Businesses (with an aggregated annual turnover less than $50 million) may be able to access a bonus 20% tax deduction with the small business energy incentive (the incentive). This applies to new assets, or improvements to existing assets, that support more efficient energy use.

Eligible assets must have been both first used or installed ready for use for any purpose, and used or installed ready for use for a taxable purpose, between 1 July 2023 and 30 June 2024. You must have incurred the eligible improvement costs during this period to be eligible for the bonus deduction.

Up to $100,000 of total expenditure is eligible under the incentive. The maximum bonus deduction is $20,000 per business.

 

What you can’t include or claim 

While this incentive covers a broad range of expenditure, it’s important to know what you can’t claim:

assets and expenditure on assets that can use a fossil fuel
assets and expenditure on assets that have the sole or predominant purpose of generating electricity (such as solar panels)
capital works
motor vehicles and expenditure on motor vehicles
expenditure allocated to software development pools
financing costs.

What you need to do 

When claiming the incentive, make sure you:

have accurate records that provide evidence of the expenditure you claim
can show and explain how you compared different assets when upgrading or making improvements
keep up to date with information on our website on what, when and how to claim
seek advice from your registered tax professional if you have one.

 

 

QC102662 – Published 18 July 2024

Did you energise your business? | Australian Taxation Office (ato.gov.au)