Income Tax (Transitional Provisions) Act 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

PART 2-10 - CAPITAL ALLOWANCES: RULES ABOUT DEDUCTIBILITY OF CAPITAL EXPENDITURE  

Division 40 - Capital allowances  

Subdivision 40-BB - Temporary full expensing of depreciating assets  

SECTION 40-157   Corporate tax entities with income under $5 billion  

40-157(1)    
This section covers you for an income year if:

(a)    you are a corporate tax entity at any time in the income year; and

(b)    any of the following amounts is less than $5 billion:

(i) the sum of your ordinary income (if any) and statutory income (if any) for the 2018-19 income year;

(ii) if the 2019-20 income year ends on or before 6 October 2020 - the sum of your ordinary income (if any) and statutory income (if any) for the 2019-20 income year; and

(c)    the sum of the amounts worked out under subsection (3) for the 2016-17, 2017-18 and 2018-19 income years exceeds $100 million.

40-157(2)    
For the purposes of paragraph (1)(b) , disregard non-assessable non-exempt income.

40-157(3)    
The amount under this subsection for an income year is worked out as follows:

(a)    firstly, identify each depreciating asset (other than an intangible asset) that:

(i) you hold at any time in the income year; and

(ii) you started to use, or have installed ready for use, for a taxable purpose in the income year;

(b)    next, work out the cost of each of those assets (including any amounts included in the second element of the asset ' s cost at a time that is in the income year);

(c)    finally, work out the total of those costs.

40-157(4)    
For the purposes of subsection (3) , disregard an asset if, at the time you first used the asset, or had it installed ready for use, for a taxable purpose:

(a)    it was not reasonable to conclude that you would use the asset principally in Australia for the principal purpose of carrying on a business; or

(b)    it was reasonable to conclude that the asset would never be located in Australia.

40-157(5)    

For the purposes of paragraph (3)(b) , to work out the cost of a depreciating asset that is capital works (see section 43-20 of the Income Tax Assessment Act 1997 ):

(a)    disregard section 40-45 of that Act and work out the cost of the capital works using Subdivision 40-C of that Act; and

(b)    disregard section 40-215 of that Act.