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  1. Is the company a small or large business? There are different taxation rules for small business so you will need to read, Are you a small business for the current year?

  2. Does the investment allowance apply if I am a small business or a large business? This information can be found here It is important to note that there are different asset rules for small and large businesses.

  3. Which assets are eligible? Will spending on new computer software be eligible? Or does the asset need to possess more of a plant type characteristic? Does the investment allowance apply to motor vehicles and is that expenditure subject to the ‘Luxury Car Limits’? What about second-hand assets? Are demonstrator motor vehicles considered second hand? What about new expenditure on existing equipment? Click here for more

  4. What sort of timeframe do we have to purchase the asset and have it installed ready for use? Click here for more

  5. How much is the allowance? How much do we have to spend? Is that value inclusive or exclusive of GST? Click here for more

  6. What are the consequences (clawback) when we sell or dispose of the asset? Click here for more

  7. What about financing? Are leased assets eligible? Click here for more

    Now that you have established the eligibility criteria its time to put together your tax planning proposal.

    1. Details such as type of plant, equipment or motor vehicle to be purchased.
    2. Cost of the plant, equipment or motor vehicle.
    3. Additional cashflows and additional costs attributable to the new plant equipment or motor vehicle. A popular method is the cost/benefit analysis. It is important to consider both quantitative and qualitative data.
    4. Now the taxation savings need to be calculated.

      click here to download an excel spreadsheet to assist with calculations

    5. The final step is to collate all of the information and present it to the CEO in the form of a report.