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Treasury Laws Amendment (Increasing and Extending the Instant Asset Write-Off) Bill 2019

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2016-2017-2018-2019

 

The Parliament of the

Commonwealth of Australia

 

THE SENATE

 

 

 

Treasury Laws Amendment (Increasing the Instant Asset Write-Off for Small Business Entities) Bill 2019

 

 

(1)     Clause 1, page 1 (lines 5 and 6), omit “ Increasing the Instant Asset Write-Off for Small Business Entities ”, substitute “ Increasing and Extending the Instant Asset Write-Off ”.

[accelerated depreciation for medium businesses]

(2)     Schedule  1 , heading, page 3 (line 1) , omit “ Amendments ”, substitute “ Increasing the instant asset write-off for small business entities ”.

[accelerated depreciation for medium businesses]

(3)     Schedule 1, item 1, page 3 (line 6), omit “either $20,000 or $25,000”, substitute “$20,000, $25,000 or $30,000”.

[accelerated depreciation for small businesses]

(4)     Schedule 1, item 2, page 3 (line 12), omit “either $20,000 or $25,000”, substitute “$20,000, $25,000 or $30,000”.

[accelerated depreciation for small businesses]

(5)     Schedule 1, item 3, page 3 (line 17), omit “either $20,000 or $25,000”, substitute “$20,000, $25,000 or $30,000”.

[accelerated depreciation for small businesses]

(6)     Schedule 1, item 4, page 3 (line 22), omit “either $20,000 or $25,000”, substitute “$20,000, $25,000 or $30,000”.

[accelerated depreciation for small businesses]

(7)     Schedule 1, item 5, page 3 (line 29), omit “either $20,000 or $25,000”, substitute “$20,000, $25,000 or $30,000”.

[accelerated depreciation for small businesses]

(8)     Schedule 1, item 6, page 4 (line 4), omit “either $20,000 or $25,000”, substitute “$20,000, $25,000 or $30,000”.

[accelerated depreciation for small businesses]

(9)     Schedule 1, item 7, page 4 (line 10), omit “either $20,000 or $25,000”, substitute “$20,000, $25,000 or $30,000”.

[accelerated depreciation for small businesses]

(10)   Schedule 1, item 9, page 4 (after line 18), after the definition of 2019 application time , insert:

2019 budget time means 7.30 pm, by legal time in the Australian Capital Territory, on 2 April 2019.

[accelerated depreciation for small businesses]

(11)   Schedule 1, item 11, page 5 (line 10), omit “on or before 30 June 2020”, substitute “before the 2019 budget time”.

[accelerated depreciation for small businesses]

(12)   Schedule 1, item 11, page 5 (lines 12 and 13), omit “on or before 30 June 2020”, substitute “before the 2019 budget time”.

[accelerated depreciation for small businesses]

(13)   Schedule 1, item 11, page 5 (line 13), at the end of subsection 328-180(4), add:

               ; or (c)  were a reference to $30,000, if you first acquired the asset at or after the 2015 budget time, and you:

                              (i)  first used the asset, for a taxable purpose, at or after the 2019 budget time and on or before 30 June 2020; or

                             (ii)  first installed the asset ready for use, for a taxable purpose, at or after the 2019 budget time and on or before 30 June 2020.

[accelerated depreciation for small businesses]

(14)   Schedule 1, item 11, page 5 (line 24), omit “on or before 30 June 2020”, substitute “before the 2019 budget time”.

[accelerated depreciation for small businesses]

(15)   Schedule 1, item 11, page 5 (line 24), at the end of subsection 328-180(5), add:

               ; or (c)  were a reference to $30,000, if the amount is so included at any time:

                              (i)  at or after the 2019 budget time; and

                             (ii)  on or before 30 June 2020.

[accelerated depreciation for small businesses]

(16)   Schedule 1, item 11, page 5 (line 35), omit “on or before 30 June 2020”, substitute “before the 2019 budget time”.

[accelerated depreciation for small businesses]

(17)   Schedule 1, item 11, page 5 (line 35), at the end of subsection 328-180(6), add:

               ; or (c)  were a reference to $30,000, in relation to a deduction for an income year that ends:

                              (i)  at or after the 2019 budget time; and

                             (ii)  on or before 30 June 2020.

[accelerated depreciation for small businesses]

(18)   Page 5 (after line 35), at the end of the Bill, add:

Schedule 2 Extending the instant asset write-off to medium sized businesses

   

Income Tax Assessment Act 1997

1  Subsection 40-65(1) (note 3)

Omit “section 40-80”, substitute “sections 40-80 and 40-82”.

2  After section 40-80

Insert:

40-82   Assets costing less than $30,000—medium sized businesses—income years ending between 2 April 2019 and 30 June 2020

Year in which asset first used, or installed ready for use, for a taxable purpose

             (1)  The decline in value of a * depreciating asset you * hold for the income year (the current year ) in which you start to use the asset, or have it * installed ready for use, for a * taxable purpose is the amount worked out under subsection (2) if:

                     (a)  you are an entity covered by subsection (4) (about medium sized businesses) for the current year and for the income year in which you started to hold the asset; and

                     (b)  you first acquired the asset in the period beginning at 7.30 pm, by legal time in the Australian Capital Territory, on 2 April 2019 and ending on 30 June 2020; and

                     (c)  the current year ends:

                              (i)  on or after 2 April 2019; and

                             (ii)  on or before 30 June 2020; and

                     (d)  the asset is a depreciating asset whose * cost as at the end of the current year is less than $30,000.

Note:          The amount you can deduct may be reduced by other provisions, such as subsection 40-25(2) (about taxable purpose) and section 40-215 (about double deductions).

             (2)  The amount is:

                     (a)  unless paragraph (b) applies—the asset’s * cost as at the end of the current year; or

                     (b)  if the asset’s * start time occurred in an earlier income year—the sum of the asset’s * opening adjustable value for the current year and any amount included in the second element of its cost for the current year.

Later year

             (3)  The decline in value of a * depreciating asset you * hold for an income year (the later year ) is the first amount included in the second element of the asset’s * cost for the later year if:

                     (a)  you are an entity covered by subsection (4) (about medium sized businesses) for the later year; and

                     (b)  the amount so included is less than $30,000; and

                     (c)  you worked out the decline in value of the asset for an earlier income year under subsection (1); and

                     (d)  the later year ends:

                              (i)  on or after 2 April 2019; and

                             (ii)  on or before 30 June 2020.

Note:          The amount you can deduct may be reduced by other provisions, such as subsection 40-25(2) (about taxable purpose) and section 40-215 (about double deductions).

Medium sized business

             (4)  An entity is covered by this subsection for an income year if:

                     (a)  the entity is not a * small business entity for the income year; and

                     (b)  the entity would be a small business entity for the income year if:

                              (i)  each reference in Subdivision 328-C (about what is a small business entity) to $10 million were instead a reference to $50 million; and

                             (ii)  the reference in paragraph 328-110(5)(b) to a small business entity were instead a reference to an entity covered by this subsection.

Years ending after 30 June 2020

             (5)  For an income year ending after 30 June 2020, the asset’s decline in value is worked out under the other provisions of this Division.

3  After subsection 40-425(7)

Insert:

Exception: medium sized businesses

          (7A)  You cannot allocate a * depreciating asset to a low-value pool if the decline in value of the asset for any income year is determined by section 40-82 (about assets costing less than $30,000).

[accelerated depreciation for medium businesses]