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Businesses with an aggregated turnover of less than $500 million can deduct 50 per cent of the cost of an eligible asset in the income year the asset is first used or installed ready for use, with existing depreciation rules applying to the balance of the asset cost The accelerated depreciation deduction is available in the 2019-20 and 2020-21 income years.


To be eligible to apply the accelerated rate of deduction, the depreciating asset must:

  • be new and not previously held by another entity (other than as trading stock)
  • not be an asset to which an entity has applied depreciation deductions or the instant asset write-off rules
  • be first held on or after 12 March 2020
  • first used or first installed ready for use for a taxable purpose on or after 12 March 2020 until 30 June 2021

Under the measures, different rules apply depending on whether or not an entity is using the simplified rules for capital allowances for small businesses.

How to apply

You do not need to apply for the Backing Business Investment (BBI). You can claim the deduction when lodging your tax return for the income year.

Find out more about Backing Business Investment.