Small business instant asset write-off to be reintroduced

As part of the 2023–24 Federal Budget, the instant asset write-off has been reintroduced by the federal government.

With the temporary full expensing (TFE) incentive, which is available to small and medium businesses with a turnover less than $5 billion, due to expire on 30 June 2023, this measure will provide small businesses relief from inflation and other market volatility pressures.

Eligibility criteria

The following conditions must be satisfied in order to be eligible for the instant asset write-off:

  • The asset must be first installed or ready to use between 1 July 2023 and 30 June 2024
  • The asset must cost less than $20,000
  • The annual aggregated turnover of the business must be less than $10 million (s 328-110 ITAA 1997)

The $20,000 threshold will apply on a per asset basis, so small businesses can instantly write off multiple assets.

Future prospects

This measure comes after the prior instant asset write-off measure ended in June 2021 pertaining to a more inclusive TFE incentive which was introduced to boost businesses struggling due to COVID-19 and business disruptions due to government-imposed mandatory lockdowns.

With the TFE incentive end date approaching, small and medium businesses with a turnover of more than $10 million should consider investing in assets prior to 30 June 2023 to avail the TFE tax deduction.

Small businesses that are eligible for this temporary asset write-off may want to consider making asset purchases that exceed the $20,000 threshold before 30 June 2023.

Contact us

Please feel free to contact our office if you need more information about this proposed tax incentive.


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