Treasury Laws Amendment (Accelerated Depreciation For Small Business Entities) Act 2017

Overview

The Treasury Laws Amendment (Accelerated Depreciation For Small Business Entities) Act 2017 was enacted by the Parliament of Australia to amend the law relating to taxation. The Act primarily aims to provide small business entities with accelerated depreciation benefits for depreciable assets, which is intended to support and stimulate small businesses by reducing their tax liabilities and improving cash flow. The Act received Royal Assent on 22 June 2017 and came into effect on various dates from 1 July 2017, as specified in the commencement provisions of the Act. The policy objective of this legislation is to enhance the financial position of small businesses, thereby encouraging growth and investment within this sector.

Scope and Application

The Treasury Laws Amendment (Accelerated Depreciation For Small Business Entities) Act 2017 applies to small business entities in Australia, providing tax relief through accelerated depreciation deductions. This Act amends the Income Tax Assessment Act 1997, Income Tax (Transitional Provisions) Act 1997, and Tax Laws Amendment (Small Business Measures No. 2) Act 2015 to extend the eligibility period for accelerated depreciation from 30 June 2017 to 30 June 2018. It also repeals certain items that previously limited the scope of accelerated depreciation. The amendments are effective from 1 July 2017, with certain provisions coming into effect on the day the Act received Royal Assent, 22 June 2017. This Act does not specify any exclusions or thresholds but allows for further application details to be set through subordinate instruments.

Key Provisions

The main operative sections of the Treasury Laws Amendment (Accelerated Depreciation For Small Business Entities) Act 2017, or Act, primarily concern amendments to existing tax legislation to extend the period during which small business entities can access accelerated depreciation. Sections 1 to 3 outline the commencement of the Act, with the core amendments taking effect from 1 July 2017. The Act also includes a Schedule (Schedule 1) that details specific amendments to the Income Tax Assessment Act 1997, the Income Tax (Transitional Provisions) Act 1997, and the Tax Laws Amendment (Small Business Measures No. 2) Act 2015. The amendments primarily extend the eligibility period for accelerated depreciation from 30 June 2017 to 30 June 2018 and repeal certain items in the Tax Laws Amendment (Small Business Measures No. 2) Act 2015. The Act imposes obligations on small business entities to comply with the extended provisions for accelerated depreciation as specified in the amended sections of the Income Tax Assessment Act 1997. These entities must ensure they meet the criteria and timelines set forth in the amended paragraphs and subsections to qualify for the benefits. Additionally, the Act requires entities to adhere to any transitional provisions outlined in the Income Tax (Transitional Provisions) Act 1997 to ensure a smooth transition to the new rules. In terms of offences, penalties, or consequences, the Act itself does not specify any criminal penalties for non-compliance with its provisions. However, entities that fail to comply with the accelerated depreciation rules as amended by the Act may face penalties under the existing tax laws. These penalties can include fines, interest on unpaid tax amounts, and potential legal action by the Australian Taxation Office (ATO). The severity of these penalties can vary based on the nature and extent of the non-compliance, but they are governed by the general tax legislation rather than the Act itself.