Commonwealth Consolidated Acts Commonwealth Consolidated Acts
Income Tax Assessment Act 1997
1 Section 11 - 55 (after table item headed "employment")
Insert:
environment |
|
water infrastructure improvement payments ......... | 59 - 65 |
2 Section 12 - 5 (table item headed "water facilities")
Repeal the item, substitute:
water facilities |
|
improvements ............................. | 26 - 100 |
see also capital allowances |
|
3 At the end of Division 26
Add:
26 - 100 Expenditure attributable to water infrastructure improvement payments
(1) You cannot deduct under this Act * SRWUIP expenditure if the matching * SRWUIP payment is, or is reasonably expected to be, * non - assessable non - exempt income (whether for you or for another entity) under section 59 - 65.
(2) SRWUIP expenditure , in respect of a * SRWUIP program, is expenditure that:
(a) you incur that satisfies an obligation under an * arrangement under the program; and
(b) is, or is reasonably expected to be, matched by a * SRWUIP payment in respect of the program.
(3) However, treat the expenditure as if it had never been SRWUIP expenditure if it is no longer reasonable to expect that the expenditure will be matched by a * SRWUIP payment in respect of the program.
4 After section 40 - 220
Insert:
40 - 222 Cost reduced by water infrastructure improvement expenditure
The * cost of a * depreciating asset is reduced by any portion of it that consists of expenditure that you cannot deduct because of section 26 - 100.
5 Subsection 40 - 515(3)
Repeal the subsection, substitute:
Limit on deduction
(3) You cannot deduct more in total than:
(a) for a * water facility--the amount of capital expenditure (disregarding expenditure that you cannot deduct because of section 26 - 100 (about water infrastructure improvement expenditure)) incurred on the facility; or
(b) for a * horticultural plant--the amount of capital expenditure incurred on the plant.
6 Section 40 - 540 (definition of expenditure )
After "capital expenditure", insert "(disregarding expenditure that you cannot deduct because of section 26 - 100 (about water infrastructure improvement expenditure))".
7 At the end of subsection 43 - 70(2)
Add:
; or (i) expenditure that you cannot deduct because of section 26 - 100 (about water infrastructure improvement expenditure).
8 At the end of Division 59
Add:
59 - 65 Water infrastructure improvement payments
(1) A * SRWUIP payment, in respect of a * SRWUIP program, to an entity that is a participant in the program is not assessable income and is not * exempt income if:
(a) the entity has made a choice under subsection ( 2) for the program; and
(b) if the payment is an * indirect SRWUIP payment--the entity * derives the payment because it owns an asset (otherwise than under a * financial arrangement) to which the program relates.
Note: One of the requirements for a SRWUIP payment is for the SRWUIP program to be on the published list of SRWUIP programs for the day the payment is made (see subsection 59 - 67(5)).
(2) An entity may make a choice for a * SRWUIP program under this subsection if, in an income year:
(a) the entity * derives a * SRWUIP payment in respect of the program but has not , in an earlier income year:
(i) derived a SRWUIP payment in respect of the program; or
(ii) incurred * SRWUIP expenditure in respect of the program; or
(b) the entity incurs SRWUIP expenditure in respect of the program but has not , in an earlier income year:
(i) derived a SRWUIP payment in respect of the program; or
(ii) incurred SRWUIP expenditure in respect of the program.
Disregard subsection 26 - 100(3) (about expenditure that is never SRWUIP expenditure) for the purposes of this subsection.
(3) The choice must be:
(a) made in the * approved form; and
(b) made:
(i) unless subparagraph ( ii) or (iii) applies--on or before the day the entity lodges its * income tax return for the income year; or
(ii) if the Commissioner makes an assessment of the entity's taxable income for the income year before the entity lodges its income tax return for the income year, and subparagraph ( iii) does not apply--on or before the day the Commissioner makes that assessment; or
(iii) within such further time as the Commissioner allows.
The choice cannot be revoked.
Integrity rule
(4) Subsection ( 1) does not apply if, at the time the entity * derives the * SRWUIP payment in respect of a * SRWUIP program, it is reasonable to conclude that:
(a) the entity will not incur expenditure at least equal to the payment on works required by the program; and
(b) despite not incurring such expenditure, the entity will comply with the program because an * associate of the entity will incur expenditure on those works; and
(c) the associate has not made, and will not make, a choice under subsection ( 2) for the program.
(1) A SRWUIP program is a program under the program administered by the Commonwealth known as the Sustainable Rural Water Use and Infrastructure program.
(2) A SRWUIP payment , in respect of a * SRWUIP program, is:
(a) a * direct SRWUIP payment in respect of the program; or
(b) an * indirect SRWUIP payment in respect of the program.
(3) A direct SRWUIP payment is a payment by the Commonwealth to a participant in a * SRWUIP program to the extent that it is made under that program.
(4) An indirect SRWUIP payment is a payment to a participant in a * SRWUIP program to the extent that it is reasonably attributable to a payment by the Commonwealth under that program.
(5) For the purposes of subsections ( 3) and (4), treat a payment as being made under a * SRWUIP program only if that SRWUIP program is on the published list of SRWUIP programs (see section 59 - 70) for the day the payment is made.
