The Government will legislate to allow immediate tax deductibility for small and medium sized businesses for expenditure on acquiring new plant or new software for the purposes of implementing the GST.
Assistance by way of immediate tax deductibility will have an estimated revenue cost of $175 million in 2000-01. It is in addition to the $500 million being provided in 1999-2000 to assist small and medium enterprises, charities and education bodies prepare for the commencement of the GST.
Providing immediate tax deductibility for GST related expenditure will be of major assistance to small and medium sized businesses as they prepare for the introduction of the GST.
For businesses with a turnover of not more than $10 million, the Government will legislate to extend the class of expenditures immediately deductible to include:
- Expenditure incurred on acquiring new plant or new software (including upgrades) associated with gearing-up for the GST, provided the expenditure is incurred before 1 July 2000.
The Australian Taxation Office will be issuing a taxation ruling that sets out the tax treatment of expenditures that may be incurred by business taxpayers in preparing for the commencement of the GST. This ruling will apply to those businesses with turnover more than $10 million and will apply to all businesses for expenditures different from those covered by this announcement.