Real Financial Impact: A $50,000 Tech Example

Let's say you invest $50,000 in a new, critical piece of technology, like a high-performance server or a key manufacturing automation system.

With the Investment Boost:

• Immediate 20% Deduction (Year 1): You get an upfront deduction of $10,000 ($50,000 × 20%).
• Standard Depreciation (Year 1, on reduced base): Your normal depreciation (e.g., 15%) is then calculated on the remaining $40,000 ($50,000 - $10,000), which is $6,000.
• Total First-Year Deduction: This adds up to $16,000.

Given New Zealand's 28% company tax rate, this $16,000 deduction means your company's tax bill is reduced by $4,480 ($16,000 × 28%). This $4,480 stays in your business, providing immediate cash flow that can be reinvested into further technology advancements.

*Disclaimer: This information is for general guidance only and does not constitute financial or tax advice. For specific advice tailored to your business, please consult with a qualified financial or tax professional. Information is current as of May 2025. For the most up-to-date details, refer to the Inland Revenue website.