A NEW TAX SYSTEM (TAX ADMINISTRATION) ACT (NO. 2) 2000 - SCHEDULE 4A Income tax deductions for GST-related expenditure

A NEW TAX SYSTEM (TAX ADMINISTRATION) ACT (NO. 2) 2000 - SCHEDULE 4A

Income Tax Assessment Act 1997

1   Subsection 25 - 80(1)

After " * plant", insert "for the income year in which you incur the expenditure or enter into a contract to carry out the upgrade".

2   Paragraph 25 - 80(1)(a)

After "incur the expenditure", insert "or enter into the contract".

3   Paragraph 25 - 80(1)(c)

After "incur the expenditure", insert "or enter into the contract".

4   Paragraph 25 - 80(1)(d)

Omit " 1   July 2000 " (wherever occurring), substitute " 1   July 2001 ".

5   Paragraph 25 - 80(1)(d)

Omit "immediately".

6   Paragraph 25 - 80(1)(e)

After "incur the expenditure", insert "or enter into the contract".

7   At the end of subsection 25 - 80(1)

Add:

If you have already deducted the expenditure but you fail to comply with paragraph   (d) of this subsection, your assessment may be amended to disallow the deduction.

8   Subsection 25 - 80(2)

After "incur the expenditure", insert "or enter into the contract".

9   At the end of section   25 - 80

Add:

Reducing the deduction

  (4)   Reduce your deduction by an amount that reasonably reflects the extent (if any) you neither used the upgraded * plant, nor had it * installed ready for use, for the * purpose of producing assessable income during the period in the income year you were its owner or * quasi - owner.

  (5)   Also, if you do not become the owner or * quasi - owner of the upgraded * plant by the end of 30   June 2000, reduce your deduction by an amount that reflects the extent (if any) that, as at that time, you reasonably expect neither to use the upgraded plant, nor to have it * installed ready for use, for the * purpose of producing assessable income during that part of the * financial year beginning on 1   July 2000 for which you expect to be its owner or quasi - owner.

10   At the end of section   42 - 15 (after the notes)

Add:

Note 3:   The requirements in paragraphs   (a) and (b) do not apply in the case of certain plant acquired for GST compliance: see section   42 - 168.

11   Subsection 42 - 168(1)

After "income year in which you", insert "incur the cost or enter into a contract to".

12   Paragraph 42 - 168(1)(a)

Omit "become the owner or quasi - owner of the plant", substitute "incur the cost or enter into the contract".

13   At the end of subsection 42 - 168(1)

Add:

  ; and (e)   before 1   July 2001 , you become the owner or * quasi - owner of the * plant and use it, or have it * installed ready for use, for the * purpose of producing assessable income.

If you have already deducted the cost but you fail to comply with paragraph   (e), your assessment may be amended to disallow the deduction.

14   After subsection 42 - 168(1)

Insert:

Ownership and use not required in 1999 - 2000

  (1A)   The requirements in paragraphs 42 - 15(a) and (b) do not apply to a deduction that meets the requirements of subsection   (1) of this section.

15   Subsection 42 - 168(2)

Omit "become the owner or * quasi - owner of the * plant", substitute "incur the * cost or enter into the contract".

16   At the end of section   42 - 170

Add:

Special reduction for plant acquired to meet GST obligations etc.

  (4)   A deduction covered by section   42 - 168 can be reduced under subsection   (5) if you do not become the owner or * quasi - owner of the relevant * plant by the end of 30   June 2000 .

  (5)   Reduce your deduction by an amount that reflects the extent (if any) that, as at that time, you reasonably expect neither to use the * plant, nor to have it * installed ready for use, for the purpose of producing assessable income during that part of the * financial year beginning on 1   July 2000 for which you expect to be the owner or * quasi - owner of the plant.