The ‘Small Business & General Business Tax Break’ Bill was passed by both houses of Parliament on Thursday 14 of May. Eligibility for the Investment Allowance is based on the turnover of the business acquiring the asset.

Businesses with turnover of less than $2 million

Benefit 1: The Investment Allowance enables customers to claim an additional 50% tax deduction on equipment purchased between 13 December 2008 and 31 December 2009 and delivered/installed before 31 December 2010. The Investment Allowance applies to most types of new plant and equipment, including motor vehicles.

Note: Businesses with an annual turnover of less than $2M can only claim on equipment costing $1,000 or above.

Provided all of the eligibility criteria are satisfied, you can claim the Investment Allowance as a tax deduction in your income tax return for the income year in which you start to use an eligible asset or have it installed ready for use. The investment Allowance provides a bonus tax deduction – it is not a rebate or a refundable tax offset.