Under the proposed Technology Investment Boost, small businesses with an annual turnover of less than $50 million will be able to claim a 120% deduction on costs associated with supporting their digital adoption.
As part of the 2022–23 Budget, the then Government announced in March that it will be supporting small businesses, by deducting an additional 20% of the cost incurred on business expenses and depreciating assets that support their digital journey, in an effort to help them keep up with larger enterprises.
This announcement is yet to be passed into law by the new Government, however, it is worth noting as the financial year draws to a close, as it could save small businesses thousands of dollars. The deduction will be applied to costs incurred between 29 March 2022 and 30 June 2023.
The allowance will be applied to organisations that invest in technologies such as cloud computing, artificial intelligence, cyber security systems, and digital devices.
Josh Frydenberg, then Treasurer, stated that “every hundred dollars these small businesses spend on digital technologies like cloud computing, eInvoicing, cybersecurity, and web design will see them get a $120 tax deduction.”
How to claim the Technology Investment Boost
For eligible expenditure incurred between 7:30 pm AEDT 29 March 2022 until 30 June 2022:
- Claim the expenditure as usual in your 2021–22 tax return, and
- Claim the additional 20% bonus deduction for this period in your 2022–23 tax return.
For eligible expenditure incurred from 1 July 2022 until 30 June 2023:
- Deduct the entire 120% in your 2022–23 tax return.
You can find further details on the Technology Investment Boost here.