ACCELERATED DEPRECIATION OF
MOTOR VEHICLES FOR SMALL BUSINESS

You may have already heard the Federal Government has recently provided a number of tax breaks for
small business (companies with an annual turnover under $2 million).

This means small businesses will be able to claim an immediate deduction for new and used vehicles
they purchase, where the cost is less than $20,000 ($22,000 inc GST), subject to business use.

The $22,000 threshold will apply to new and used vehicles acquired and installed ready for use
between 13 May 2015 and 30 June 2017. From 1 July 2017, the thresholds revert back to the existing
arrangements. Vehicles valued at $22,000 or more will not be immediately deductible. However, they
may be placed in the small business depreciation pool and depreciated at 15% in the first year and 30%
in subsequent years. The pool can be immediately deducted if the balance falls below $22,000 over the
period (including existing pools).

 

SO WHO IS ELIGIBLE?

The $22,000 tax break applies to businesses that can demonstrate ongoing activity via quarterly
Business Activity Statements.

 

WHAT IS A SMALL BUSINESS?

Generally, a small business is one with an aggregated turnover of less than $2million.

 

WHAT IS THE TAX BENEFIT?

A small business will be able to accelerate a deduction for depreciation of up to $22,000.

 

WHAT’S COVERED?

Cars and Vans under $22,000 are immediately 100% tax deductible.

 

More information on the incentive is available on our website or via the ATO.


#This assumes the Small Business Entity is a company and is registered for GST and the car has 100% business use. Not all models within the range pictured are eligible for the tax break. This document has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The information cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice.