Income Tax (Transitional Provisions) Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-45 - RULES FOR PARTICULAR INDUSTRIES AND OCCUPATIONS  

Division 328 - Small business entities  

SECTION 328-445   Bonus deduction for upskilling employees of small business entities etc.  

Initial bonus deduction - 2022-23 income year for normal or late balancers

328-445(1)    
You can deduct 20% of particular expenditure for the 2022-23 income year if:

(a)    you are a small business entity, or an entity covered by subsection (4) , for the income year in which you incur the expenditure; and

(b)    you incur the expenditure in the period:

(i) starting at 7.30 pm, by legal time in the Australian Capital Territory, on 29 March 2022; and

(ii) ending at the end of the 2022-23 income year; and

(c)    you can deduct 100% of the expenditure under another provision of a taxation law (whether or not in, or wholly in, the income year in which the expenditure is incurred); and

(d)    section 328-450 applies to the expenditure.

Initial bonus deduction - 2023-24 income year for early balancers

328-445(2)    
Subsection (1) does not apply if your 2022-23 income year starts before 1 July 2022. Instead, you can deduct 20% of particular expenditure for your 2023-24 income year if:

(a)    you are a small business entity, or an entity covered by subsection (4) , for the income year in which you incur the expenditure; and

(b)    you incur the expenditure in the period:

(i) starting at 7.30 pm, by legal time in the Australian Capital Territory, on 29 March 2022; and

(ii) ending at the end of your 2023-24 income year; and

(c)    you can deduct 100% of the expenditure under another provision of a taxation law (whether or not in, or wholly in, the income year in which the expenditure is incurred); and

(d)    section 328-450 applies to the expenditure.

Later bonus deductions

328-445(3)    
You can deduct 20% of particular expenditure for an income year (the current year ) if:

(a)    the current year is after:

(i) if your 2022-23 income year starts on or after 1 July 2022 - your 2022-23 income year; or

(ii) if your 2022-23 income year starts before 1 July 2022 - your 2023-24 income year; and

(b)    you are a small business entity, or an entity covered by subsection (4) , for the current year; and

(c)    you incur the expenditure in the current year and before the end of 30 June 2024; and

(d)    you can deduct 100% of the expenditure under another provision of a taxation law (whether or not in, or wholly in, the income year in which the expenditure is incurred); and

(e)    section 328-450 applies to the expenditure.

Businesses with turnover under $50 million

328-445(4)    
An entity is covered by this subsection for an income year if:

(a)    the entity is not a small business entity for the income year; and

(b)    the entity would be a small business entity for the income year if:

(i) each reference in Subdivision 328-C (about what is a small business entity) of the Income Tax Assessment Act 1997 to $10 million were instead a reference to $50 million; and

(ii) the reference in paragraph 328-110(5)(b) of that Act to a small business entity were instead a reference to an entity covered by this subsection.

These are bonus deductions under the Income Tax Assessment Act 1997

328-445(5)    
The Income Tax Assessment Act 1997 has effect as if this section and section 328-450 of this Act were provisions of Division 25 of the Income Tax Assessment Act 1997 .

328-445(6)    
Sections 8-10 and 355-715 of the Income Tax Assessment Act 1997 do not apply in relation to a deduction under this section.