The Technology Investment Boost

About the Technology Investment Boost 

The Technology Investment Boost (the technology boost) provides business entities with aggregated turnover of less than $50m a bonus 20% deduction for expenses and depreciating assets that have a close connection with the entity’s digital operations or digitising its operations from 7:30pm (AEST) on 29 March 2022 until 30 June 2023. 

The boost applies to total eligible expenditure of up to $100,000 per income year (a maximum bonus deduction of $20,000 per income year). 

The ‘boost’ was enacted by Treasury Laws Amendment (2022 Measures No. 4) Bill 2022 that received Royal Assent on 23 June 2023. 

Who can access the technology boost? 

The technology boost is aimed at entities that carry on a business with aggregated annual turnover of less than $50 million. The boost can apply to sole traders, partnerships, companies and trusts. An entity with aggregated turnover of $50m or more in the year the expenditure is incurred could potentially still access the boost if its aggregated turnover was less than $50m in the previous year. 

The aggregated turnover test captures the annual turnover of the entity being tested plus the annual turnover of any affiliates or connected entities. As a result, subsidiaries of large corporate groups are unlikely to qualify. 

What expenditure qualifies for the boost? 

The rules state that: 

• The expenditure must be eligible for a deduction under another provision of the tax law. 
• If the expenditure is on a depreciating asset, the asset must be first used or installed ready for use by 30 June 2023 (the rules are relaxed in situations involving in-house software that is allocated to a software development pool). 
• The expenditure must be incurred wholly or substantially for the purposes of the entity’s digital operations or digitising its operations. 
• If the expenditure is for multiple purposes (for example, a mix of private and business use), the bonus deduction will apply only to the proportion of the expenditure that is for business use.

If you have any questions regarding the technology boost contact our office on (08) 9303 8900 or click here to make an appointment today.