INCOME TAX ASSESSMENT ACT 1997 (ARCHIVE)

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

PART 2-5 - RULES ABOUT DEDUCTIBILITY OF PARTICULAR KINDS OF AMOUNTS  

Division 25 - Some amounts you can deduct  

SECTION 25-80 (ARCHIVE)   Upgrading plant to meet GST obligations etc.  

25-80(1)    
You can deduct expenditure you incur in upgrading ^* plant for the income year in which you incur the expenditure or enter into a contract to carry out the upgrade if:

(a) you incur the expenditure or enter into the contract between 1 July 1999 and 30 June 2000; and

(b) you do so for the purpose of, or for purposes that include the purpose of, meeting your existing or future obligations, or exercising your existing or future rights, under the ^* GST law; and

(c) you are the owner or ^* quasi-owner of the plant when you incur the expenditure or enter into the contract; and

(d) you use the upgraded plant before 1 July 2001, or have it ^* installed ready for use before 1 July 2001; and

(e) your ^* pre-GST annual turnover for the income year in which you incur the expenditure or enter into the contract does not exceed $10,000,000; and

(f) immediately before 1 July 2000, you are registered under Part 2-5 of the ^* GST Act.

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.

Substituted accounting periods

25-80(2)    
If the income year in which you incur the expenditure or enter into the contract ends before 30 June 2000, you are taken to have complied with paragraph (1)(f) if:

(a) when you lodge your ^* income tax return for the income year, you are registered under Part 2-5 of the ^* GST Act; or

(b) before you lodge your income tax return for the income year, you applied for registration under Part 2-5 of the GST Act and, when you lodge the return, the application has not been refused.

25-80(3)    
However, if subsection (2) has applied to you but, immediately before 1 July 2000, you are not registered under Part 2-5 of the ^* GST Act, you cannot deduct the expenditure. If you have already deducted it, your assessment may be amended to disallow the deduction.

Reducing the deduction

25-80(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.

25-80(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.