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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.
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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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