The Australian Government has recently announced a $17.6 billion economic stimulus package to boost cash flow for small and medium businesses for the remainder of the 2019/2020 fiscal year.
There are two main tax incentives that apply to Australian businesses. Check out the KOBELCO Updated Investment Tax Incentive Fact Sheet below, for all you need to know!
Updated Australian Investment Tax Incentives
16 March 2020
100% INSTANT ASSET WRITE-OFF
- 1. Applies to all excavators and attachments with an individual purchase price of less than $150,000 excluding GST, (increased from $30,000).
- 2. Valid for ABN registered businesses with revenue turnover of less than $500 million (increased from $50 million).
- 3. 100% tax write-off in the current tax year ending 30 June 2020. Customer must take delivery prior to 30 June. This incentive expires on 30 June 2020.
- 4. Machine and attachments can be invoiced separately.
- 5. No limit on how many assets are claimed.
- 6. Applies to both new and used assets.
Contractor Pty Ltd buys a SK55 for $95,000 plus GST in April 2020. For the tax year ending 30 June 2020, Contractor claims $95,000 as a tax deduction and reduces tax liability by $26,125, assuming the tax rate of 27.5%.
50% INSTANT DEPRECIATION WRITE-OFF
- 1. Applies only to NEW assets valued over $150,000 with no maximum.
- 2. Valid for companies with revenue turnover less than $500 million.
- 3. Valid until 30 June 2021, that is 15 months validity.
- 4. Customer can claim a tax deduction of 50% of the purchase price in year 1, plus normal tax deprecation rate on the remaining 50% asset balance in year 1.
Big Contractor Pty Ltd buys a SK300 for $270,000 plus GST in May 2020. For the tax year ending 30 June 2020, Big Contractor claims a tax deduction of $135,000 (50% of $270K), plus a normal tax deduction of $24,300 (18% of the remaining $135K). Total tax deduction of $159,300 reduces tax liability by $47,790, assuming a tax rate of 30%.
*Information above is general in nature and should not be relied upon as tax advice. Kobelco Construction Equipment Australia is not a provider of financial advice. Please seek independent financial advice from your accountant or tax adviser.