1. Use the permanent $20,000 instant asset write-off
The Treasury Laws Amendment (Tax Reform No. 2) Act 2026 received Royal Assent on 26 August 2026.
The Act permanently introduces a $20,000 instant asset write-off for eligible small businesses from 1 July 2026.
According to the Australian Taxation Office (ATO), a business may qualify where:
- Its aggregated annual turnover is under $10 million.
- The asset is a qualifying depreciating asset.
- The asset costs less than $20,000.
- The asset is first used, or installed ready for use, from 1 July 2026.
- The asset is used for a taxable business purpose.
The threshold applies per asset. This means you may be able to immediately deduct several separate eligible assets, provided each asset remains below the threshold.
For example, an Australian digital agency could purchase eligible computers, office equipment and software-related hardware during the same year. Each asset must be assessed separately and supported by accurate purchase and use records.
Check these records before claiming
Maintain:
- Supplier invoices.
- Payment evidence.
- The date the asset was first used or installed.
- The business-use percentage.
- Asset descriptions and serial numbers.
- Evidence that the asset remains eligible under the simplified depreciation rules.
Do not treat the write-off as an automatic deduction for every purchase. Correct classification and record-keeping will help you avoid an incorrect claim during an ATO review.
2. Model the new loss carry-back rules
The Act also reintroduces a loss carry-back tax offset for eligible corporate tax entities from income years beginning on or after 1 July 2026.
The ATO’s loss carry-back guidance confirms that eligible companies may carry back a revenue tax loss against income tax paid in either or both of the previous two income years.
Key conditions include:
- The company must be an eligible corporate tax entity.
- Aggregated annual global turnover must be below $1 billion.
- The loss must be a revenue loss, not a capital loss.
- The offset is limited by tax previously paid.
- The company’s franking account balance also affects the available offset.
- The company must meet its lodgement and other tax obligations.
For a standard 30 June balancing company, the first relevant income year is generally 2026–27.
This measure could improve cash flow for Australian businesses that previously paid tax but later experience a temporary loss. It may be particularly relevant to growing ecommerce brands, SaaS companies, agencies and other digital businesses investing heavily in technology, staff or expansion.
Prepare before lodging the 2026–27 return
Create a forecast showing:
- Prior-year taxable income and tax paid.
- Expected 2026–27 revenue loss.
- Available franking account balance.
- The potential refundable tax offset.
- Any restrictions caused by ownership, integrity or lodgement requirements.
Do not wait until year-end to review this. Accurate monthly bookkeeping will make the calculation more reliable. Our banking and transaction-recording support can help keep the underlying data organised.
3. Respond quickly to the ATO’s debt collection push
The ATO is increasing collection activity against a debt book reported at approximately $115 billion. Reporting from news.com.au and AccountantsDaily highlights the stronger enforcement environment.
Australian businesses should expect closer attention to overdue:
- GST and BAS liabilities.
- PAYG withholding.
- Superannuation obligations.
- Income tax debts.
- General Interest Charge (GIC).
The ATO may use several enforcement tools.
Director Penalty Notices
A Director Penalty Notice can make company directors personally liable for certain unpaid:
- PAYG withholding.
- Net GST.
- Superannuation Guarantee Charge.
A standard DPN generally gives the director 21 days from the date of the notice to act. Depending on the circumstances, options may include paying the amount, entering an acceptable arrangement, appointing an administrator, using small business restructuring or commencing winding-up proceedings.
If reporting or payment obligations remain outstanding for too long, a lockdown DPN may limit the options available to the director. This is why you should lodge BAS, IAS and superannuation statements on time, even where full payment is not immediately possible.
Garnishee notices
The ATO can issue garnishee notices to recover money from bank accounts or third parties that owe money to the taxpayer. For an ecommerce business, this may create serious disruption if funds held by a payment provider or merchant facility are affected.
Credit reporting for debts over $100,000
The ATO may disclose eligible business tax debts to credit-reporting bureaus where the business:
- Has an ABN.
- Owes at least $100,000.
- Has a debt overdue by more than 90 days.
- Is not effectively engaging with the ATO.
The business should generally receive a notice of intent to disclose and a period to respond. A formal payment arrangement or valid dispute may help prevent disclosure, but you should act before the matter escalates.
Prepare stronger evidence for interest remission
On-the-spot GIC waivers are now capped at approximately $4,500. Larger requests require specialist review.
The Tax Ombudsman has also called for fairer and more consistent treatment of GIC remission. Its 2026 review notes concerns about inconsistent decisions and supports interest-free payment plans for eligible taxpayers who maintain compliant arrangements.
Keep evidence of:
- Cash-flow difficulties.
