economic recovery.