1 July 2009

Subject: Investment Allowance

On the 12th December 2008 the government announced a temporary investment allowance.

From 1 July 2009 to 31 December 2009 the allowance will be in the form of an additional tax deduction equal to 10 per cent of the cost of an eligible asset for large business, and 50 per cent of the cost of an eligible asset for small business. This is in addition to the standard depreciation claimed for such assets. Small business entities will need to spend a minimum of $1,000 per asset in order to qualify for the tax deduction. All other businesses will need to meet a minimum expenditure threshold of $10,000 per asset.

For example, on a $30,000 forklift this equates to an extra $3,000 "one off" tax deduction for a large business and an extra $15,000 "one off" tax deduction for small business.

To be an eligible asset the following criteria are required:

• Asset purchased between 1 July 2009 to 31 December 2009 for large business and 13 December 2008 to 31 December 2009 for small business (ie. company turnover is less than $2mil per annum). To be an eligible investment the taxpayer must start to hold the asset under a contract entered into between those times.
• For new assets or new expenditure on existing assets only (used or secondhand assets do not qualify). The word "New" refers to assets that have not been used before by anyone, anywhere.
• Expenditure on existing assets that qualify for the tax deduction can also include new attachments for Toyota Material Handling equipment
• Demonstration units will qualify as 'new' assets, provided they have been used for reasonable testing & trialing.
• Cost more than $10,000 for large business and a $1,000 for small business.
• Taxpayer must be the legal owner of the asset and carrying on a business.
• For tax purposes entitled to claim a deduction for depreciation.
• Installed & ready for use by 31 December 2010.

The allowance can be claimed through the entities income tax return.

Toyota Material Handling customers who buy new forklifts, skid steer loaders or tow tractors out right may claim the deduction. Customers renting forklifts are not considered legal owners for tax purposes and therefore can not claim the deduction.

Toyota Material Handling Australia advises any customers who buy forklifts to take advantage of the additional tax deduction to seek independent advice from their accountant.