- ATO errors or delays.
- Previous attempts to pay.
- Payment arrangements.
- Corrective action taken.
- The reasons for late payment.
Early engagement is essential. Do not ignore an ATO notice.
4. Review software royalty withholding tax obligations
Australian businesses that import or license software from overseas should carefully review their withholding tax obligations. Payments for rights to use software may be subject to royalty withholding tax where the payment is for the right to use a copyright.
This can apply to payments for:
- Software licenses.
- Cloud-based solutions where a copyright right is transferred.
- Software bundled with hardware.
- Ongoing software subscription fees.
The rate is generally 30% for payments to non-residents, unless a tax treaty reduces the rate. Where the payment is made to a resident of a country with which Australia has a tax treaty, the rate may be reduced or eliminated, provided the relevant requirements are met.
Common application scenarios include businesses using overseas payroll platforms, CRM systems, ecommerce marketplaces or subscription tools where the payment is for a copyright right rather than purely for the use of a server.
Review your contracts and payment flows
Speak with your tax adviser about:
- Whether your contracts expressly grant a copyright right.
- Whether the payment is for software or for services.
- Whether the supplier has provided a valid residency certificate.
- Whether a withholding obligation arises and at what rate.
If you have already made payments without withholding, consider whether the new penalty and interest framework applies or whether voluntary disclosure is appropriate.
5. Track crypto asset transactions
Australian businesses that accept or trade crypto assets face several tax and reporting issues.
The ATO continues to treat cryptocurrency as a CGT asset for tax purposes, unless it is held as an income asset. This means that capital gains tax (CGT) may apply on disposal, while businesses that trade crypto as part of their ordinary activities may be subject to ordinary income tax.
Businesses that accept crypto for goods or services must record the market value in Australian dollars at the time of receipt. This amount forms the basis for both income recognition and the CGT cost base of the asset received.
Where a business disposes of crypto, the following records should be kept:
- Date of receipt and disposal.
- Market value at the time of receipt.
- Market value at the time of disposal.
- Any fees or commissions charged.
- Wallet addresses and transaction IDs where practical.
- Purpose of the transaction.
For a business that trades crypto as part of its ordinary activities, the trading stock rules may apply. This requires valuation of closing stock at the end of the income year.
Software used by digital businesses may need to reflect crypto-specific reporting. If you use an accounting tool that does not separately track crypto, consider adding a separate ledger or code.
6. Check Salary Sacrifice and FBT arrangements
For September, employers should review any salary packaging arrangements and their fringe benefits tax (FBT) obligations.
Common issues include:
- Incorrect classification of benefits.
- Incorrect FBT treatment of car parking.
- Not reporting entertainment or property fringe benefits.
- Failing to keep records of salary sacrifice elections.
One area frequently missed is the FBT treatment of remote or home-office equipment. Where an employer provides technology or furniture for work use at home, a minor benefit exemption may apply if the value is less than $300 (or such other amount as may be indexed). However, where the value exceeds the minor benefit threshold or the benefit is not infrequent, FBT may apply.
Another area is the exempt property benefit for certain portable electronic devices. For these to be exempt, the devices must be used primarily in the employee’s employment and the exemption generally applies to one device of each type per FBT year per employee. The device must also be provided for the employee’s personal use and not form part of a salary sacrifice arrangement that trades cash for the benefit.
Where a salary packaging arrangement is offered, ensure that the employee election is made in writing before the benefit is provided. Retrospective elections can invalidate the tax-effective treatment of the arrangement.
For any benefit that is subject to FBT, you must:
- Calculate the taxable value correctly.
- Account for GST credits correctly.
- Report the grossed-up amount on the payment summary or income statement where applicable.
- Lodge the FBT return by the due date (generally 21 May following the FBT year ending 31 March).
Reviewing your FBT processes now will help prevent surprises at year-end.
What to do now
Before the end of September, take the following steps:
- Review your current asset register to identify assets acquired from 1 July 2026 that qualify for the $20,000 instant asset write-off.
- Create a loss carry-back forecast if your business experienced a prior profit and expects a current-year loss.
- Review all outstanding ATO obligations and respond to any notices immediately.
- Examine any software licensing agreements with overseas suppliers for withholding obligations.
- Check that your crypto transaction records are complete and accurate.
- Review salary packaging arrangements to ensure elections are valid and records are complete.
Engaging with a qualified tax adviser is strongly recommended due to the technical nature of these measures. Each business’s circumstances differ, and the correct application of the rules depends on accurate facts and records.
Disclaimer: This article provides general information only and does not constitute financial or taxation advice. You should consult a registered tax agent or qualified professional for advice tailored to your specific situation.
