This year the Government has introduced a tax boost that can apply to the 2023 year and provides an additional 20% tax deduction for eligible costs of digitising operations.
To be eligible for the bonus deduction, the expenditure must be incurred wholly or substantially for the purposes of an entity’s digital operations or digitising the entity’s operations. This will require a direct link to an entity’s digital operations for its business.
The amount of the Technology Investment Boost is calculated as 20% of the total amount of eligible expenditure incurred during the period from 7.30pm (ACT time) on 29 March 2022 to 30 June 2023, up to a maximum bonus deduction of $40,000 in the 2023 income year.
However, this cap essentially operates as two separate $20,000 caps, whereby the $40,000 maximum bonus deduction is calculated as the sum of:
• $20,000 that is referable to eligible expenditure incurred during the period from 7:30 pm (ACT time) on 29 March 2022 to 30 June 2022 (the ‘first time period’); plus
• $20,000 that is referable to eligible expenditure incurred during the 2023 income year (the ‘second time period’).
Effectively, the amount of the bonus deduction is capped at 20% of $100,000 of eligible expenditure per relevant time period. Note that eligible taxpayers claim their bonus deduction in the 2023
income year, regardless of when the eligible expenditure was incurred.
Please refer to this link for further information or contact our office on 08 9387 5673.
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