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Tax Laws Amendment (Small Business Measures No. 3) Bill 2015

Schedule 2 Immediate deductibility for small business start-up expenses

   

Income Tax Assessment Act 1997

1  Section 40-825

After “5 years”, insert “(or immediately in the case of some start-up expenses for small businesses)”.

2  Subsection 40-880(1)

After “5 years”, insert “, or immediately in the case of some start-up expenses for small businesses,”.

3  After subsection 40-880(2)

Insert:

          (2A)  However, you can deduct the capital expenditure in the income year in which you incur it if:

                     (a)  the expenditure is incurred in relation to a business that is proposed to be carried on; and

                     (b)  the expenditure is incurred:

                              (i)  in obtaining advice or services relating to the proposed structure, or proposed operation of the business; or

                             (ii)  in payment to an * Australian government agency of fees, taxes or charges relating to establishing the business or its operating structure; and

                     (c)  you are a * small business entity for the income year, or both of the following apply:

                              (i)  you are not carrying on a * business in the income year;

                             (ii)  you are not * connected with, or an * affiliate of, another entity that carries on a business in the income year and that is not a small business entity for the income year.

4  Subsection 328-10(1) (before table item 1)

Insert:

1A

Immediate deductibility for small business start-up expenses

Subsection 40-880(2A) of this Act

5  Application of amendments

The amendments made by this Schedule apply in relation to assessments for the 2015-16 income year and later income years.