Ottawa has pledged a two-year, 100 per cent capital cost allowance rate for investment in computers.
The 2009 Federal Budget proposes a temporary 100-percent CCA rate for eligible computers and software (described in CCA Class 50) acquired after January 27, 2009 and before February 2011.
As this enhanced rate will not be subject to the rule that generally only allows half the CCA write-off otherwise available in the year the asset is first available for use, businesses can fully deduct the cost of eligible computers and the system’s software in the first year that CCA deductions are available.
This temporary measure will allow taxpayers to fully expense their investment in computers in one year.
"It will also contribute to boosting Canada's productivity through the faster adoption of newer technology," according to the budget document.
The capital cost allowance system determines how much of the cost of a capital asset a business may deduct each year for tax purposes.
The measure will cost an estimated $340 million in 2009 and $355 million in 2010.
As a small business technology advisor I see this as a welcome relief of an otherwise costly venture and encourage all of my small business clients who were considering replaceing equipment in the next 1-3 years to do so sooner rather than later to take full advantage of the tax savings.
To find out how your business can benefit from both the adoption of new technology and the cost savings the new taxation rules contact The Technology Coach today!
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