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Taxation treatment of datacasting transmitter licences.

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Taxation Treatment of Datacasting Transmitter Licences

The Government will amend the Income Tax Assessment Act 1997 to allow the cost of datacasting transmitter licences (DTLs) to be written off over their effective lives. This is a major improvement, as currently no deductions are allowed over the life of the licence and a capital loss is available only once the licence has expired.

The amendments are being made in view of the forthcoming auction of DTLs. All successful bidders for DTLs will be able to benefit from this change to the taxation law. Legislation implementing the new arrangements will be introduced with the uniform capital allowances system, which will operate from 1 July 2001.

DTLs will be issued under the Radiocommunications Act 1992 by the Australian Communications Authority for ten years. Licensees will be able to apply, once only, for renewal of the licences for a further five years.

Under the amendments, from 1 July 2001 the holder of a DTL will be able to deduct the initial price and any incidental costs of acquiring a DTL over the 15 year period of the licence. If the licence is not renewed for the additional five years, the taxpayer will get an immediate write-off of the remaining cost at the end of the initial ten year period. Where a DTL is issued after today and is commenced to be used before 1 July 2001, the cost will be able to be written off over the remaining licence period from 1 July 2001.

CANBERRA 24 January 2001