Commonwealth Numbered Acts

TAXATION LAWS AMENDMENT ACT (No. 2) 1992No. 80, 1992 - SECT 7

7. Section 55 of the Principal Act is repealed and the following section is
substituted: Annual depreciation percentage

"55.(1) The annual depreciation percentage for a unit of property owned by a
taxpayer is worked out as follows.

"(2) (Step 1: 100% depreciation) If:

   (a)  either:

        (i)    the cost of the property does not exceed $300 or such higher
               amount as is prescribed; or

        (ii)   the effective life of the property is less than 3 years; and

   (b)  the taxpayer does not nominate, in accordance with subsection (8), an
        annual depreciation percentage less than 100%; the annual depreciation
        percentage is 100%.

"(3) (Step 2: scientific research) If:

   (a)  step 1 does not apply; and

   (b)  the property is used by the taxpayer for the purposes of scientific
        research only; and

   (c)  either:

        (i)    the effective life of the property is 5 years or more; or

        (ii)   the property is an eligible motor vehicle or an eligible
               artwork; and

   (d)  the property was acquired by the taxpayer before 1 July 1995; and

   (e)  the taxpayer does not nominate, in accordance with subsection (8), an
        annual depreciation percentage less than 50%; the annual depreciation
        percentage is 50%.

"(4) (Step 3: employee amenities) If:

   (a)  neither step 1 nor 2 applies; and

   (b)  the property is used by the taxpayer principally for the purpose of
        providing clothing cupboards, first aid, rest-room or recreational
        facilities, or meals or facilities for meals:

        (i)    for persons employed by the taxpayer in a business carried on
               by the taxpayer for the purpose of producing assessable income;
               or

        (ii)   for the care of children of those persons; and

   (c)  either:

        (i)    the effective life of the property is 5 years or more; or

        (ii)   the property is an eligible motor vehicle or an eligible
               artwork; and

   (d)  the taxpayer does not nominate, in accordance with subsection (8), an
        annual depreciation percentage less than 50%; the annual depreciation
        percentage is 50%.

"(5) (Step 4: general rates) If:

   (a)  none of steps 1, 2 and 3 apply; and

   (b)  the property is not an eligible motor vehicle; and

   (c)  the property is not an eligible artwork; and

   (d)  the taxpayer does not nominate, in accordance with subsection (8), an
        annual depreciation percentage less than the percentage worked out
        using the following table; the annual depreciation percentage is
        worked out using the following table:
    Years in effective life             Annual depreciation percentage

    3 to fewer than 5                               60%

    5 to fewer than 6 2/3                           40%

    6 2/3 to fewer than 10                          30%

    10 to fewer than 13                             25%

    13 to fewer than 30                             20%

    30 or more                                      10%


"(6) (Step 5: special broadbanded rates for eligible motor vehicles) If:

   (a)  none of steps 1, 2, 3 and 4 apply; and

   (b)  the property is an eligible motor vehicle; and

   (c)  the taxpayer does not nominate, in accordance with subsection (8), an
        annual depreciation percentage less than the percentage worked out
        using the following table; the annual depreciation percentage is
        worked out using the following table:
    Years in effective life           Annual depreciation percentage

    3 to fewer than 5                            50%

    5 to fewer than 6 2/3                        30%

    6 2/3 to fewer than 10                       22.5%

    10 to fewer than 13                          15%

    13 to fewer than 20                          11.25%

    20 to fewer than 40                           7.5%

    40 or more                                    3.75%


"(7) (Step 6: special loaded rates for eligible artworks) If:

   (a)  none of steps 1, 2, 3, 4 and 5 apply; and

   (b)  the property is an eligible artwork; and

   (c)  the taxpayer does not nominate, in accordance with subsection (8), an
        annual depreciation percentage less than the percentage calculated (to
        2 decimal places) using the following formula; the annual depreciation
        percentage is the percentage calculated (to 2 decimal places) using
        the formula:
1.8
                               No. of years in   x   100

effective life where: 'No. of years in effective life' means the number
(calculated to 2 decimal places) of years in the effective life of the
property.

"(8) A taxpayer may nominate a percentage as the annual depreciation
percentage for a specified unit of property in respect of which depreciation
is allowable to the taxpayer for a specified year of income if the nominated
percentage is less than the percentage that would otherwise be that annual
depreciation percentage.

"(9) In this section: 'eligible artwork' means:

   (a)  a painting, sculpture, drawing, engraving or photograph; or

   (b)  a reproduction of any such thing; or

   (c)  property of a description, or of a use, similar to anything covered by
        paragraph (a) or (b); 'eligible motor vehicle' means a motor vehicle
        (including a vehicle known as a four wheel drive vehicle) that is:

   (a)  a motor car, station wagon, panel van, utility truck or similar
        vehicle; or

   (b)  a motor cycle or similar vehicle; or

   (c)  any other road vehicle designed to carry a load of less than one tonne
        or fewer than 9 passengers; 'scientific research' has the same meaning
        as in section 73A.".