Instant Asset Tax Write-Off available for business

Under the instant asset write-off, eligible businesses can:

  • Immediately write off the cost of each asset that costs less than the threshold
  • Claim a tax deduction for the business portion of the purchase cost in the year the asset is first used or installed ready for use.

Instant asset write-off can be used for both new and second-hand assets. Some exclusions and limits apply.

The instant asset write-off eligibility criteria and threshold have changed over time. You need to check your business’s eligibility and apply the correct threshold amount.

From 12 March 2020 until 31 December 2020 the instant asset write-off:

  • Threshold amount for each asset is $150,000 (up from ($30,000)
  • Eligibility has been expanded to cover businesses with an aggregated turnover of less than $500 million (up from $50 million).

Please refer to the below links for further information.

AUTOMOTIVE TAX SAVINGS* READY RECKONER (financial year ended 30 June 2020)

*Small/medium/large business entity is a company (registered for GST) and the vehicle is used 100% for business purposes.

Vehicle cost
(incl. GST)
Vehicle cost
(excl. GST)
GST input tax credit Immediate income tax deduction Income tax savings
(D x 27.50%)
Income tax savings
(D x 30.00%)
Net vehicle cost
(A-C-E)
27.50%
Net vehicle cost
(A - C - F)
30.00%
A B C D E F G H
$11,000 $10,000 ($1,000) $10,000 ($2,750) ($3,000) $7,250 $7,000
$16,500 $15,000 ($1,500) $15,000 ($4,125) ($4,500) $10,875 $10,500
$22,000 $20,000 ($2,000) $20,000 ($5,500) ($6,000) $14,500 $14,000
$27,500 $25,000 ($2,500) $25,000 ($6,875) ($7,500) $18,125 $17,500
$33,000 $30,000 ($3,000) $30,000 ($8,250) ($9,000) $21,750 $21,000
$38,500 $35,000 ($3,500) $35,000 ($9,625) ($10,500) $25,375 $24,500
$44,000 $40,000 ($4,000) $40,000 ($11,000) ($12,000) $29,000 $28,000
$49,500 $45,000 ($4,500) $45,000 ($12,375) ($13,500) $32,625 $31,500
$55,000 $50,000 ($5,000) $50,000 ($13,750) ($15,000) $36,250 $35,000
$60,500 $55,000 ($5,500) $55,000 ($15,125) ($16,500) $39,875 $38,500
$63,339 $57,581 ($5,758) $57,581 ($15,835) ($17,274) $41,746 $40,307
A “CAR above $57,581 excluding GST will be limited to the GST Input Tax Credit and Income Tax Saving show on the line immediately above.
A “COMMERCIAL VEHICLE” above $57,581 excluding GST will be able to claim further Input Tax Credits and Tax Savings as shown below.
$66,000 $60,000 ($6,000) $60,000 ($16,500) ($18,000) $43,500 $42,000
$77,000 $70,000 ($7,000) $70,000 ($19,250) ($21,000) $50,750 $49,000
$88,000 $80,000 ($8,000) $80,000 ($22,000) ($24,000) $58,000 $56,000
$99,000 $90,000 ($9,000) $90,000 ($24,750) ($27,000) $65,250 $63,000
$110,000 $100,000 ($10,000) $100,000 ($27,500) ($30,000) $72,500 $70,000
$121,000 $110,000 ($11,000) $110,000 ($30,250) ($33,000) $79,750 $77,000
$132,000 $120,000 ($12,000) $120,000 ($33,000) ($36,000) $87,000 $84,000
$143,000 $130,000 ($13,000) $130,000 ($35,750) ($39,000) $94,250 $91,000
$154,000 $140,000 ($14,000) $140,000 ($38,500) ($42,000) $101,500 $98,000
$165,000 $150,000 ($15,000) $150,000 ($41,250) ($45,000) $108,750 $105,000

BDO Services Pty Ltd ABN 45 134 242 434 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Services Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.

BDO is the brand name for the BDO network and for each of the BDO member firms.

© 2020 BDO Services Pty Ltd. All rights reserved.

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*This proposal applies until 30 June 2020 for new or second-hand assets first used or installed ready for use in this timeframe. Please refer to www.ato.gov.au for full details on the instant asset write-off for business.