Tax Concessions Capital Investment
Last updated 15 May 2020
The following concessions are available in relation to business capital investment for depreciating assets and apply from 12 March 2020 to all businesses with an annual aggregated turnover of up to $500 million:
Increasing the Instant Asset Write-Off
The Government is increasing the instant asset write-off (IAWO) threshold from $30,000 to $150,000 and expanding access to include all businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020.
Backing Business Investment (BBI)
The Government is introducing a time limited 15-month investment incentive to support business investment and economic growth over the short-term, by accelerating depreciation deductions.
The key features of the incentive are:
- Benefit – deduction of 50% of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost.
- Eligible businesses – businesses with aggregated turnover below $500 million; and
- Eligible assets – new assets that can be depreciated under Division 40 of the Income Tax Assessment Act 1997, acquired after announcement and first used or installed by 30 June 2021. Does not apply to second-hand Division 40 assets, or buildings and other capital works depreciable under Division 43.
FAQ's
Yes, you can purchase a business vehicle and claim it this financial year as long as it is less than the threshold.
You cannot immediately claim these assets, and you will need to add these to your small business pool.
No, you cannot claim depreciation in later years on assets that you immediately write off.
Yes, you can claim multiple assets as long as they meed the criteria.
This incentive will only be available in relation to new assets that are acquired after 12 March 2020 and are first used or installed ready for use by 30 June 20201.
It will not apply to second-hand assets or buildings and other capital works expenditure.
This information is current as of the latest updated date, however due to the evolving response to the crisis, we will update as changes occur.