Small But Mighty
The tax incentive passed through the Senate on Thursday, the final Parliamentary sitting day for 2025, in the last flurry of bills before the Christmas break.
Source: AAP Image/Mick Tsikas
The instant asset write-off for 2025-26 has passed into law, giving small businesses the right to immediately deduct the value of eligible business purchases in the current financial year.
Its latest iteration allows small businesses with an aggregated turnover below $10 million to fully write off the cost of eligible depreciating assets costing less than $20,000.
In a joint statement, Small Business Minister Anne Aly and Treasurer Jim Chalmers said some 4.1 million small businesses could benefit from the measure.
The tax incentive passed through the Senate on Thursday, the final Parliamentary sitting day for 2025, in the last flurry of bills before the Christmas break.
That marks a departure from some years in the recent past, where instant asset write-off extensions have passed into law perilously close to the end of the financial year, limiting their utility for cash-strapped SMEs.
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While welcoming its passage into law and the certainty it will provide small businesses making major spending decisions, Chartered Accountants Australia and New Zealand (CA ANZ) called for future reforms.
“This extension is a positive step, but the ongoing uncertainty around the instant asset write-off each financial year creates unnecessary uncertainty for small business owners,” said Susan Franks, tax and superannuation leader at CA ANZ.
Year-long extensions passed by the government of the day mean the policy is “clouded with uncertainty”, she continued, saying “a more concrete solution needs to be found”.
CA ANZ has long called for a permanent extension to the policy, making it a standard part of the small business taxation system.