(6) However, treat a payment as if it had never been made under a * SRWUIP program to the extent that the Commonwealth seeks to recover the payment.
Example: The Commonwealth seeks to recover half of a payment made under a SRWUIP program. The remaining half is still a payment made under the SRWUIP program.
59 - 70 List of SRWUIP programs
(1) The * Water Secretary must keep a list of * SRWUIP programs. The list must:
(a) specify the days for which each program is on the list; and
(b) be published on the * Water Department's website.
Example: A program could be listed for each day on or after 1 July 2011.
Entering SRWUIP programs on the list
(2) The * Water Secretary must enter on the list each * SRWUIP program (and its days) in accordance with a direction under subsection ( 3).
(3) The Minister and the * Water Minister may jointly direct the * Water Secretary to enter a program (and its days) on the list only if the Water Minister has notified the Minister in writing that the Water Minister is satisfied that the program:
(a) is a * SRWUIP program; and
(b) will generate efficiencies in water use through infrastructure improvements.
(4) A direction under subsection ( 3) must be in writing and specify the days for which the * SRWUIP program is to be on the list. Some or all of those days may be before the day the direction is given.
Changing the days for which a SRWUIP program is listed
(5) The Minister and the * Water Minister may jointly direct the * Water Secretary to change the list to specify:
(a) additional days (including days before the day the direction is given) for which a * SRWUIP program is on the list; or
(b) the final day (which must be after the day the direction is given) for which a SRWUIP program is on the list.
The * Water Secretary must change the list accordingly.
(6) A direction under subsection ( 5) must be in writing.
Giving directions
(7) The Minister and the * Water Minister must have regard to the policies and budgetary priorities of the Commonwealth Government in deciding whether to give a direction under subsection ( 3) or (5).
59 - 75 Commissioner to be kept informed
The * Water Secretary must notify the Commissioner about each payment described in subsection 59 - 67(6) that the Commonwealth seeks to recover.
Section 170 of the Income Tax Assessment Act 1936 does not prevent the amendment of an assessment for the purpose of giving effect to an outcome that is consequential on any or all of the following events:
(a) the inclusion of a * SRWUIP program on the published list of SRWUIP programs (see section 59 - 70);
(b) the publication of a change to a SRWUIP program's listing on the published list of SRWUIP programs;
(c) the Commonwealth seeking to recover a payment described in subsection 59 - 67(6);
(d) the making of a choice under subsection 59 - 65(2);
(e) the event that causes subsection 26 - 100(3) to treat expenditure as if it had never been * SRWUIP expenditure;
if the amendment is made at any time during the period of 2 years starting immediately after that event.
Note: Section 170 of the Income Tax Assessment Act 1936 specifies the usual period within which assessments may be amended.
9 At the end of section 110 - 38
Add:
(7) Expenditure does not form part of any element of the cost base to the extent that section 26 - 100 prevents it being deducted.
Note: Section 26 - 100 denies deductions for certain expenditure on water infrastructure improvements.
10 After subsection 110 - 55(9F)
Insert:
(9G) Expenditure does not form part of the reduced cost base to the extent that section 26 - 100 prevents it being deducted.
Note: Section 26 - 100 denies deductions for certain expenditure on water infrastructure improvements.
11 After paragraph 118 - 37(1)(g)
Insert:
(ga) a * water entitlement, to the extent that the CGT event happens because an entity * derives a * SRWUIP payment that is * non - assessable non - exempt income under section 59 - 65;
(gb) a * SRWUIP payment you derive that is non - assessable non - exempt income under section 59 - 65;
12 Subsection 995 - 1(1)
Insert:
"direct SRWUIP payment" has the meaning given by subsection 59 - 67(3).
13 Subsection 995 - 1(1)
Insert:
"indirect SRWUIP payment" has the meaning given by subsection 59 - 67(4).
14 Subsection 995 - 1(1)
Insert:
"SRWUIP expenditure" has the meaning given by subsections 26 - 100(2) and (3).
15 Subsection 995 - 1(1)
Insert:
"SRWUIP payment" has the meaning given by subsection 59 - 67(2).
16 Subsection 995 - 1(1)
Insert:
"SRWUIP program" has the meaning given by subsection 59 - 67(1).
17 Subsection 995 - 1(1)
Insert:
"Water Secretary" means the Secretary of the * Water Department.
18 Application of amendments
The amendments made by this Schedule apply in relation to payments made on or after 1 April 2010 by the Commonwealth under a SRWUIP program.
19 Transitional provision--time for making choices
(1) This item applies if, apart from this item, a choice under subsection 59 - 65(2) of the Income Tax Assessment Act 1997 must be made on or before the day this Schedule commences.
(2) Despite paragraph 59 - 65(3)(b) of that Act, the choice must be made and given to the Commissioner:
(a) within the 2 year period starting at that commencement; or
(b) within such further time as the Commissioner allows.
Note: The requirements for making the choice must still be satisfied (see subsection 59 - 65(2) of that Act). This item does not change the income years referred to in that subsection.