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New energy efficiency tax incentive for SMEs announced for 2023-24 Budget

The Australian Government has shared details of a new tax incentive which will be included in the upcoming federal Budget. The Small Business Energy Incentive is a bonus tax deduction to provide businesses with annual turnover of less than $50 million with an additional 20% deduction on spending that supports electrification and more efficient use of energy.

The Government estimates up to 3.8 million small‑ and medium‑sized could benefit from the incentive, installing and upgrading equipment that will provide ongoing emission and bill savings.

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

Measures eligible for the incentive will include electrifying heating and cooling systems, upgrading to more efficient fridges and induction cooktops, and installing batteries and heat pumps. Eligible assets or upgrades will need to be first used or installed ready for use between 1 July 2023 and 30 June 2024.


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