As part of the Australian Government's Economic Stimulus Package, businesses purchasing New Equipment can claim a bonus tax deduction. How could this work for you? Business Category Claimable Value (excl GST) Commit to Investing (Ordered) Start to Use or Have Installed Ready (Delivered) (Small business) $2 million or less 50% $1,000 or more Between 13 December 2008 & 31 December 2009 By 31 December 2010 (Other Businesses) $2 million or more 30% $10,000 or more Between 13 December 2008 & 30 June 2009 By 30 June 2010 (Other Businesses) $2 million or more 10% $10,000 or more Between 13 December 2008 & 30 June 2009 Between 1 July 2010 & 31 December 2010 (Other Businesses) $2 million or more 10% $10,000 or more Between 1 July 2009 & 31 December 2009 By 31 December 2010 The deduction is claimable as part of your income tax return for the year in which the asset is installed ready for use. A scenario of how this could work if delivered by 30 June 2010 Purchase Price New Trailer $ 100,000.00 GST Rebate $ 9,090.91 Balance after GST claimed $90,909.09 50% Investment Allowance on post GST Purchase $ 45,454.55 15% Depreciation on Post GST Purchase $ 13,636.36 Total Claimable if delivered by 30th June 2010 $ 59,090.91 Therefore, tax saving this 30th June 2010 at Company Tax Rate of 30% $17,727.27 GST Cash Refund $ 9,090.91 Total Cash Advantage for 30th June 2010 $ 26,818.18 Net Cost of Trailer $ 73,181.82 Note: We are not professional tax advisers and recommend you seek professional advice regarding how the investment allowance pertains to you. A light hearted take on the Australian Government's Investment Allowance Click here to read more at the ATO Website
(Small business) $2 million or less