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This is a Bill, not an Act. For current law, see the Acts databases.
TAX LAWS AMENDMENT (SMALL BUSINESS AND GENERAL BUSINESS TAX BREAK) BILL 2009
2008-2009
The Parliament of the
Commonwealth of Australia
HOUSE OF REPRESENTATIVES
Presented and read a first time
Tax Laws Amendment (Small Business
and General Business Tax Break) Bill
2009
No. , 2009
(Treasury)
A Bill for an Act to amend the law relating to
taxation, and for related purposes
i Tax Laws Amendment (Small Business and General Business Tax Break) Bill 2009 No.
, 2009
Contents
1
Short title ............................................................................................ 1
2
Commencement .................................................................................. 1
3
Schedule(s) ......................................................................................... 1
Schedule 1--Additional deduction for ce rtain ne w business
investment
3
Income Tax Assessment Act 1997
3
Tax Laws Amendment (Small Business and General Business Tax Break) Bill 2009 No. ,
2009 1
A Bill for an Act to amend the law relating to
1
taxation, and for related purposes
2
The Parliament of Australia enacts:
3
1 Short title
4
This Act may be cited as the Tax Laws Amendment (Small
5
Business and General Business Tax Break) Act 2009.
6
2 Commence ment
7
This Act commences on the day on which it receives the Royal
8
Assent.
9
3 Schedule(s)
10
Each Act that is specified in a Schedule to this Act is amended or
11
repealed as set out in the applicable items in the Schedule
12
2 Tax Laws Amendment (Small Business and General Business Tax Break) Bill 2009
No. , 2009
concerned, and any other item in a Schedule to this Act has effect
1
according to its terms.
2
3
Additional deduction for certain new business investment Schedule 1
Tax Laws Amendment (Small Business and General Business Tax Break) Bill 2009 No. ,
2009 3
1
Schedule 1
--
Additional deduction for certain
2
new business investment
3
4
Income Tax Assessment Act 1997
5
1 Section 12-
5 (table item headed "capital allowances")
6
After:
7
mining and quarrying ................................................................
Subdivision 40-H
and
Subdivision 40-I
insert:
8
new business investment, additional deduction ....................
Div ision 41
2 Subsection 40-35(1)
9
After "Divisions", insert "41,".
10
3 Subsection 40-215(1)
11
After "this Division", insert ", Division 41".
12
4 After Division 40
13
Insert:
14
Division 41--Additional deduction for certain new
15
business investment
16
Guide to Division 41
17
41-1 What this Division is about
18
You may be able to deduct an amount in relation to a depreciating
19
asset for the 2008-09, 2009-10, 2010-11 or 2011-12 income year if:
20
(a) you can deduct an amount for the decline in value
21
for the asset for the relevant year under
22
Subdivision 40-B; and
23
Schedule 1 Additional deduction for certain new business investment
4 Tax Laws Amendment (Small Business and General Business Tax Break) Bill 2009
No. , 2009
(b) you make certain new investments in respect of the
1
asset in the period starting on 13 December 2008
2
and ending on 31 December 2009; and
3
(c) the total of those new investments is at least $1000
4
(for small businesses) or $10,000 (for other
5
businesses).
6
Table of sections
7
Operative provisions
8
41-5
Object of Division
9
41-10
Entitlement to deduction for investment
10
41-15
Amount of deduction
11
41-20
Recognised new investment amount
12
41-25
Investment commitment time
13
41-30
First use time
14
41-35
New investment threshold
15
Operative provisions
16
41-5 Object of Division
17
The object of this Division is to provide a temporary business tax
18
break for Australian businesses using assets in Australia, with a
19
view to encouraging business investment and economic activity.
20
41-10 Entitle ment to deduction for investment
21
(1) You can deduct an amount for an income year in relation to an
22
asset if:
23
(a) the asset is a
*
depreciating asset, other than an intangible
24
asset; and
25
(b) you can deduct an amount under section 40-25 in relation to
26
the asset for the income year; and
27
(c) the income year is the 2008-09, 2009-10, 2010-11 or 2011-12
28
income year; and
29
(d) the total of the
*
recognised new investment amounts for the
30
income year in relation to the asset equals or exceeds the
31
Additional deduction for certain new business investment Schedule 1
Tax Laws Amendment (Small Business and General Business Tax Break) Bill 2009 No. ,
2009 5
*
new investment threshold for the income year in relation to
1
the asset.
