Contact: Melinda Loew
Deloitte
Media Relations
02 9322 7146

Contact: Stuart Osborne
Deloitte
Partner, Corporate Tax
+61 2 9255 8353

IT hardware providers stand to be one of the big winners from the flow on effects of the increase in accelerated depreciation rates to 200% of the base rate announced in last night’s Federal Budget.

Deloitte Corporate Tax Partner Stuart Osborne said hardware providers could see an uptake in sales as the higher up front tax deductions become more attractive. 

“The new depreciation rate will secure deductions which will more appropriately align to the decline in value of the assets with factors such as technological obsolescence.

“For example a laptop computer purchased after 9 May 2006 will attract a deduction of 66.66% of its value in the first year of purchase,” he said.

“As well as computing equipment, telecommunications equipment providers may also come out ahead.

 “However, as the effective life of a mobile according to the Commissioner is 6.67 years, then even with the budget bonus, the first year write off on a mobile is 30% (from 22.5%). 

“Importantly, software providers miss out on the party as software for use in a business does not qualify for accelerated depreciation,” Mr Osborne said.