A bonus deduction may be available in this upcoming tax return for expenses relating to undertaking a digital adoption for your business.

This bonus deduction is 20% of the costs you've incurred to support a digital adoption, including but not limited to:

Digital enabling items such as computer hardware and software, systems and services that form and facilitate the use of a computer network.

Digital media and marketing such as audio and visual content that can be created, accessed, stored and viewed on digital services, and

e-commerce items that support digital payment systems and online transactions.

Cyber security systems, backup management and monitoring services.

The bonus deduction is capped at $20,000 per year, being 20% of $100,000 in costs. This bonus deduction is on top of the actual deduction that you'll be able to claim for the items used in your business. The actual deduction may be an outright tax deduction due to the temporary full expensing rules that are currently in place.

Any eligible costs incurred from 7:30pm (AEDT) on 29 March 2022 to 30 June 2023 are included.

In June 2023 this measure became law, the eligibility window was small, however, we previously informed you that the bonus deduction was likely to become law as the initial announcement was first made by the former Coalition government. It was then confirmed to be re-introduced as law by the current Labor government back in August 2022.

What you need to do

We will scrutinise your deductions for all digital upgrades over the eligibility period to ensure that we are getting you the full bonus deduction to you. When you send in your year-end tax work and accounting file, make sure you attach all the invoices that you think will be eligible for this bonus deduction. To begin with, that would include all your new purchases listed within the 4 items above.

Along with this, we will also review your files and make sure that we see a copy of any invoices that we think are also eligible for the bonus deduction.

Other matters

If you are entitled to a research and development tax incentive (RDTI) notional deduction, note that it is not covered under taxation law, therefore, you may be entitled to claim both the bonus deduction as well as the R&D notional deduction.



If you have any questions, please contact our office. We would be delighted to assist you further.