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

Treasury Laws Amendment (Increasing and Extending the Instant Asset Write‑Off) Act 2019

No. 51, 2019

An Act to amend the law relating to taxation, and for related purposes

Contents

1 Short title

2 Commencement

3 Schedules

Schedule 1—Increasing the instant asset write‑off for small business entities

Income Tax Assessment Act 1997

Income Tax (Transitional Provisions) Act 1997

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

Income Tax Assessment Act 1997

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

No. 51, 2019

An Act to amend the law relating to taxation, and for related purposes

[Assented to 6 April 2019]

The Parliament of Australia enacts:

1  Short title

  This Act is the Treasury Laws Amendment (Increasing and Extending the Instant Asset Write‑Off) Act 2019.

2  Commencement

 (1) Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.

Note: This table relates only to the provisions of this Act as originally enacted. It will not be amended to deal with any later amendments of this Act.

 (2) Any information in column 3 of the table is not part of this Act. Information may be inserted in this column, or information in it may be edited, in any published version of this Act.

3  Schedules

  Legislation that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.

Schedule 1—Increasing the instant asset write‑off for small business entities

Income Tax Assessment Act 1997

1  Paragraph 328‑180(1)(b) (note)

Repeal the note, substitute:

Note: This threshold may be $20,000, $25,000 or $30,000 for assets you first acquire between 12 May 2015 and 30 June 2020: see subsection 328‑180(4) of the Income Tax (Transitional Provisions) Act 1997.

2  Paragraph 328‑180(2)(a) (note)

Repeal the note, substitute:

Note: This threshold is $20,000, $25,000 or $30,000 for costs included between 12 May 2015 and 30 June 2020: see subsection 328‑180(5) of the Income Tax (Transitional Provisions) Act 1997.

3  Paragraph 328‑180(3)(a) (note)

Repeal the note, substitute:

Note: This threshold is $20,000, $25,000 or $30,000 for costs included between 12 May 2015 and 30 June 2020: see subsection 328‑180(5) of the Income Tax (Transitional Provisions) Act 1997.

4  Subsection 328‑210(1) (note 2)

Repeal the note, substitute:

Note 2: This threshold is $20,000, $25,000 or $30,000 for income years ending on or after 12 May 2015 and on or before 30 June 2020: see subsection 328‑180(6) of the Income Tax (Transitional Provisions) Act 1997.

5  Subsection 328‑250(1) (note)

Repeal the note, substitute:

Note: Instead of $1,000, the threshold in subsection 328‑180(1) may be $20,000, $25,000 or $30,000 for assets first acquired between 12 May 2015 and 30 June 2020: see subsection 328‑180(4) of the Income Tax (Transitional Provisions) Act 1997.

6  Subsection 328‑250(4) (note)

Repeal the note, substitute:

Note: Instead of $1,000, the threshold in subsection 328‑180(1) may be $20,000, $25,000 or $30,000 for assets first acquired between 12 May 2015 and 30 June 2020: see subsection 328‑180(4) of the Income Tax (Transitional Provisions) Act 1997.

7  Subsection 328‑253(4) (note)

Repeal the note, substitute:

Note: Instead of $1,000, the threshold in subsection 328‑180(1) may be $20,000, $25,000 or $30,000 for assets first acquired between 12 May 2015 and 30 June 2020: see subsection 328‑180(4) of the Income Tax (Transitional Provisions) Act 1997.

Income Tax (Transitional Provisions) Act 1997

8  Section 328‑180 (heading)

Omit “30 June 2019”, substitute “30 June 2020”.

9  Subsection 328‑180(1)

Insert:

2019 application time means the start of 29 January 2019.

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

10  Subsection 328‑180(1) (paragraph (b) of the definition of increased access year)

Omit “30 June 2019”, substitute “30 June 2020”.

11  Subsections 328‑180(4) to (6)

Repeal the subsections, substitute:

Assets costing less than $20,000 or $25,000

 (4) Paragraph 328‑180(1)(b) of the Income Tax Assessment Act 1997 applies to a depreciating asset as if a reference in that paragraph to $1,000:

 (a) were a reference to $20,000, 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 2015 budget time and before the 2019 application time; or

 (ii) first installed the asset ready for use, for a taxable purpose, at or after the 2015 budget time and before the 2019 application time; or

 (b) were a reference to $25,000, 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 application time and before the 2019 budget time; or

 (ii) first installed the asset ready for use, for a taxable purpose, at or after the 2019 application time and before the 2019 budget time; 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.

 (5) Paragraph 328‑180(2)(a) or (3)(a) of the Income Tax Assessment Act 1997 applies to an amount included in the second element of the cost of an asset as if a reference in that paragraph to $1,000:

 (a) were a reference to $20,000, if the amount is so included at any time:

 (i) at or after the 2015 budget time; and

 (ii) before the 2019 application time; or

 (b) were a reference to $25,000, if the amount is so included at any time:

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

 (ii) before the 2019 budget time; 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.

Low value pool

 (6) Section 328‑210 of the Income Tax Assessment Act 1997 applies as if a reference in that section to $1,000:

 (a) were a reference to $20,000, in relation to a deduction for an income year that ends:

 (i) on or after 12 May 2015; and

 (ii) before the 2019 application time; or

 (b) were a reference to $25,000, in relation to a deduction for an income year that ends:

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

 (ii) before the 2019 budget time; 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.

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).

[Minister’s second reading speech made in—

House of Representatives on 13 February 2019

Senate on 3 April 2019]