2
(2) Subsection 73BA(7) of the Income Tax Assessment Act 1936
3
(deductions regarding assets used in research and development
4
activities) does not apply to a deduction under subsection (1).
5
(3) For the purposes of paragraph (1)(b), in determining whether you
6
can deduct the amount in relation to the asset under section 40-25
7
for the income year:
8
(a) disregard section 40-55 if the asset is a
*
car for which you
9
use the "12% of original value" method for that income year;
10
and
11
(b) disregard Subdivision 328-D (capital allowances for small
12
business entities); and
13
(c) disregard subsection 73BA(7) of the Income Tax Assessment
14
Act 1936 (deductions regarding assets used in research and
15
development activities).
16
Counting additional recognised new investment amounts for the
17
purposes of meeting the threshold
18
(4) For the purposes of paragraph (1)(d), treat each of the following as
19
a
*
recognised new investment amount for the income year in
20
relation to the asset (the relevant asset):
21
(a) a recognised new investment amount for a previous income
22
year in relation to the relevant asset;
23
(b) a recognised new investment amount for the income year or a
24
previous income year in relation to another asset, if:
25
(i) the other asset is part of a set of assets including the
26
relevant asset; or
27
(ii) the other asset is identical, or substantially identical, to
28
the relevant asset;
29
(c) a recognised new investment amount for the income year or a
30
previous income year in relation to an asset
*
held by another
31
entity, if:
32
(i) subsection 40-35(1) (jointly held depreciating assets)
33
applies in relation to the relevant asset because it is your
34
interest in an asset (the underlying asset); and
35
(ii) the asset held by the other entity is the other entity's
36
interest in the underlying asset.
37
Schedule 1 Additional deduction for certain new business investment
6 Tax Laws Amendment (Small Business and General Business Tax Break) Bill 2009
No. , 2009
41-15 Amount of deduction
1
(1) The amount that you can deduct is the total of:
2
(a) 30% of the total of the
*
recognised new investment amounts
3
for the income year in relation to the asset for which:
4
(i) the
*
investment commitment time occurred before
5
1 July 2009; and
6
(ii) the
*
first use time occurred before 1 July 2010; and
7
(b) 10% of the total of the other recognised new investment
8
amounts for the income year in relation to the asset.
9
(2) Subsection (4) applies if the income year is the 2011-12 income
10
year.
11
(3) Subsection (4) also applies if:
12
(a) you can deduct the amount because of subsection 41-10(4);
13
and
14
(b) the total mentioned in paragraph (1)(a) of this section falls
15
short of the
*
new investment threshold for the income year in
16
relation to the asset.
17
(4) Despite subsection (1), the amount that you can deduct is 10% of
18
the total of the
*
recognised new investment amounts for the income
19
year in relation to the asset.
20
41-20 Recognised new investment amount
21
(1) An amount is a recognised new investment amount for the income
22
year in relation to the asset if:
23
(a) either:
24
(i) the amount is included in the first element of the asset's
25
*
cost (worked out in accordance with
26
Subdivision 40-C); or
27
(ii) the amount is included in the second element of the
28
asset's cost under paragraph 40-190(2)(a); and
29
(b) the
*
investment commitment time for the amount occurs in
30
the period:
31
(i) starting at 12.01 am, by legal time in the Australian
32
Capital Territory, on 13 December 2008; and
33
(ii) ending on 31 December 2009; and
34
(c) the
*
first use time for the amount occurs:
35
Additional deduction for certain new business investment Schedule 1
Tax Laws Amendment (Small Business and General Business Tax Break) Bill 2009 No. ,
2009 7
(i) no later than the end of the income year; and
1
(ii) no later than 31 December 2010; and
2
(d) at the first use time for the amount, it is reasonable to
3
conclude that you will use the asset principally in Australia
4
for the principal purpose of
*
carrying on a
*
business; and
5
(e) if the amount is included in the first element of the asset's
6
cost--the first use time for the amount is the first time you or
7
any other entity have used the asset, or have it installed ready
8
for use, for any purpose; and
9
(f) you have not been entitled to a deduction under this Division
10
for any previous income year in relation to the amount.
11
(2) Treat the requirements in paragraph (1)(d) as not being met if, at
12
the first use time for the amount, it is reasonable to conclude that
13
the asset will never be located in Australia.
14
(3) For the purposes of paragraph (1)(e), disregard any previous use of
15
the asset that was merely for the purposes of reasonable testing or
16
trialling.
