Commonwealth Consolidated Acts Commonwealth Consolidated ActsIncome Tax Assessment Act 1997
1 Paragraphs 160 - 15(1)(a), (b) and (c)
After "how much" (wherever occurring), insert "(expressed as a specified amount)".
Income Tax (Transitional Provisions) Act 1997
2 At the end of subsection 40 - 120(1)
Add:
; and (d) you have not made a choice under section 40 - 137 in relation to the income year.
3 At the end of Subdivision 40 - BA
Add:
40 - 137 Choice to not apply this Subdivision to an asset
(1) You may choose that the decline in value of a particular depreciating asset for an income year, and subsequent income years, is not to be worked out under this Subdivision.
(2) The choice must be in the approved form.
(3) The choice cannot be revoked.
(4) You must give the choice to the Commissioner by the day you lodge your income tax return for the first income year to which the choice relates.
Note: The Commissioner may defer the time for giving the choice: see section 388 - 55 in Schedule 1 to the Taxation Administration Act 1953 .
4 After section 40 - 155
Insert:
40 - 157 Corporate tax entities with income under $5 billion
(1) This section covers you for an income year if:
(a) you are a corporate tax entity at any time in the income year; and
(b) any of the following amounts is less than $5 billion:
(i) the sum of your ordinary income (if any) and statutory income (if any) for the 2018 - 19 income year;
(ii) if the 2019 - 20 income year ends on or before 6 October 2020--the sum of your ordinary income (if any) and statutory income (if any) for the 2019 - 20 income year; and
(c) the sum of the amounts worked out under subsection (3) for the 2016 - 17, 2017 - 18 and 2018 - 19 income years exceeds $100 million.
(2) For the purposes of paragraph (1)(b), disregard non - assessable non - exempt income.
(3) The amount under this subsection for an income year is worked out as follows:
(a) firstly, identify each depreciating asset (other than an intangible asset) that:
(i) you hold at any time in the income year; and
(ii) you started to use, or have installed ready for use, for a taxable purpose in the income year;
(b) next, work out the cost of each of those assets (including any amounts included in the second element of the asset's cost at a time that is in the income year);
(c) finally, work out the total of those costs.
(4) For the purposes of subsection (3), disregard an asset if, at the time you first used the asset, or had it installed ready for use, for a taxable purpose:
(a) it was not reasonable to conclude that you would use the asset principally in Australia for the principal purpose of carrying on a business; or
(b) it was reasonable to conclude that the asset would never be located in Australia.
5 Paragraph 40 - 160(1)(d)
Repeal the paragraph, substitute:
(d) you are covered for the current year by any of the following:
(i) section 40 - 155 (about businesses with turnover under $5 billion);
(ii) section 40 - 157 (about corporate tax entities with income under $5 billion); and
6 At the end of subsection 40 - 160(1)
Add:
; and (f) you have not made a choice under section 40 - 190 in relation to the current year.
7 Subsection 40 - 160(2)
Repeal the subsection, substitute:
Exclusions
(2) However, this section does not apply if:
(a) where section 40 - 155 covers you for the current year (regardless whether section 40 - 157 also covers you for the current year)--an exclusion applies to you and the asset for the current year under section 40 - 165 (about exclusions for businesses with turnover of $50 million or more); or
(b) where section 40 - 157 covers you for the current year (but section 40 - 155 does not):
(i) an exclusion applies to you and the asset for the current year under section 40 - 165; or
(ii) an exclusion applies to you and the asset for the current year under section 40 - 167 (about exclusions for corporate tax entities with income under $5 billion).
8 Section 40 - 165 (heading)
Repeal the heading, substitute:
40 - 165 Exclusions--entities covered by section 40 - 155 or 40 - 157
9 Paragraph 40 - 165(1)(a)
Before "section 40 - 155 would not cover you", insert "where paragraph 40 - 160(2)(a) applies--".
