Treasury Laws Amendment (2020 Measures No. 6) Act 2020 (141 of 2020)

Schedule 1   Temporary full expensing of depreciating assets and other amendments

Part 1   Main amendments

Income Tax (Transitional Provisions) Act 1997

4   After section 40-155

Insert:

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

(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.

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

(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.

(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.