Coronavirus (COVID-19) updates from the Australian Government

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Your business may benefit from Temporary Full Expensing if the eligible asset is acquired and first used or installed from announcement on Budget night (7.30pm AEDT on 6 October 2020) until 30 June 2022.

The 2020-21 Budget is building on the existing instant asset write-off (IAWO) and backing business investment (BBI) incentives by allowing eligible businesses with an aggregated annual turnover up to $5 billion to deduct the full cost of eligible depreciable assets of any value in the year they are first used or installed.

Full Expensing will generally apply to new assets, and will also allow small and medium-sized businesses (with aggregated annual turnover below $50 million) to deduct the full cost of new and second‑hand assets. The cost of improvements made during this period to existing eligible depreciable assets can also be fully deducted.

Other assets purchased that don’t qualify for Full Expensing may still qualify for the IAWO or BBI.

When

Full Expensing applies to eligible assets acquired from Budget night (7.30pm AEDT on 6 October 2020) and first used or installed by 30 June 2022.

If you invest in an asset before 7.30pm AEDT on 6 October 2020 (Budget night)

If your business has invested in an eligible asset before Budget night, your business may still benefit from the enhanced instant asset write-off (IAWO) or the backing business investment (BBI) incentive.

Under the enhanced IAWO, businesses with turnover below $500 million that acquire eligible assets under the $150,000 IAWO threshold by 31 December 2020 will have an extra six months, until 30 June 2021 to first use or install assets.

Under the BBI, businesses with turnover below $500 million that acquire certain new depreciable assets can deduct 50 per cent of the cost of the asset, provided it is first used or installed by 30 June 2021.

See also