Treasury Laws Amendment (Tax Incentives and Integrity) Act 2025

No. 29, 2025

An Act to amend the law relating to taxation, and for related purposes

Contents

1 Short title 1

2 Commencement 2

3 Schedules 2

Schedule 1—Luxury car tax 3

A New Tax System (Luxury Car Tax) Act 1999 3

Schedule 2—Denying deductions for interest charges 5

Income Tax Assessment Act 1997 5

Schedule 3—Extending ATO notification period for retaining refunds 6

Taxation Administration Act 1953 6

Schedule 4—$20,000 instant asset write-off for small business entities 7

Income Tax (Transitional Provisions) Act 1997 7

Treasury Laws Amendment (Tax Incentives and Integrity) Act 2025

No. 29, 2025

An Act to amend the law relating to taxation, and for related purposes

[Assented to 27 March 2025]

The Parliament of Australia enacts:

1 Short title

This Act is the Treasury Laws Amendment (Tax Incentives and Integrity) Act 2025.

2 Commencement 1

Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.

Commencement information	Commencement information	Commencement information
Column 1	Column 2	Column 3
Provisions	Commencement	Date/Details
1. Sections 1 to 3 and anything in this Act not elsewhere covered by this table	The day this Act receives the Royal Assent.	27 March 2025
2. Schedules 1 and 2	The first 1 January, 1 April, 1 July or 1 October to occur after the day this Act receives the Royal Assent.	1 April 2025
3. Schedule 3	The first 1 July to occur after the day this Act receives the Royal Assent.	1 July 2025
4. Schedule 4	The first 1 January, 1 April, 1 July or 1 October to occur after the day this Act receives the Royal Assent.	1 April 2025

Note: This table relates only to the provisions of this Act as originally enacted. It will not be amended to deal with any later amendments of this Act.

2

Any information in column 3 of the table is not part of this Act. Information may be inserted in this column, or information in it may be edited, in any published version of this Act.

3 Schedules

Legislation that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.

Luxury car tax

A New Tax System (Luxury Car Tax) Act 1999

1 Subsections 25-1(3) and (3A)

Repeal the subsections, substitute:

Luxury car tax threshold—general

3

(3) Subject to subsection (4), the luxury car tax threshold is:

a

$80,567 if the supply of the car occurs, or the car is *entered for home consumption, in the 2024-25 *financial year; or

b

if that supply, or entry for home consumption, is in a later financial year—the amount worked out for that financial year after indexing $80,567 annually using Subdivision 960-M of the *ITAA 1997.

2 Subsection 25-1(4)

Omit “7 litres”, substitute “3.5 litres”.

3 Subsection 25-1(6)

Repeal the subsection, substitute:

Indexation

6

In indexing the *luxury car tax threshold or *fuel-efficient car limit, Subdivision 960-M of the *ITAA 1997 applies as if:

a

the table in section 960-265 of that Act included an item referring to (as the case may be):

i

the luxury car tax threshold and subsection (3) of this section; or

ii

the fuel-efficient car limit and subsection (5) of this section; and

b

the reference in subsection 960-270(1) of that Act to provisions of that Act included a reference to subsection (3) or (5) of this section (as the case may be); and

c

the reference in subsection 960-280(2) of that Act to the car limit included a reference to the luxury car tax threshold or fuel-efficient car limit (as the case may be).

4 Application of amendments

Application of amendments—general

Continued application of old subsection 25-1(4) if car was used for certain purposes before 1 July 2025

Definitions

Act means the A New Tax System (Luxury Car Tax) Act 1999.

old subsection 25-1(4) means subsection 25-1(4) of the Act as in force immediately before the commencement of this Schedule.

1

The amendments made by this Schedule apply in relation to supplies, and importations, of cars on or after 1 July 2025.

2

However, old subsection 25-1(4) continues to apply, in relation to a supply or importation of a car on or after 1 July 2025, if, before that date:

a

an entity made a supply or importation of the car; and

b

the car was used in Australia for a purpose other than a purpose mentioned in subsection 9-5(1) of the Act.

3

In this item:

Denying deductions for interest charges

Income Tax Assessment Act 1997

1 Paragraph 25-5(1)(c)

Repeal the paragraph.

2 Subsection 25-5(7)

Repeal the subsection (including the note).

3 After subsection 26-5(1)

Insert:

1A

Without limiting paragraph (1)(a), you cannot deduct under this Act the *general interest charge or the *shortfall interest charge.

4 Application of amendments

The amendments made by this Schedule apply in relation to assessments for income years starting on or after 1 July 2025.

Extending ATO notification period for retaining refunds

Taxation Administration Act 1953

1 Paragraph 8AAZLGA(3)(a)

Repeal the paragraph, substitute:

a

in a case to which paragraph 8AAZLF(1)(a) applies:

i

(i) if the whole or part of the RBA surplus of the entity arises because of a credit that arises directly under the BAS provisions (Income Tax Assessment Act 1997)—the 16th day to occur after the RBA interest day (within the meaning of section 12AF of the Taxation (Interest on Overpayments and Early Payments) Act 1983) for the RBA surplus; oras defined in subsection 995-1(1) of the

ii

otherwise—the RBA interest day for the RBA surplus of the entity; or

2 After subsection 8AAZLGA(3)

Insert:

3A

For the purposes of subparagraph (3)(a)(i), the whole or part of the RBA surplus is taken to arise because of a credit if the whole or part of the RBA surplus would not arise but for the credit being allocated to the RBA.

3 Application provision

The amendments made by this Schedule apply in relation to RBA surpluses that arise on or after the commencement of this Schedule.

$20,000 instant asset write-off for small business entities

Income Tax (Transitional Provisions) Act 1997

1 Section 328-180 (heading)

Omit “30 June 2024”, substitute “30 June 2025”.

2 Subsection 328-180(1) (paragraph (b) of the definition of increased access year)

Omit “30 June 2024”, substitute “30 June 2025”.

3 Paragraph 328-180(4)(d)

Omit “30 June 2024” (wherever occurring), substitute “30 June 2025”.

4 Subparagraphs 328-180(5)(e)(ii) and (6)(e)(ii)

Omit “30 June 2024”, substitute “30 June 2025”.

[Minister’s second reading speech made in—

House of Representatives on 28 November 2024

Senate on 26 March 2025]

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