CA ANZ, together with the other professional bodies, have lodged a joint submission with the Department of Treasury to address our main concerns with the legislative amendments contained in Schedule 1 to the Treasury Laws Amendment (2020 Measures No. 6) Act 2020 (the Amendments).

The Amendments are intended to provide businesses with flexibility to choose whether to apply the new full expensing of depreciating assets (FEDA) measure on an asset-by-asset basis. However, this flexibility is not available to small business entities (SBE). By the operation of the law, SBEs are required to fully expense their general small business pool (pool) balances on 30 June 2021 and cannot choose not to write off the pool balance.

The Joint Bodies recommend that the law be amended to provide SBE taxpayers with the same flexibility as larger businesses, and to ensure that larger businesses are not treated more favourably than SBEs, or those that are still subject to the pooling rules in Subdivision 328-D of the Income Tax Assessment Act 1997 after making a choice to exit Subdivision 328-D. Flexibility is sought for SBEs for both the FEDA measure and the Backing Business Investment incentive.