The Federal Government’s recently-announced 30% business tax break means that purchases of manufacturing-related products will become cheaper for companies looking to invest in their future.
National Manufacturing Week (NMW 2009), to be held at Melbourne Convention and Exhibition Centre, presents an opportunity for the manufacturing sector.
According to Reed Exhibitions , event organiser of the show, businesses looking to increase productivity, reduce costs and become efficient will find NMW 2009 an opportunity to look at the recent technologies and innovations, and take advantage of the investment tax break.
Reed Exhibitions observe that the NMW 2009 will help to reduce the cost of new equipment purchases for manufacturers, workshops and suppliers. The NMW will present opportunities to make investment decisions and place orders which will attract the allowance. The Federal Government’s $42 billion Nation Building and Jobs Plan includes an investment tax break for all Australian businesses, designed to boost business investment, bolster economic activity and support jobs.
Under the government’s plan, (which was passed by the Senate) businesses such as manufacturers, fabricators, workshops, warehouses and others will be able to claim a bonus deduction of 30% for eligible assets including manufacturing, processing, electronic, IT and other capital equipment costing $10,000 or more.
Small businesses with a turnover of $2 million a year or less are eligible for the tax break on items costing $1000 or more. To be eligible for the investment allowance, businesses must acquire or start to hold the equipment under a contract entered into between December 13 2008 and the end of June 2009 and have it installed ready for use by the end of June 2010.
For eligible assets purchased between July 1, 2009 and December 31, 2009, the bonus deduction drops to 10%. These deductions are on top of the usual capital allowance deduction claimable for the asset as part of a business’s income tax return.
As an example, under the 30% business tax break, a piece of fabricating equipment costing $100,000 will be eligible to claim a deduction of 30% of that $200,000 or $30,000. At the standard company tax rate of 30%, that would equate to a reduction in tax for the 2008-09 financial year of $9000.