Taxation Ruling

TR 2019/5A1 - Addendum

Income tax: effective life of depreciating assets (applicable from 1 July 2019)

Addendum

This Addendum is a public ruling for the purposes of the Taxation Administration Act 1953. It amends Taxation Ruling TR 2019/5 to update incorrect page numbers and to change the description of certain depreciating assets listed in the oil and gas extraction industry back to their previous determination.

TR 2019/5 is amended as follows:

1. Table of contents

Omit the table of contents; substitute:

Contents Para
LEGALLY BINDING SECTION:
Summary - what this Ruling is about 1
Previous ruling 5
Ruling 6
Date of effect 14
NOT LEGALLY BINDING SECTION:
Appendix 1: Explanation 15
Appendix 2: Detailed contents list 66
Schedule:
ANZSIC categories Page 15
Table A Page 20
Table B Page 267

2. Paragraph 66

Omit the detailed contents list; substitute:

Paragraph
Summary - what this Ruling is about 1
Previous ruling 5
Ruling 6
Effective life determination 6
Effective life applicable 8
How to use Tables A and B 10
Date of effect 14
Appendix 1 - Explanation 15
How does the Commissioner determine the effective life of a depreciating asset? 21
Physical life 24
Manufacturing specifications and engineering information 27
Use of the asset in a particular industry 28
Use of the asset in different industries 29
Industry standards 30
Repairs and maintenance 32
Retention period 34
Obsolescence 35
Scrapping or abandonment practices 41
Lease periods 43
Financial analysis 44
Market value 45
Working out your own effective life 46
Capped lives 50
Accelerated depreciation for primary producers 55
Decline in value calculation 60
New and reviewed effective lives 61
Important terms and definitions in Tables A and B 62
Appendix 2 - Detailed contents list 66
Schedule - ANZSIC categories in Table A Page 15
Schedule - Table A as at 1 July 2019 Page 20
Schedule - Table B as at 1 July 2019 Page 267

3. Schedule

Omit the table of contents for the ANZSIC categories in Table A; substitute:

