COVID-19 National: Business – Backing Business Investment (BBI)

This program is a time limited 15-month investment incentive which aims to support business investment and economic growth over the short-term, by accelerating depreciation deductions to help the economy withstand and recover from the economic impact of Coronavirus.

Eligible businesses, for the 2019-20 and 2020-21 income years, may be able to deduct the cost of new depreciating assets at an accelerated rate. For each new asset, the accelerated depreciation deduction applies in the income year that the asset is first used or installed ready for use for a taxable purpose.

Businesses can claim the deduction when lodging their tax return for the income year. The usual depreciating asset arrangements apply in the subsequent income years that the asset is held.

Businesses do not need to apply for the BBI. They can claim the deduction when lodging their tax return for the income year.

There is no limit on the number of eligible assets that businesses can apply accelerated depreciation to in an income year, unless it is a passenger vehicle.

Eligible applicants include businesses who must:
- Have an aggregated turnover of less than $500 million.
- Not have already applied other depreciation deductions or the instant asset write off.

To be eligible to apply the accelerated rate of deduction, the depreciating asset must:
- Be new and not previously held by another entity (other than as trading stock).
- Be first held on or after 12 March 2020.
- First used or first installed ready for use for a taxable purpose on or after 12 March 2020 until 30 June 2021.
- Not be an asset to which an entity has applied the instant asset write-off rules or depreciation deductions.

Eligible assets do not include:
- Second-hand depreciating assets.
- Some specific Division 40 assets subject to low value and software development pools.
- Certain primary production assets.
- Buildings and other capital works for which businesses can deduct amounts under Division 43.
- Other specific capital asset and expense deductions.
- Assets businesses were committed to acquiring before 12 March 2020.