Date posted: 26/09/2022

Submission on the technology investment deduction boost draft legislation

Will the technology boost need to be extended due to supply constraints? How far will the technology boost extend?

The purpose of the technology investment deduction boost is to encourage small business owners to continue and improve digitalisation of their business.  Given the ever increasing need to interact digitally with government, business and consumers this is a welcomed measure.

With newspapers still discussing a chip shortage some businesses may find it difficult to have equipment installed ready for use by 30 June 2023.  CA ANZ’s submission calls for consideration of mechanisms to allow the Treasurer to extend this measure if supply concerns arise.

The original budget announcement regarding the technology investment deduction boost indicated that it would extend to cyber security systems and subscriptions to cloud based services.  The explanatory memorandum should clarify that these items are included in the technology investment deduction boost.

CA ANZ also calls for the explanatory memorandum to contain examples that small businesses will commonly ask such as does the technology investment deduction boost include:

  • A Xero or MYOB annual subscription?
  • Prepayment of subscriptions?
  • Integrating customer relationship management and accounting software?
  • Electrical or structural work to support the installation of electronic equipment?
  • A scanner?
  • Obtaining advice about improving the business’ defences against cyber security?

The Australian Taxation Office has been allocated $7.2M in relation to this measure.  Discussion in the explanatory memorandum about what documentation is needed to support that the expenditure is “wholly or substantially” for your digital operations or digitalising your operations would be welcomed.

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Technology Investment Boost.

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