Technology Boost 20% Bonus Tax Deduction - Inline Partners

Under the technology boost, small businesses may be able to access a bonus 20% tax deduction on eligible technology expenses and depreciating assets which are used to digitise their operations.

Dates: for expeneses incurred between 7:30 pm AEDT 29 March 2022 to 30 June 2023

(note there from 29 March 2022 – 30 June 2022 would normally fall into the 2022 tax return however the bonus for that income year should be claimed in 2023 tax return)

Limits: Bonus deduction is limited to $20,000 per year (ie on expenses up to $100,000 pa). That is;

• 7:30 pm AEDT 29 March 2022 to 30 June 2022 – $20,000
• 1 July 2022 to 30 June 2023 – $20,000

Eligibility: 

• Aggregated turnover < $50m
• The expenditure must already be deductible for your business under taxation law 

What Expenses are included: 

Eligible expenditure may include, but is not limited to, business expenditure on:

• digital enabling items – computer and telecommunications hardware and equipment, software, internet costs, systems and services that form and facilitate the use of computer networks
• digital media and marketing – audio and visual content that can be created, accessed, stored or viewed on digital devices, including web page design
• e-commerce – goods or services supporting digitally ordered or platform-enabled online transactions, portable payment devices, digital inventory management, subscriptions to cloud-based services and advice on digital operations or digitising operations, such as advice about digital tools to support business continuity and growth
• cyber security – cyber security systems, backup management and monitoring services

Where the expense is partly for private purposes, the bonus deduction can only be applied to the business-related portion.

If the expenditure is on a depreciating asset, the asset must be first used or installed ready for use for a taxable purpose by 30 June 2023.

If a business purchases a depreciating asset in the relevant period, the expenditure will be the cost of the asset.

 

What you can’t claim

• salary and wages
• capital works costs
• financing costs
• training or education costs (these may be eligible for the Small business skills and training boost)
• expenses that form part of your trading stock costs.

Resources:

https://www.ato.gov.au/Business/Income-and-deductions-for-business/Deductions/Small-business-technology-investment-boost/