The Australian Government has now legislated the Small Business and General Business Tax Break. Businesses will now be entitled to an additional upfront tax deduction for qualifying asset purchases if they pass certain requirements. This is on top of the usual capital allowance depreciation (or pooling) amounts claimed.
Requirements for Small Businesses (annual turnover of less than $2 million)
- A small business must commit to investing in a NEW (not 2nd Hand) tangible depreciating asset (e.g motor vehicles, plant & machinery, expensive office equipment)
- with a cost greater than $1,000
- purchased between 13/12/08 and 31/12/09
- and first uses the asset, or installs it ready for use, or (in the case of new investment in an existing asset) brings the asset to its modified or improved state on or before 31/12/10.
- The additional deduction is 50% of the cost of the eligible asset/s.
Other Business Entities (annual turnover over $2 million) (differences underlined)
- The business must commit to investing in a NEW (not 2nd Hand) tangible depreciating asset (e.g motor vehicles, plant & machinery, expensive office equipment)
- with a cost greater than $10,000 (note: much larger for non small businesses)
- if purchased between 13/12/08 and 30/06/09 and first uses the asset, or installs it ready for use, or brings the asset to its modified or improved state on or before 30 June 2010, The additional deduction is 30% of the cost of the eligible asset/s.
- if purchased between 13/12/08 and 30/06/09 and first uses the asset, or installs it ready for use, or brings the asset to its modified or improved state between 1 July 2010 and 31 December 2010, The additional deduction is 10% of the cost of the eligible asset/s.
- if purchased between 1 July 2009 and 31 December 2009 and first uses the asset, or installs it ready for use, or brings the asset to its modified or improved state on or before 31/12/10, The additional deduction is 10% of the cost of the eligible asset/s.
As this new concession is quite complex please review the most current ATO information available and contact our office to discuss its applicability to your situation.