Komatsu

In February, the government’s $42 billion Nation Building and Jobs Plan included an investment tax break for all Australian businesses, designed to help boost business investment, bolster economic activity and support jobs.

Under the February plan, businesses – such as civil contractors, quarries, plant hirers and owner-operators – are able to claim a bonus deduction of 30% for eligible assets – including earthmoving and construction and other capital equipment – costing $10,000 or more.

Then in the May 2009 Federal Budget, the bonus deduction was increased to 50% for businesses with an annual turnover of less than $2 million.

To be eligible for the 30% 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.

The latest 50% investment allowance for small business applies to equipment costing $1000 or more, and purchased between December 2008 and the end of this year.

As an example, under the latest 50% business tax break, a piece of equipment costing $200,000 will be eligible to claim a deduction of 50% of that $200,000 – or $100,000. At the standard company tax rate of 30%, that would equate to a reduction in tax for the 2008-09 financial year of $30,000 as well as normal depreciation (although all companies should check with their accountants or financial advisors before making any commitments, to ensure they are eligible).

“When announced, the Federal Government’s 30% business tax break presented an excellent opportunity for contractors, plant hirers and quarry operators to purchase equipment, and gain significant reductions in their tax for this current financial year,” said Sean.

“We are delighted to see it has been expanded to a 50% deduction for our smaller customers – such as owner operators and smaller contractors – and extended until the end of the year.

“These measures present a very good stimulus for the industry at a much-needed time.

“In addition, through Komatsu Australia, we are able to provide flexible finance and total support services to deliver to our customers additional security and peace of mind as they operate in these challenging times.

“Through Komatsu Australia Corporate Finance, we can advise businesses on the best way to tailor their equipment finance to optimise this tax break and maximise productivity,” he said.

“And because we offer the most comprehensive customer service and support network in Australia, Komatsu owners have the security of knowing that their equipment will be fully serviced and supported, no matter where they may have to go in order to obtain work.

“No other supplier of earthmoving and construction equipment in Australia can offer a nationwide customer service and support network to match this.

“As other elements of the government’s stimulus package work their way through the economy – including promised increased infrastructure expenditure, we and our customers would be hopeful of seeing additional civil construction work rolled out in the months and years ahead.

“Therefore, customers who are looking to tender for infrastructure-related work in the coming months would be well-advised to look closely at these ‘one-off’, short-term opportunities to purchase equipment and obtain significant tax deductions,” said Sean.

Komatsu Australia is the Australia, New Zealand and New Caledonian distributor for Komatsu construction, utility and mining equipment.

Further information (AUSTRALIA): Komatsu Australia, ph 1300 KOMATSU (1300 566 287), website www.komatsu.com.au e-mail info@komatsu.com.au