When can I claim the 30% tax break?
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So you have purchased an eligible asset for the Australian’ Federal Government’s Investment Tax Break. The next question for your Accountant is…
When can you claim your deduction?
In Division 41 (41-115, 41-120, 41-125, 41-130 and 41-135) of the exposure draft of the legislation it is put in very complicated language… but for the rest of us this quote from Federal MP Craig Emerson (the Federal Member for Rankin and Minister for Small Business, Independent Contractors and the Service Economy) basically sums it up:
“The deduction is claimable in the income year that the asset is installed and ready for use”
Assuming your acquire (or start construction of) the eligible asset between 13 December 2008 and 30 June 2009 (so you qualify for the thirty percent tax break):
- If the asset is installed and ready for use by 30 June 2009, the 30% deduction is claimable in the 2008-09 income year
- If the asset is installed and ready for use by 30 June 2010, the 30% deduction is claimable in the 2009-10 income year
- If the asset is installed and ready for use after 30 June 2010 – you no longer qualify for the 30% investment tax break.
If you acquire (or start construction of) the eligible asset between 1 July 2009 and 31 December 2009 (so you qualify for the ten percent tax break):
- If the asset is installed and ready for use by 30 June 2010, the 10% deduction is claimable in the 2009-2010 income year.
- If the asset is installed and ready for use by 31 December 2010, the 10% deduction is claimable in the 2010-2011 income year.
*Remember that the legislation still hasn’t passed parliament when this article was published – so don’t just take our word for it! Make sure you speak to your accountant before making any decisions.