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INCOME TAX ASSESSMENT ACT 1997 - SECT 420.15 What you can deduct

INCOME TAX ASSESSMENT ACT 1997 - SECT 420.15

What you can deduct

  (1)   You can deduct expenditure to the extent that you incur it in becoming the * holder of a * registered emissions unit.

Timing

  (2)   You deduct the expenditure in the income year in which you start to * hold the * registered emissions unit.

Australian carbon credit units

  (4)   You cannot deduct under this section expenditure you incur in becoming the * holder of an * Australian carbon credit unit issued to you in accordance with the Carbon Credits (Carbon Farming Initiative) Act 2011 unless you incur the expenditure in preparing or lodging:

  (a)   an application for a certificate of entitlement (within the meaning of that Act); or

  (b)   an offsets report (within the meaning of that Act).

No deduction if sale proceeds would not be assessable

  (5)   You cannot deduct under this section expenditure you incur in becoming the * holder of a * registered emissions unit if, assuming that you had sold the unit to someone else immediately after you started to * hold the unit, the proceeds of the sale would not have been included in your assessable income under section   420 - 25.

Note:   Under the International Tax Agreements Act 1953 , for some foreign residents, the proceeds of the sale of a registered emissions unit are not assessable income in Australia.

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