Tax deduction on expenditure to improve energy efficiency

Overview

The small business energy incentive is designed to help businesses improve energy efficiency and save on energy bills.

Businesses with an aggregated annual turnover of less than $50 million will have access to a bonus 20% tax deduction for the cost of eligible assets and improvements that support more efficient use of energy.

The incentive applies to eligible expenditure on assets between 1 July 2023 and 30 June 2024 (the ‘bonus period’).

The incentive also applies to eligible expenditure on improvements to existing assets incurred during the bonus period.

Up to $100,000 of total expenditure will be eligible for the incentive, with the maximum bonus tax deduction being $20,000.

The bonus deduction is separate and additional to other deductions you would ordinarily claim under taxation law.