Australia: ATO guidance on small business incentives
ATO guides on instant asset write-off and small business energy incentive
ATO guides on instant asset write-off and small business energy incentive
The Australian Taxation Office (ATO) released a guide that outlines the criteria for small businesses to claim the $20,000* instant asset write-off (IAWO).
- To be eligible for the IAWO, businesses must have an aggregated annual turnover of less than $10 million.
- The eligible assets must have been first used or installed ready for use, between July 1, 2023, and June 30, 2024, with the $20,000 threshold applicable on a per asset basis—enabling instant write-off on multiple assets.
- Eligible small businesses will also be able to write off the first cost of improvements incurred between July 1, 2023, and June 30, 2024 under $20,000, to qualifying assets that were written off in a previous tax year.
- The IAWO is applicable for both new and second-hand assets, though with some exclusions and limits.
The ATO also released a guide on claiming the small business energy incentive.
- The incentive is a bonus 20% tax deduction that is available to businesses with an aggregated annual turnover of less than $50 million, and applies to new assets, or improvements to existing assets, that “support more efficient energy use.”
- Up to $100,000 of total expenditure is eligible under the incentive, but the maximum bonus deduction is $20,000 per business.
- To be eligible, the eligible assets must be both first used or installed ready for use for any purpose and used or installed ready for use for a taxable purpose, between July 1, 2023 and June 30, 2024.
- To claim the incentive, businesses need to have accurate records that provide evidence of the expenditure, and show and explain how different assets were compared when upgrading or making improvements.
*$=Australian dollar
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