Page
AGRICULTURE, FORESTRY AND FISHING (01110 to 05290) 20
Agriculture 22
Aquaculture 39
Beef cattle farming 32
Beef cattle feedlots 33
Coffee, olive and tree nut growing 30
Dairy cattle farming 34
Fishing 41
Forestry and logging 40
Fruit growing 29
Mushroom growing 27
Nursery and floriculture production 25
Other agriculture and fishing support services 41
Pig farming 38
Poultry farming for breeding, eggs and meat 36
Poultry hatcheries 37
Sheep farming 31
Vegetable growing (under cover) 27
Vegetable growing (outdoors) and sugar cane growing 28
MINING (06000 to 10900) 42
Coal mining 46
Construction material mining 53
Gold ore mining 51
Iron ore mining 50
Mineral sand mining 51
Mineral exploration services 54
Nickel ore mining 52
Oil and gas extraction 47
Other mining support services 54
Petroleum exploration services 53
MANUFACTURING (11110 to 25990) 56
Alumina production 158
Aluminium smelting 159
Bakery product manufacturing 80
Bakery product manufacturing (non-factory based) 81
Basic chemical and chemical product manufacturing 120
Beer manufacturing (except non-alcoholic beer) 100
Boiler, tank and other heavy gauge metal container manufacturing 164
Cement manufacturing 136
Ceramic product manufacturing 136
Cereal and pasta product manufacturing 78
Cleaning compound and toiletry preparation manufacturing 129
Concrete product manufacturing 141
Confectionery manufacturing 86
Cured meat and smallgoods manufacturing 63
Dairy product manufacturing 64
Fabricated metal product manufacturing 161
Fruit and vegetable processing 68
Furniture and other manufacturing 176
Glass and glass product manufacturing 133
Grain mill product manufacturing 75
Human pharmaceutical and medicinal product manufacturing 127
Industrial gas manufacturing 117
Iron smelting and steel manufacturing 145
Log sawmilling and timber dressing 107
Meat processing 56
Motor vehicle body and trailer manufacturing 172
Motor vehicle manufacturing 165
Non-ferrous metal casting 160
Non-metallic mineral product manufacturing 133
Oil and fat manufacturing 73
Other basic chemical product manufacturing 129
Other food product manufacturing n.e.c. 92
Other motor vehicle parts manufacturing 172
Other professional and scientific equipment manufacturing n.e.c. 175
Other transport equipment manufacturing n.e.c. 175
Other wood product manufacturing 108
Paint and coatings manufacturing 132
Paper stationery manufacturing 110
Petroleum refining 115
Photographic, optical and ophthalmic equipment manufacturing 175
Plaster product manufacturing 139
Plywood and veneer manufacturing 108
Polymer film and sheet packaging material manufacturing 129
Polymer product and rubber product manufacturing 132
Poultry processing 61
Prepared animal and bird feed manufacturing 87
Printing 111
Printing support services 113
Pulp, paper and converted paper product manufacturing 109
Railway rolling stock manufacturing and repair services 173
Ready-mixed concrete manufacturing 140
Reconstituted wood product manufacturing 109
Rigid and semi-rigid polymer product manufacturing 130
Sanitary paper product manufacturing 110
Soft drink, cordial and syrup manufacturing 98
Spirit manufacturing 102
Steel coil roll forming, slitting, blanking and sheet metal forming 161
Sugar manufacturing 82
Textile, leather, clothing and footwear manufacturing 105
Wine and other alcoholic beverage manufacturing 103
ELECTRICITY, GAS, WATER AND WASTE SERVICES (26110 to 29220) 176
Electricity supply 176
Gas supply 180
Sewerage and drainage services 183
Solid waste collection services 185
Waste remediation and materials recovery services 186
Waste treatment and disposal services 185
Water supply 181
CONSTRUCTION (30110 to 32990) 189
Other heavy and civil engineering construction n.e.c. 189
WHOLESALE TRADE (33110 to 38000) 189
Commission-based wholesaling 192
Petroleum product wholesaling 190
Wool wholesaling 190
RETAIL TRADE (39110 to 43209) 192
Food retailing 196
Fuel retailing 194
Motor vehicle tyre or tube retailing 193
Other store-based retailing 196
ACCOMMODATION AND FOOD SERVICES (44000 to 45302) 196
Accommodation 196
Cafes, restaurants, takeaway food services, pubs, taverns bars and clubs (hospitality) 198
TRANSPORT POSTAL AND WAREHOUSING (46100 to 53090) 199
Other air and space transport 210
Airport operations and other air transport support services 210
Courier pick-up and delivery services 209
Other transport n.e.c. 207
Other transport support services n.e.c. 211
Other warehousing and storage services 211
Pipeline transport 207
Postal services 208
Rail freight and passenger transport services 201
Road transport 200
Scenic and sightseeing transport 206
Tramway and light rail passenger transport services 200
Water transport and support services 203
INFORMATION MEDIA AND TELECOMMUNICATIONS (54110 to 60200) 212
Electronic information storage services 222
Internet publishing and broadcasting 219
Library and other information services 222
Motion picture and video activities 212
Motion picture exhibition 215
Radio broadcasting 216
Telecommunications services 219
Television broadcasting 217
FINANCIAL AND INSURANCE SERVICES (62100 to 64200) 222
Banking, building society and credit union operations 222
RENTAL, HIRING AND REAL ESTATE SERVICES (66110 to 67200) 223
Non-residential property operators 231
Rental and hiring services (except real estate) 223
Residential property operators 226
PROFESSIONAL, SCIENTIFIC AND TECHNICAL SERVICES (69100 to 70000) 232
Advertising services 237
Professional photographic services 237
Scientific research services 232
Scientific testing and analysis services 234
Surveying and mapping services 233
Veterinary services 237
ADMINISTRATIVE AND SUPPORT SERVICES (72110 to 73200) 238
Building and other industrial cleaning services 238
Gardening services 239
Packaging services 240
EDUCATION AND TRAINING (80100 to 82200) 241
HEALTH CARE AND SOCIAL ASSISTANCE (84010 to 87900) 241
Dental services 246
Hospitals 241
Retirement village and accommodation for the aged operation 249
Optometry and optical dispensing 246
Pathology and diagnostic imaging services 244
Podiatry services 248
Specialist medical services n.e.c. 243
ARTS AND RECREATION SERVICES (89100 to 92099) 251
Creative and performing arts activities 251
Gambling activities 254
Health and fitness centres and gymnasia operation 252
Heritage activities 251
Sport and recreation services 252
OTHER SERVICES (94110 to 96030) 254
Automotive body, paint and interior repair n.e.c. 257
Automotive repair and maintenance 254
Funeral, crematorium and cemetery services 263
Hairdressing and beauty services 262
Laundry and dry cleaning services 263
Other machinery and equipment repair and maintenance 259
Parking services 266
Photographic film processing 264

4. Table A - Oil and gas extraction (07000)

(a) Under subheadings 'Gas production assets' and 'Oil production assets' after:

    Electricity generation assets - see Table A Electricity supply (26110 to 26400)      

Insert:

    Floating production storage and offloading (FPSO) vessels (incorporating mooring systems) 20   *#   1 Jul 2002
    Floating storage and offloading (FSO) vessels (incorporating mooring systems) 20   *#   1 Jul 2002

(b) Under subheadings 'Gas production assets' and 'Oil production assets', omit:

    Self-propelled floating production storage and offloading (FPSO) ships (incorporating mooring systems) 20   *#   1 Jul 2002
    Self-propelled floating storage and offloading (FSO) ships (incorporating mooring systems) 20   *#   1 Jul 2002

This Addendum applies on and from 1 July 2019.

Commissioner of Taxation
22 April 2020

© AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA

You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).

References

ATO references:
NO 1-HHM96UX

ISSN: 2205-6122

Business Line:  PGI

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© Australian Taxation Office for the Commonwealth of Australia

You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).