Electrify Your Business with a $20k Deduction! ⚡💼

Want to give your business an energy-efficient boost? Read on to find out how!

🌍 The Future is Electric

Gone are the days of gas and fossil fuels. The spotlight is now on electricity and energy efficiency. The government has introduced an incentive to help businesses shift towards cleaner energy solutions.

💰 What’s the Deal?

Small to medium enterprises (SMEs) with a turnover of less than $50 million can avail of a bonus 20% tax deduction on costs (up to $100,000) related to improving their business’s energy efficiency. But here’s the catch: this offer is time-sensitive. Act fast, because you only have until 30 June 2024 to take advantage!

🤔 What’s the Math?

Invest up to $100,000 and snag a tax deduction of up to $20,000 per entity. This is not a cash refund but will either cut down your taxable income or increase your tax loss for 2024.

🛍️ What Can You Buy or Upgrade?

There isn’t a strict list, but there are specific criteria:

  • For New Assets: They should be first used between 1 July 2023 and 30 June 2024. These assets must:
    • Use electricity.
    • Be more energy-efficient than their counterparts or the ones they’re replacing.
    • Function as energy storage, time-shifting, monitoring devices, or enhance another asset’s energy efficiency.
  • For Upgrades: The expenditure should be between 1 July 2023 and 30 June 2024. Upgrades should:
    • Enable the asset to rely solely on electricity or renewables.
    • Boost the energy efficiency of an electricity or renewable-powered asset.
    • Help in storage, time-shifting, or monitoring of electricity from renewables.

❌ What Doesn’t Make the Cut?

  • Assets or improvements using fossil fuels (sorry, hybrids!)
  • Solar panels and motor vehicles, including hybrids and electric ones.
  • Assets whose primary goal is electricity generation.
  • Infrastructure like buildings.
  • Software development-related expenditures.
  • Financing costs.

✅ Top Choices for Upgrades:

  • Electrifying heating/cooling systems.
  • Switching to energy-efficient fridges or induction cooktops.
  • Installing batteries, heat pumps, or solar thermal hot water systems.
  • Opting for an electric reverse cycle air conditioner over a gas heater.
  • Choosing more energy-efficient appliances.

Heads Up! The legislation is still being discussed in Parliament. We’ll keep you posted on any developments. Thinking of splurging for that bonus deduction? Get in touch with us first to ensure your investments qualify.

More details at the ATO website