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 1

2 Commencement 2

3 Schedules 2

Schedule 1—Increasing the instant asset write-off for small business entities 3

Income Tax Assessment Act 1997 3

Income Tax (Transitional Provisions) Act 1997 4

Schedule 2—Extending the instant asset write-off to medium sized businesses 7

Income Tax Assessment Act 1997 7

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.
Commencement information Commencement information Commencement information
Column 1 Column 2 Column 3
Provisions Commencement Date/Details
1. The whole of this Act The first 1 January, 1 April, 1 July or 1 October to occur after the day this Act receives the Royal Assent. 1 July 2019

Note: This table relates only to the provisions of this Act as originally enacted.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Legislation that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.
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

Low value pool

 4

(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

(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.

 6

(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.

 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

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).

Later year

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

Years ending after 30 June 2020

 1

(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.

 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.

 3

(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.

 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.

 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

[Minister’s second reading speech made in—

House of Representatives on 13 February 2019

Senate on 3 April 2019]

(20/19)

 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).