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About the boost
If you are a small business with an aggregated annual turnover of less than $50 million, you may be entitled to an additional 20% tax deduction on any expenses incurred to support your digital operations or to digitalise your operations.
The boost applies to eligible expenditure incurred between 7:30pm AEDT on 29 March 2022 and 30 June 2023. The boost is for business expenses and depreciating assets and is capped at $100,000 of expenditure per income year. You can receive a maximum bonus deduction of $20,000 per income year.
If the expenditure is on a depreciating asset, it must have been first used or installed ready for use for a taxable purpose by 30 June 2023.
To access the small business technology investment boost , your business needs to be a small business entity with an aggregated annual turnover less than $50 million for the income year in which you incur the expenditure.
What you can claim
- Digital Enabling Items: This category includes expenses related to computer and telecommunications hardware and equipment, software, internet costs, and systems and services that support and enable the use of computer networks. These items are essential for businesses to operate and function digitally.
- Digital Media and Marketing: Expenditures on audio and visual content that can be created, accessed, stored, or viewed on digital devices are included here. This may encompass expenses for web page design, online advertising, social media marketing, and other digital marketing activities.
- E-commerce: Costs associated with supporting digitally ordered or platform-enabled online transactions fall into this category. This includes expenses for portable payment devices, digital inventory management systems, subscriptions to cloud-based services, and advice on digital operations or digitizing business processes. It covers various aspects of e-commerce infrastructure and tools.
- Cybersecurity: Expenses related to cybersecurity measures are included, such as investments in cybersecurity systems, backup management, and monitoring services.
It’s important to note that if any of these expenses have a private or non-business-related component, the bonus deduction can only be applied to the portion of the expense that is related to your business activities.
Additionally, if your business is registered for Goods and Services Tax (GST), and the expenditure is not GST-free, the bonus deduction is calculated based on the GST-exclusive amount.
An annual cap applies so that expenditure up to $100,000 is eligible for the bonus deduction, with the bonus deduction capped at $20,000 per year. The maximum bonus deduction a business can claim is $40,000 for the entire period.
For more information go to the ATO website.