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Businesses with a turnover of less than $500 million will be able to deduct 50 per cent of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset cost.

Eligibility


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.

Timing


Applies to eligible assets acquired from 12 March 2020 and first used or installed by 30 June 2021.

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.