Small business energy incentive
The Treasury Laws Amendment (Support for Small Business and Charities, and Other Measures) Act 2024External Link provides businesses with an aggregated annual turnover of less than $50 million with access to a bonus deduction equal to 20% of the cost of eligible assets and improvements to existing assets that support more efficient energy use.
This is a temporary measure to support small businesses to improve their energy efficiency and save on energy bills. The bonus deduction applies to the cost of eligible assets and improvements up to a maximum amount of $100,000 with the maximum bonus deduction being $20,000.
To claim the bonus deduction for the small business energy incentive complete item 7 – label K – Small business energy incentive.
For more information, see Small business energy incentive.
Small business – $20,000 instant asset write-off
The Treasury Laws Amendment (Support for Small Business and Charities, and Other Measures) Act 2024External Link provides a temporary increase to the instant asset write-off threshold to support small business entities (with an aggregated annual turnover of less than $10 million).
Eligible small business entities are able to immediately deduct the full cost of eligible depreciating assets costing less than $20,000 that were first used or installed ready for use for a taxable purpose between 1 July 2023 and 30 June 2024.
The $20,000 threshold applies on a per asset basis, so small business entities can instantly write off multiple assets. Small business entities are also able to immediately deduct an eligible amount included in the second element of a depreciating asset's cost.
The 5-year 'lock out' rule is suspended until 30 June 2024. This rule prevented small business entities from re-entering the simplified depreciation regime if they opted out.
To claim a deduction under the instant asset write-off, complete item 6 – label X – Depreciation expenses and item 10 – label A – Deduction for certain assets.
For more information, see Small business support – $20,000 instant asset write-off.
Thin capitalisation
The Treasury Laws Amendment (Making Multinationals Pay Their Fair Share – Integrity and Transparency) Act 2024External Link amends thin capitalisation rules for income years starting on or after 1 July 2023.
Under the new thin capitalisation rules:
- The newly classified 'general class investors' will be subject to one of 3 new tests
- Fixed ratio test
- Group ratio test
- Third party debt test.
- Financial entities will continue to be subject to the existing safe harbour test and worldwide gearing test or may choose the new third party debt test.
- Authorised deposit-taking institutions (ADIs) will continue to be subject to the existing thin capitalisation rules.
- The arm’s length debt test will be removed.
These rules are supported by the new integrity rules – debt deduction creation rules, which will apply to assessments for income years starting on or after 1 July 2024.
If your clients answer Yes at item 29 – label O – Did the thin capitalisation provisions affect you?, on the Company tax return 2024, you must also complete and lodge an International dealing schedule 2024.
For more information, see Thin Capitalisation.
Trust income schedule
From the 2024 income year, if your clients received one or more distributions from trusts, they must complete a Trust income schedule 2024 and attach it to your company tax return. The trust income schedule details each distribution that you receive from trusts.
Complete the schedule if your clients report a distribution from a trust at:
- item 6 Calculation of total profit or loss – labels E, H.
- item 7 Reconciliation to taxable income or loss – label A.
- item 8 Financial and other information – labels G, R, B, U, V.
For information to help your clients complete the trust income schedule and who must complete the schedule, see Trust income schedule and instructions 2024.
Off-market share buy-backs and selective share cancellations
The Treasury Laws Amendment (2023 Measures No. 1) Act 2023External Link made changes to align the tax treatment of off-market share buy-backs undertaken by listed public companies with the treatment of on-market share buy-backs. It also made changes in respect of selective share cancellations undertaken by listed public companies.
As a result of these changes no part of the purchase price in respect of an off-market share buy-back undertaken by a listed public company is taken to be a dividend. In addition, a dividend distribution made by a listed public company that is consideration for the cancellation of a membership interest in itself, as part of a selective reduction of capital, is unfrankable.
A listed public company that undertakes an off-market share buy-back or selective share cancellation may be required to debit the balance of its franking account.
The changes apply to off-market buy-backs announced and undertaken by a listed public company after 7:30 pm (AEDT) on 25 October 2022, and to selective share cancellations announced and undertaken by a listed public company on or after 18 November 2022.
For listed public companies, amounts your clients enter at item 8 – label J – Franked dividends paid or label K – Unfranked dividends paid may be impacted by these changes.
For more information, see Improving the integrity of off-market share buy-backs.
Franked distributions funded by capital raisings
The Treasury Laws Amendment (2023 Measures No. 1) Act 2023External Link amends the Income Tax Assessment Act 1997 to add distributions funded by capital raisings to the list of distributions that are unfrankable.
For more information, see Franked distributions funded by capital raisings.
Offshore banking unit regime
The Treasury Laws Amendment (2021 Measures No. 2) Act 2021External Link amends Australia's Offshore Banking Unit (OBU) Regime. This change became law on 13 September 2021.
The government has removed the concessional tax treatment for OBUs in respect of offshore banking activities, effective from the start of the OBU’s 2023–24 income year.
Rules that deem an OBU to have only paid a fraction of its foreign income tax on its assessable OB income also no longer apply. This means you will need to calculate the foreign income tax offset (FITO) using the ordinary rules.
For interest paid on or after 1 January 2024, the government has also removed the interest withholding tax exemption for OBUs.
For more information, see Changes to Australia's Offshore Banking Regime.
AASB 17 accounting standard
The Treasury Laws Amendment (Support for Small Business and Charities, and Other Measures) Act 2024External Link amends Division 321 of the Income Tax Assessment Act 1997 to broadly align the treatment of general insurance contracts with the AASB 17 accounting standard.
This change to tax law allows general insurers to continue to use audited financial reporting information, calculated according to the new standard, as the basis for their tax returns. This measure is effective for income years starting on or after 1 January 2023.
New items in the Company tax return 2024
In the Company tax return 2024, the following labels have been added:
- Item 7 Reconciliation to taxable income or loss
- Label K Small business energy incentive
- Item 24 Digital games tax offset
- label A Current year refundable DGTO amount being claimed
- label B Total amount of current year DGTO already claimed or being claimed by related companies.
Removed items in the Company tax return 2024
In the Company tax return 2024, the following labels have been removed:
- Item 7 Reconciliation to taxable income or loss
- label L Small business technology investment boost
- label P Offshore banking unit adjustment
- Item 9 Capital allowances
- labels P to U – temporary full expensing opt out related labels
- Item 13 Losses information
- All tax loss carried back related labels (except labels U and V).