Businesses can claim 120 per cent deduction when investing in new technology.

The recent federal budget included a new 20 per cent increase in the amount small businesses can deduct when investing in new technologies.

The $1.0 billion Technology Investment Boost was announced as part of the 2022 Federal Budget to encourage small businesses to go digital. Eligible businesses with annual turnover less than $50 million will be able to deduct a bonus 20% of the cost of expenses and depreciating assets that support digital uptake. This includes:

• portable payment devices
• cyber security systems
• subscriptions to cloud-based services.

Any business wanting to upgrade their software between now and 30 June 2023 will now be able to claim the full cost as a deduction, plus an extra 20 per cent – a total of 120 per cent of the investment.

In his budget speech, treasurer Josh Frydenberg said he hoped the tech tax boost would encourage small businesses “that are embracing the digital revolution” by rewarding those that invest in new technologies. 

The boost will apply to eligible expenditure of up to $100,000 per year, incurred from Budget night (29 March 2022) until 30 June 2023.

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