Are you planning to buy a car or any other capital asset for your business soon?
If yes, please buy on or before 30th June 2023 and claim deduction for the cost up to $64,741 on car and 100% of the cost for other capital assets.
Read the following rules carefully to get the full benefit out of it.
As part of the Federal Government’s COVID-19 business rescue response, the Government introduced temporary full expensing of depreciating assets. The rules allow the eligible businesses to deduct the full cost of eligible depreciable assets of any value in the year they are first held, and first used or installed ready for use for a taxable purpose from 6 October 2020 to 30 June 2023
Following are the eligibility criteria to claim this:
- Asset is first held, and first used or installed ready for use for a taxable purpose, after 6 October 2020 and on or before 30 June 2023.
- The asset is principally used in a business in Australia
- Aggregate turnover of the business should be less than $5 billion.
- If the aggregated turnover is $50 million or more – the second-hand asset will not be eligible. Means between the turnover of $50 million to $5 billion, only the new capital assets will be eligible.
- The asset is not an excluded asset (e.g. capital works, certain primary production assets and assets added to a low-value or software development pool)
From 1 July 2023, the accelerated deductions will conclude, and depreciating assets will be required to be written-off for tax purposes over their effective lives.
The 30 June 2023 date is a hard deadline and business should take sufficient care and follow the above in order to enjoy the benefit of the Temporary full expensing.
