New tax laws introduced last week have given James Hardie Industries a break in its $1.6 billion settlement payout to asbestos victims.

The new law is to be backdated to July last year, and will give the Amsterdam-based Australian manufacturer a tax break from when the compensation deal was agreed in December.

The changes will allow businesses to claim tax deductions on costs commonly called “black hole expenditures”.

Under the December deal, James Hardie will pay up to 35% of yearly profits in compensation, providing the company obtains tax deductions on the settlement.

The Federal Government rejected calls to give the company special tax breaks, but has since said it should be able to take advantage of deductions for black hole expenditures.

Last year the taxation office declined a claim by Hardie for $500 million in tax deductions under the old law, but the company will again apply for a private ruling under the new laws.