Loading... Please wait...


I was treated as valuated customer when I have been there for tax return. I recommend to use Tiwari Business Services for accounting needs for all. - Michal    More>>



Small business depreciation rules: draft legislation released

Posted on 10th Jan 2012 @ 2:09 AM

On 13 September 2011, the Government released for comment exposure draft legislation which proposes to make various tax law amendments concerning the small business depreciation rules. The amendments are proposed to apply to small business entities as defined in s 328-110 of the ITAA 1997 that have an aggregated turnover of less than $2m for an income year. The exposure draft legislation and associated draft explanatory memorandum are available on the Treasury website.

The amendments are proposed to have effect from the 2012-13 income year. However, it should be noted that the amendments for the instant asset write-off and the simplified depreciation pooling arrangements are subject to the enactment of the Minerals Resource Rent Tax Bills (yet to be introduced into Parliament) and s 3 of the Clean Energy Bill 2011 (introduced into the House of Reps on 13 September 2011).

A summary of the proposed amendments is below:

Instant write-off of an asset

Under the proposed amendments to the ITAA 1997, the small business instant asset write-off threshold will be increased from $1,000 to $6,500. The proposed amendments will implement one of the Government’s responses to the Henry Tax Review in May 2010. The Government had proposed an instant asset write-off threshold of $5,000. This figure was later increased to $6,500 when the Government announced its “Clean Energy Future Plan” in July 2011.

Simplified depreciation pooling arrangements

The proposed amendments will consolidate the long life small business pool and the general small business pool into a single pool to be written off at one rate. The changes will implement one of the Government’s responses to the Henry Tax Review.

Deductions for motor vehicles

The proposed amendments propose to amend the ITAA 1997 to allow small business entities to claim an accelerated initial deduction for motor vehicles acquired from the 2012-13 income year. The proposed amendments will implement the Government’s proposal announced in the 2011-12 Budget.

Entrepreneurs’ tax offset

The proposed amendments propose to abolish the entrepreneurs’ tax offset by repealing Subdiv 61-J of the ITAA 1997. This would implement the Government’s proposal announced in the 2011-12 Budget.

Comments were due to the Business Tax Division, Treasury on 28 September 2011.

 

This article appeared in Thomson Reuters Weekly Tax Bulletin (16 September 2011).  Australia’s most comprehensive and informative tax news service, it covers, in clear terms, all tax and related developments from cases, new legislation, tax rulings and major announcements to detailed practitioner articles.