2024 guide: Tax benefits for pharmacy equipment purchases

Purchasing equipment is a significant expense for compounding pharmacies, but it can also offer valuable tax benefits. If you're planning to invest in new equipment for your pharmacy, you'll be pleased to know that certain business expenses, including pharmacy equipment, can be tax-deductible.

And for the 2023-2024 income year, there are some new rules and incentives to be aware of.

Instant write-off for small businesses

Under the Small Business Support (SBS) instant write-off, small businesses with an aggregated turnover of less than $10 million can immediately deduct the cost of eligible equipment purchases under $20,000.

To qualify, the equipment must be first used or installed and ready for use between July 1, 2023, and June 30, 2024.

What's new in 2024?

The SBS instant asset write-off scheme was initially set to expire in June 2023, but it's been extended through at least June 2024.

Additionally, the asset value threshold has significantly increased from $1,000 to $20,000, providing more flexibility and potential tax savings for small businesses.

Writing off equipment purchases

The $20,000 threshold applies on a per-asset basis, meaning you can write off multiple pieces of equipment as long as each one is valued below the threshold.

If the cost of an asset exceeds $20,000, it can still be placed in the small business simplified depreciation pool, with a 15% depreciation rate in the first year and 30% in subsequent years.

Consider the following example:

• You own a pharmacy with an aggregated turnover of less than $1 million.
• Your annual cost of goods sold and operating expenses, including purchases, office supplies, insurance, and salaries, is $700,000.
• You decide to purchase a new hood for $10,000.

Under the SBS instant asset write-off scheme, you can immediately deduct the entire $10,000 cost of the hood. With a 30% Corporate Income Tax Rate, this translates to $3,000 in tax savings.

What equipment qualifies?

The SBS instant asset write-off scheme covers all tools and equipment used in your pharmacy operations. To view the complete list of eligible assets and exclusions, click here.

What if my business's turnover exceeds $10 million?

Unfortunately, businesses with an aggregated turnover of more than $10 million are not eligible for the SBS instant asset write-off scheme. However, other tax benefits and depreciation methods may be available to you. Please get in touch with your tax advisor for more detailed information.

How Medisca can help you save

As your dedicated Partners in Wellness, Medisca is here to support your pharmacy's growth with high-quality equipment at competitive prices. As the financial year-end approaches, Medisca holds its annual equipment sale, allowing you to maximize your tax savings by taking advantage of our best deals.

Shop for savings now

Disclaimer: Savings up to 35%. Limited time offer on selected equipment items to Medisca customers located in Canada only, from November 1, 2024 to December 15, 2024 or while supplies last, whichever comes first. Taxes, shipping and handling charges still apply. By using this Offer you agree, if applicable, to make all disclosures required to any governmental authority, under federal, state or provincial law and to any private reimbursement entity. Offer cannot be combined with any other offer or promotion. Offer is non-transferable. Additional terms and conditions apply for all financing inquiries. Please reach out to your medisca representatives for more financial details. Medisca in its sole discretion may refuse to apply any offer. Medisca reserves the right to modify or cancel the Offer at any time in its sole discretion. For more information, please speak to your Medisca representative.

Offer ends December 15, 2024.