Product Ruling
PR 2004/28A2 - Addendum
Income tax: 2004 Tumut Softwood Project
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FOI status:
may be releasedAddendum
This Addendum amends Product Ruling PR 2004/28 to reflect changes to the simplified tax system legislation from 1 July 2005.
PR 2004/28 is amended as follows:
Omit the paragraph and substitute:
61. To be an 'STS taxpayer' a Grower must be eligible to be an 'STS taxpayer' and must have elected to be an 'STS taxpayer'. Changes to the STS rules apply from 1 July 2005. From that date, STS taxpayers may use the accruals accounting method. For a Grower participating in the Project, the recognition of income and the timing of tax deductions is different under the STS where the Grower uses the cash accounting method.
Omit the paragraph and substitute:
64. A Grower will recognise ordinary income from carrying on their business of afforestation at the time that income is derived when they are:
- •
- * not an 'STS taxpayer'; or
- •
- an 'STS taxpayer' using the accruals accounting method for the 2005-06 and later income years.
Omit the paragraph and substitute:
65. A Grower who is an 'STS taxpayer' using the cash accounting method will recognise ordinary income from carrying on their business of afforestation in the income year in which that income is received.
Omit the first sentence and substitute:
However, if for any reason, an amount shown or referred to in the Table below is not fully paid in the income year in which it is incurred by a Grower who is an 'STS taxpayer' using the cash accounting method, then the amount is only deductible to the extent to which it has been paid, or has been paid for the Grower.
Omit the table and substitute:
| Fee Type | Year ended 30 June 2004 | Year ended 30 June 2005 | Year ended 30 June 2006 |
|---|---|---|---|
| Initial Establishment Services | $10,780 See Notes (i) & (ii) | ||
| Interest | As incurred (Non-STS taxpayers) Or as paid (STS taxpayers) See Note (iii) |
As incurred (Non-STS taxpayers) Or as paid (STS taxpayers) See Note (iii) |
As incurred (Non-STS taxpayers and STS taxpayers using accruals accounting) Or as paid (STS taxpayers using cash accounting) See Note (iii) |
Omit the paragraph and substitute:
112. In the absence of any application of the prepayment provisions (see paragraphs 91 to 98), the timing of deductions for interest will depend upon whether the Grower is:
- •
- an 'STS taxpayer' using the cash accounting method;
- •
- an 'STS taxpayer' using the accruals accounting method; or
- •
- not an 'STS taxpayer'.
Omit the paragraph and substitute:
113. Interest is deductible in the income year in which it is incurred if:
- •
- the Grower is not an 'STS taxpayer'; or
- •
- the Grower is an 'STS taxpayer' using the accruals accounting method.
Omit the first sentence and substitute:
If the Grower is an 'STS taxpayer' using the cash accounting method, interest is not deductible until it has been both incurred and paid, or is paid for the Grower.
This Addendum applies on and from 1 July 2005.
Commissioner of Taxation
5 October 2005
References
ATO references:
NO 2003/11684