10 After section 40 - 165
Insert:
40 - 167 Exclusions--entities covered by section 40 - 157
(1) For the purposes of subsections 40 - 160(2) and 40 - 170(1A), an exclusion applies to you and an asset for an income year if any of the exclusions in this section applies in relation to the asset.
Exclusion--intangible assets
(2) This exclusion applies in relation to the asset if the asset is an intangible asset.
Exclusion--assets previously held by associates
(3) This exclusion applies in relation to the asset if it had been previously held by an associate of yours.
Exclusion--assets available for use by associates or foreign residents
(4) This exclusion applies in relation to the asset if the asset is available for use, at any time in the income year, by any of the following:
(a) an associate of yours;
(b) an entity that is a foreign resident.
11 Paragraph 40 - 170(1)(c)
Repeal the paragraph, substitute:
(c) you are covered for the current year by any of the following:
(i) section 40 - 155 (about businesses with turnover under $5 billion);
(ii) section 40 - 157 (about corporate tax entities with income under $5 billion); and
12 After subsection 40 - 170(1)
Insert:
Exclusions
(1A) However, this section does not apply if:
(a) section 40 - 157 covers you for the current year (but section 40 - 155 does not); and
(b) an exclusion applies to you and the asset for the current year under section 40 - 167 (about exclusions for corporate tax entities with income under $5 billion).
13 At the end of subsection 40 - 170(1)
Add:
; and (f) you have not made a choice under section 40 - 190 in relation to the current year.
14 At the end of Subdivision 40 - BB
Add:
40 - 185 Balancing adjustment for assets not used or located in Australia
(1) This section applies if the decline in value for a depreciating asset for an income year is worked out under this Subdivision, and at a time (the balancing adjustment time ) in a later income year:
(a) either:
(i) it becomes not reasonable to conclude that you will use the asset principally in Australia for the principal purpose of carrying on a business; or
(ii) it becomes reasonable to conclude that the asset will never be located in Australia; and
(b) none of the requirements in paragraphs 40 - 295(1)(a), (b) or (c) of the Income Tax Assessment Act 1997 are satisfied in relation to the asset.
Balancing adjustment event and termination value
(2) For the purposes of Subdivision 40 - D of the Income Tax Assessment Act 1997 assume that, at the balancing adjustment time, you stop using the asset, or having it installed ready for use, for any purpose and you expect never to use it, or have it installed ready for use, again.
Cost resulting from balancing adjustment event
(3) For the purposes of section 40 - 180 of the Income Tax Assessment Act 1997 assume that the reference in item 3 of the table in subsection 40 - 180(2) of that Act to "because you stop using it for any purpose expecting never to use it again" were instead a reference to "because of section 40 - 185 of the Income Tax (Transitional Provisions) Act 1997 ".
Subdivision does not apply for income year after balancing adjustment event
(4) If a balancing adjustment event happens to a depreciating asset you hold because of this section, this Subdivision cannot apply to work out the decline in value of the asset for a later income year.
40 - 190 Choice to not apply this Subdivision to an asset for an income year
(1) You may choose that the decline in value of a particular depreciating asset for an income year is not to be worked out under this Subdivision.
(2) The choice must be in the approved form.
(3) The choice cannot be revoked.
(4) You must give the choice to the Commissioner by the day you lodge your income tax return for the income year to which the choice relates.
Note: The Commissioner may defer the time for giving the choice: see section 388 - 55 in Schedule 1 to the Taxation Administration Act 1953 .
15 Application
To avoid doubt, section 40 - 185 of the Income Tax (Transitional Provisions) Act 1997 (as inserted by this Schedule) can apply even if the balancing adjustment time mentioned in that section occurs before the commencement of this Schedule.
Part 2 -- Technical amendments
Income Tax (Transitional Provisions) Act 1997
16 Subsection 328 - 181(5) (heading)
Repeal the heading, substitute:
Low pool value