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INCOME TAX ASSESSMENT ACT 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

PART 2-5 - RULES ABOUT DEDUCTIBILITY OF PARTICULAR KINDS OF AMOUNTS  

Division 27 - Effect of input tax credits etc. on deductions    View history reference

Subdivision 27-B - Effect of input tax credits etc. on capital allowances    View history reference

SECTION 27-80  Cost or opening adjustable value of depreciating assets reduced for input tax credits  

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27-80(1)  

A * depreciating asset ' s * cost is reduced if:


(a) an entity ' s acquisition or importation of the asset constitutes a * creditable acquisition or * creditable importation; and


(b) the entity is or becomes entitled to an * input tax credit for the acquisition or importation; and


(c) the entity can deduct amounts for the asset under Division 40 or 328 .

The reduction is the amount of the input tax credit.

27-80(2)  

A * depreciating asset ' s * cost is also reduced if:


(a) the entity that * holds the asset incurs expenditure that is included in the second element of the asset ' s cost for the income year in which the asset ' s * start time occurs; and


(b) the entity is or becomes entitled to an * input tax credit for the * creditable acquisition or * creditable importation to which the expenditure relates; and


(c) the entity can deduct amounts for the asset under Division 40 or 328 .

The reduction is the amount of the input tax credit.

27-80(3)  

However, subsections (1) and (2) do not apply if the * cost of the * depreciating asset is modified under Division 40 to be its * market value.

27-80(3A)  

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A * depreciating asset ' s * opening adjustable value for an income year and its * cost is reduced if:


(a) an entity ' s acquisition or importation of the asset constitutes a * creditable acquisition or * creditable importation; and


(b) the entity is or becomes entitled to an * input tax credit in an income year (the credit year ) for the acquisition or importation and the credit year occurs after the income year in which the acquisition or importation occurred; and


(c) the income year is after the one in which the asset ' s * start time occurs; and


(d) the entity can deduct amounts for the asset under Division 40 or 328 .
 View history reference

The reduction is the amount of the input tax credit.

27-80(4)  

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A * depreciating asset ' s * opening adjustable value for an income year and its * cost is reduced if:


(a) the entity that * holds the asset incurs expenditure that is included in the second element of the asset ' s cost for that income year; and


(b) that income year is after the one in which the asset ' s * start time occurs; and


(c) the entity is or becomes entitled to an * input tax credit for the * creditable acquisition or * creditable importation to which the expenditure relates for the income year in which the expenditure was incurred; and


(d) the entity can deduct amounts for the asset under Division 40 or 328 .

The reduction is the amount of the input tax credit.

27-80(5)  

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If the reduction under subsection (2), (3A) or (4) is more than:


(a) for a subsection (2) case - the * depreciating asset ' s * cost; or


(b) for a subsection (3A) or (4) case - the depreciating asset ' s * opening adjustable value;
 View history reference

the excess is included in the entity ' s assessable income unless the entity is an * exempt entity.

Exception: pooling

27-80(6)  

This section does not apply to:


(a) a depreciating asset allocated to a low-value pool or a pool under Division 328 for or in the * current year; or


(b) * in-house software if expenditure on the software is allocated to a software development pool for the current year; or


(c) a project pool.


 



This information is provided by CCH Australia Limited. View the disclaimer and notice of copyright.
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