17
(4) Treat the requirements in paragraph (1)(e) as not being met if the
18
amount becomes included in the first element of the asset's
*
cost at
19
a time because of paragraph 40-205(a) (splitting depreciating
20
assets) or 40-210(a) (merging depreciating assets).
21
(5) In determining the amount of a
*
recognised new investment
22
amount, disregard:
23
(a) subsection 40-90(2) (reduction in cost where debt is
24
forgiven); and
25
(b) paragraph 40-365(5)(a) (reduction in cost for replacement
26
asset where involuntary disposal).
27
41-25 Investment commitme nt time
28
(1) The investment commitment time for the amount is:
29
(a) if the amount is included in the first element of the asset's
30
*
cost--the time at which you:
31
(i) enter into a contract under which you
*
hold the asset at
32
that time, or will hold the asset at a later time; or
33
(ii) start to construct the asset; or
34
(iii) start to hold the asset in some other way; or
35
Schedule 1 Additional deduction for certain new business investment
8 Tax Laws Amendment (Small Business and General Business Tax Break) Bill 2009
No. , 2009
(b) if the amount is included in the second element of the asset's
1
cost--the time at which you enter into a contract, or
2
commence construction, for the economic benefit in relation
3
to which the amount becomes, or will become, included in
4
that element under paragraph 40-190(2)(a).
5
Integrity rule
6
(2) Subsection (3) applies in relation to an amount if:
7
(a) at a time, you:
8
(i) enter into a contract under which you
*
hold an asset at
9
that time, or will hold the asset at a later time; or
10
(ii) start to construct an asset; or
11
(iii) start to hold an asset in some other way; and
12
(b) at a later time, you engage in conduct that results in you:
13
(i) entering into a contract under which you hold the asset
14
mentioned in paragraph (a) (or an identical or
15
substantially similar asset) at that later time, or will hold
16
that asset (or an identical or substantially similar asset)
17
at an even later time; or
18
(ii) starting to construct an asset that is identical or
19
substantially similar to the asset mentioned in
20
paragraph (a); or
21
(iii) starting to hold the asset mentioned in paragraph (a) (or
22
an identical or substantially similar asset) in some other
23
way; and
24
(c) you engage in that conduct for the purpose, or for purposes
25
that include the purpose, of becoming entitled to a deduction
26
under this Division.
27
(3) Despite paragraph (1)(a), the investment commitment time for an
28
amount to which that paragraph would otherwise apply is the time
29
mentioned in paragraph (2)(a).
30
Options
31
(4) To avoid doubt, for the purposes of this section, you do not enter
32
into a contract under which you
*
hold an asset merely because you
33
acquire an option to enter into such a contract.
34
Additional deduction for certain new business investment Schedule 1
Tax Laws Amendment (Small Business and General Business Tax Break) Bill 2009 No. ,
2009 9
41-30 First use time
1
The first use time for the amount is:
2
(a) if the amount is included in the first element of the asset's
3
*
cost--the time at which you start to use the asset, or have it
4
*
installed ready for use; or
5
(b) if the amount is included in the second element of the asset's
6
cost--the later of:
7
(i) the time at which it becomes included in that element
8
under paragraph 40-190(2)(a); or
9
(ii) the time mentioned in paragraph (a).
10
41-35 New investment threshold
11
The new investment threshold for an income year (the relevant
12
income year) in relation to an asset means:
13
(a) $1000 if you are a
*
small business entity during any of the
14
following income years:
15
(i) the income year in which occurs the
*
investment
16
commitment time for any
*
recognised new investment
17
amount for the asset in relation to the relevant income
18
year;
19
(ii) the income year in which occurs the
*
first use time for
20
any such amount;
21
(iii) the relevant income year; or
22
(b) otherwise--$10,000.
23
5 Subsection 995-1(1)
24
Insert:
25
first use time has the meaning given by section 41-30.
26
6 Subsection 995-1(1)
27
Insert:
28
investment commitment time has the meaning given by
29
section 41-25.
30
7 Subsection 995-1(1)
31
Insert:
32
Schedule 1 Additional deduction for certain new business investment
10 Tax Laws Amendment (Small Business and General Business Tax Break) Bill 2009
No. , 2009
new investment threshold has the meaning given by section 41-35.
1
8 Subsection 995-1(1)
2
Insert:
3
recognised new investment amount has the meaning given by
4
section 41-20.
5