Calculating business profits and business losses

(1)

For the purposes of this section, business profits derived, and business losses incurred, in the following periods are to be calculated separately:

(a) the period (the first period ):
(i) starting at the beginning of the 2001-2002 year of income; and
(ii) ending on 19 May 2002; and
(b) the period (the second period ):
(i) starting on 20 May 2002; and
(ii) ending at the end of the 2001-2002 year of income.

Continued application of old taxation code

(2)

Despite the repeal of the Petroleum (Timor Gap Zone of Cooperation) Act 1990 , the old taxation code continues to apply in relation to business profits derived, and business losses incurred, in the first period.

Application of new taxation code

(3)

Subject to section 19, the new taxation code applies in relation to business profits derived, and business losses incurred:

(a) in the second period; and
(b) in all years of income that begin after the 2001-2002 year of income ends.

Note: Section 19 deals with the application of the new taxation code in relation to individual residents of East Timor.