Instructions and information for claiming the small business technology investment boost.
Amount of the technology investment boost or bonus deduction
Enter the amount claimed by the CCIV sub-fund's for the small business technology investment boost. Do not include the total technology investment expenditure at this label.
The amount of the boost, or bonus deduction, is equal to 20% of the total eligible technology and investment expenditure that you can claim as a general deduction or under another deduction provision of the tax law.
The small business technology investment boost provides a temporary bonus deduction to those entities that meet the definition of 'small business entity' (or would meet that definition if the reference to an aggregated turnover of $10 million was replaced by a reference to $50 million). The bonus deduction is for expenditure incurred, and depreciating assets acquired, for the purposes of their digital operations or digitising their operations.
The bonus deduction is an additional tax deduction of 20%, on top of the ordinary deduction, for the eligible expenditure incurred between 7:30 pm AEDT on 29 March 2022 and 30 June 2023.
Bonus deduction caps
Certain caps apply to the amount that you can claim as a bonus deduction depending on your balancing date if you have a substituted accounting period.
If you are not an early balancer:
- you can claim up to a maximum of $20,000 on eligible expenditure of up to $100,000 for the period from 7:30 pm (AEDT) on 29 March 2022 to the end of your 2021–22 income year.
- you can claim up to a maximum of $20,000 on eligible expenditure of up to $100,000 for the period from the start of your 2022–23 year to 30 June 2023.
If you are an early balancer:
- you can claim up to a maximum of $20,000 on eligible expenditure of up to $100,000 for the period from 7:30 pm (AEDT) on 29 March 2022 to the end of your 2022–23 income year.
- you can claim up to a maximum of $20,000 for eligible expenditure of up to $100,000 for the period from the start of your 2023–24 income year to 30 June 2023.
The cap on the bonus deduction works on a cumulative basis in respect of the eligible expenditure.
Criteria for claiming the bonus deduction
You must also meet all of the following criteria for the bonus deduction:
- the expenditure must be eligible for a deduction under another provision of the taxation law
- if the expenditure is on a depreciating asset, the asset must be first used or installed ready for use by 30 June 2023
- the expenditure must be incurred wholly or substantially for the purposes of your digital operations or digitising your operations.
If the expenditure is for multiple purposes (for example, a mix of private and business use), the bonus deduction will apply to the proportion of the expenditure that is for business use only.
You cannot claim the bonus deduction for expenditure on a depreciating asset if any balancing adjustment event occurs to the asset (for example, it is sold) while you hold it during the relevant time period, unless the balancing adjustment event is an involuntary disposal.
Repair and improvement costs for depreciating assets are eligible for the boost provided that these costs are incurred during the relevant period.
The following types of expenditure are not eligible for the technology investment bonus deduction:
- salary and wage costs
- capital works costs which can be deducted under Division 43 of the ITAA 1997
- financing costs
- expenditure that forms part of, or is included in, the cost of trading stock
- training and education costs.
Repair and improvement costs for depreciating assets are eligible for the bonus deduction provided that these costs are incurred during the relevant time period.
For depreciating assets, you can either deduct the cost of a depreciating asset in one income year (under temporary full expensing - TFE) or, if opted out of TFE for an asset, deduct the decline in value of the asset over its effective life (under the uniform capital allowance regime). The bonus deduction of an eligible depreciating asset is calculated based on the asset's cost (to the extent that it is used for a taxable purpose) regardless of the method of deduction that the entity takes.
When the bonus deduction is claimed
The bonus deduction is available where your expenditure is incurred between 7:30 pm (AEDT) on 29 March 2022 and 30 June 2023.
For the purposes of calculating and claiming the bonus deduction, if you are a normal or late balancer, and incurred expenditure from 7:30 pm AEDT on 29 March 2022 and to the end of 2022–23, you claim the bonus deduction in your 2022–23 income tax return.
This means that you claim the bonus deduction for eligible expenditure incurred in both the 2021–22 income year and the 2022–23 income year in your 2022–23 tax return.
If you are an early balancer:
- lodging for 2022–23 income year, do not claim the bonus deduction
- lodging for 2023–24 income year, and
- incurred expenditure from 7:30 pm AEDT on 29 March 2022 to the end of your 2022–23 income year, you claim the bonus deduction for that expenditure in 2023–24
- incur expenditure in your 2023–24 income year (up until 30 June 2023), you claim the bonus deduction for that expenditure in 2023–24.
Whether you are a normal, late or early balancer, you can claim up to a maximum bonus deduction of $40,000 for the period from 7:30 pm AEDT on 29 March 2022 to 30 June 2023.
The ordinary deduction for eligible technology investment expenditure is claimable (under the usual rules) in the income year in which it is incurred, and for depreciating assets, when the asset is first used or installed ready for use.
Continue to: Withholding obligations