There is some confusion about the status of the Federal Government's business investment incentives announced last February as a part of the $42billion Nation Building and Jobs Plan.

 

The legislation has passed through the House of Representatives and is scheduled to be considered by the Senate in the week starting May 12. The legislation is expected to be passed by the Senate. Based on this expectation TMA has been advised that the legislation can be considered to be currently in effect. This includes the $900 payments currently being distributed to eligible taxpayers.

The stimulus package offers businesses with a turnover of $2 million a year or less a tax deduction of 30 per cent of the cost of new capital equipment worth more than $1,000 so long as it is bought by June 30 and installed before the year's end. It falls to 10 per cent for equipment bought from July until the end of December for installation by the end of 2010.

Bigger businesses are eligible for the same deductions but have to spend at least $10,000 on new equipment to qualify.

The Government expects the tax break, which will come on top of existing deductions to business for depreciation of capital equipment, will cost $2.7 million in foregone revenue over the next three years.

If you log on to the Treasury website: www.treasury.gov.au and check the "Frequently Asked Questions" section there is detailed information available under The Introduction of the Small Business and General Business Tax Bill.