• Scenario examples

    Example 1

    A medium sized building maintenance business with an asset register purchases many small hand tools. All tools purchased for $100 or less that aren't recorded on the asset register are claimed as outright deductions in the year of purchase.

    Example 2

    A small cafe owner, who doesn't maintain an asset register, purchases spoons, coffee cups, espresso glasses and saucers every few months to maintain constant levels of stock, as these items are damaged or stolen. The owner spends around $60 every three or four months for these small items and claims the whole expense as a deduction in that income year.

    End of example

    The $100 threshold limit and GST

    The $100 threshold rule includes GST in the price of the item. There's no need to separately identify any GST applicable to individual items. Division 27 of the Income Tax Assessment Act 1997 (ITAA 1997) ensures a deduction isn't available for expenditure to the extent it relates to an input tax credit or decreasing adjustment under the GST legislation.

    Record keeping requirements

    The threshold rule doesn't mean record retention requirements are changed. You must continue to keep all relevant records as required under income tax and other taxation laws.

    More information

    See also:

      Last modified: 25 Jan 2017QC 17149