Treasury has also released draft legislation which will introduce a "Technology Investment Boost" to help small businesses operate digitally.
It proposes to provide small businesses with a bonus deduction equal to 20% of their eligible expenditure incurred on expenses and depreciating assets for the purposes of their digital operations or digitising their operations, ie an overall deduction of 120%, with an annual cap of $20,000 per year.
The bonus deduction expenditure must be incurred between 29 March 2022 and 30 June 2023 and must be eligible for a deduction under another tax provision. If the expenditure is on a depreciating asset, the asset must be first used or installed ready for use by 30 June 2023. Certain kinds of expenditure, such as salary and wage costs, are not eligible for the bonus deduction.
Generally, entities must claim the bonus deduction for expenditure incurred in their 2021-22 income year in their 2022-23 return. This is to allow additional time for administrative and legislative arrangements to be put in place before the bonus deduction may be claimed. The bonus deduction for expenditure incurred in an entity's 2022-23 income year will also be claimed in its 2022-23 return.
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If you are seeking advice on how this boost applies to your circumstances, please do not hesitate to contact us via email info@xwd.com.au or call us on 03 6292 6012.
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