The Small Business Technology Investment Boost is an extra 20 percent tax deduction on eligible expenses you have incurred for digitising your business’ operations or supporting its existing digital operations. The expense must have been made between 7:30 pm AEDT on 29 March 2022 and 30 June 2023.
Related: What Does the Digitalisation of Accounting Mean for Your Business?
Is your business eligible?
To qualify for the small business technology investment boost, your business must:
- Have an aggregated annual turnover of less than $50 million for the income year you have incurred the expenditure
- Have invested in an eligible technology expenditure between 7:30 pm AEDT on 29 March 2022 and 30 June 2023
List of eligible expenditure
The small business technology investment boost applies to eligible expenses and depreciating assets that are meant to support your business’s digital operations.
It has an annual cap of $100,000 of expenditure, which means you can receive a maximum bonus tax deduction of $20,000 annually.
Below is a list of some of the business expenditures you can claim:
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Digital enabling items
This includes:
- Internet costs
- Software
- Computer and telecommunications hardware and equipment
- Systems and services that utilize computer networks
-
Digital media and marketing
The expenses you’ve incurred for supporting your digital media and marketing efforts can also be eligible for the 20% tax deduction, specifically:
- The audio and visual content can be created, accessed, stored, or viewed on digital devices (e.g., web page design).
-
E-commerce
You can also claim:
- Goods or services supporting digitally ordered or platform-enabled online transactions
- Portable payment devices
- Digital inventory management
- Subscriptions to cloud-based services
- Advice on digital operations or digitising operations
-
Cyber security
Strengthening your business’s cyber security to protect it from malicious attacks allows you to apply for this bonus deduction. Some examples of eligible expenses include:
- Backup management
- Cyber security systems
- Monitoring devices
Depreciating assets are also eligible for the small business technology investment boost. However, it must first be used — or installed and ready for use — for a taxable purpose by 30 June 2023. The expenses you incurred for repairing and improving your depreciating assets are also eligible. Just make sure that you have incurred those costs during the relevant period.
Meanwhile, here are some examples of expenses you cannot claim:
- Capital works costs
- Salary and wage
- Financing costs
- Expenses related to your trading stock costs
- Training or education costs, though these may be eligible for the small business skills and training boost — a separate 20% bonus deduction on eligible training expenses.
Need help with your taxes?
If you need assistance preparing your taxes — especially in maximising all available tax deductions for your business — ABJ Solutions is at your service. We can provide you with tailored tax preparation support.
Our accountants are also part of a wider team with CM Partners, a well-respected chartered accounting firm in Australia, to bring better and more comprehensive solutions and advice on your taxes.
Contact us today to learn more about our services or request a free financial health check from our experts.
