Commonwealth Numbered Acts

A NEW TAX SYSTEM (INDIRECT TAX AND CONSEQUENTIAL AMENDMENTS) ACT (NO. 2) 1999 NO. 177, 1999 - SCHEDULE 5

Income Tax Assessment Act 1997

1 Section 12-5 (after table item headed "grape vines")

GST—acquiring or upgrading plant to meet GST obligations etc.

depreciation for cost of plant 42-168

software 42-168, 46-25

upgrading plant 25-80

2 Section 12-5 (table item headed "software")

abandoned software 46-70

GST—acquiring or upgrading plant to meet GST obligations etc. 42-168, 46-25

3 Section 20-30 (after table item 1.7)

1.7AA

25-80

upgrading plant to meet GST obligations etc.

4 After section 25-75

25-80 Upgrading plant to meet GST obligations etc.

(1)

You can deduct expenditure you incur in upgrading ^* plant if:

(a)

you incur the expenditure between 1 July 1999 and 30 June 2000; and

(b)

you do so for the purpose of, or for purposes that include the purpose of, meeting your existing or future obligations, or exercising your existing or future rights, under the ^* GST law; and

(c)

you are the owner or ^* quasi-owner of the plant when you incur the expenditure; and

(d)

you use the upgraded plant before 1 July 2000, or have it ^* installed ready for use immediately before 1 July 2000; and

(e)

your ^* pre-GST annual turnover for the income year in which you incur the expenditure does not exceed $10,000,000; and

(f)

immediately before 1 July 2000, you are registered under Part 2-5 of the ^* GST Act.

Substituted accounting periods

(2)

If the income year in which you incur the expenditure ends before 30 June 2000, you are taken to have complied with paragraph (1)(f) if:

(a)

when you lodge your ^* income tax return for the income year, you are registered under Part 2-5 of the ^* GST Act; or

(b)

before you lodge your income tax return for the income year, you applied for registration under Part 2-5 of the GST Act and, when you lodge the return, the application has not been refused.

(3)

However, if subsection (2) has applied to you but, immediately before 1 July 2000, you are not registered under Part 2-5 of the ^* GST Act, you cannot deduct the expenditure. If you have already deducted it, your assessment may be amended to disallow the deduction.

5 Before section 42-170

42-168 Acquiring plant to meet GST obligations etc.

(1)

Despite sections 42-160 and 42-165, your deduction is the ^* plant's ^* cost for the income year in which you become its owner or ^* quasi-owner if:

(a)

you become the owner or quasi-owner of the plant between 1 July 1999 and 30 June 2000; and

(b)

you do so for the purpose of, or for purposes that include the purpose of, meeting your existing or future obligations, or exercising your existing or future rights, under the ^* GST law; and

(c)

your ^* pre-GST annual turnover for the income year does not exceed $10,000,000; and

(d)

immediately before 1 July 2000, you are registered under Part 2-5 of the ^* GST Act.

Substituted accounting periods

(2)

If the income year in which you become the owner or ^* quasi-owner of the ^* plant ends before 30 June 2000, you are taken to have complied with paragraph (1)(d) if:

(a)

when you lodge your ^* income tax return for the income year, you are registered under Part 2-5 of the ^* GST Act; or

(b)

before you lodge your income tax return for the income year, you applied for registration under Part 2-5 of the GST Act and, when you lodge the return, the application has not been refused.

(3)

However, if subsection (2) has applied to you but, immediately before 1 July 2000, you are not registered under Part 2-5 of the ^* GST Act, you cannot deduct the ^* plant's ^* cost. If you have already deducted it, your assessment may be amended to disallow the deduction.

6 At the end of Subdivision 46-B

46-62 Software expenditure to meet GST obligations etc.

The modifications set out in sections 46-35, 46-40, 46-45 and 46-50 are to be disregarded in the application of section 42-168 (meeting GST obligations etc.) to units of ^* software.

7 At the end of paragraph 46-85(d)

8 At the end of Division 960

Subdivision 960-R—Pre-GST annual turnover

General rule

(1)

Your pre-GST annual turnover for an income year is your ^* group turnover for the income year.

Note: Your pre-GST annual turnover will not be relevant to an income year starting after 30 June 2000, because it is only relevant to deductions for costs related to preparing for the GST (see sections 25-80, 42-168 and 46-62).

New businesses

(2)

However, if you, or one or more of the entities ^* connected with you, did not start to carry on ^* business until after the start of the income year:

(a)

you must make a reasonable estimate of the amount that would have been your ^* group turnover for the income year if you, and all of the entities connected with you, had carried on business throughout the income year; and

(b)

that estimate is your pre-GST annual turnover for the income year.

9 Subsection 995- 1(1)

group turnover : the group turnover of an entity (the primary entity ) for an income year is the sum of:

(a)

the ^* value of the business supplies the primary entity made in the income year; and

(b)

the value of the business supplies entities ^* connected with the primary entity made in the income year;