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TAX LAWS AMENDMENT (2005 MEASURES NO. 2) ACT 2005 NO. 78, 2005 - SCHEDULE 3

- Deducting expenditure on telecommunications rights Part 1—IRUs

Income Tax Assessment Act 1997

1
Subsections 40-45(3) and (4)

Repeal the subsections.

2
Subsection 40-95(9)

Omit "international telecommunications submarine", substitute "telecommunications".

3
Subsection 995-1(1) (definition of IRU )

Omit "an international telecommunications submarine", substitute "a telecommunications".

Income Tax (Transitional Provisions) Act 1997

4
After section 40-45

Insert:

40-47 IRUs
(1)
Division 40 of the new Act does not apply to an IRU to the extent to which expenditure on the IRU was incurred at or before 11.45 am, by legal time in the Australian Capital Territory, on 21 September 1999 (the IRU time ).

(2)
Division 40 of the new Act does not apply to an IRU over an international telecommunications submarine cable system if the system had been used for telecommunications purposes at or before the IRU time.

5
Application of amendments

(1) The amendments made by items 2 and 3 apply in relation to expenditure incurred on or after 12 May 2004.
(2) Those amendments do not apply to expenditure incurred by an entity to acquire an IRU if:

(a) the IRU was acquired by the entity before 12 May 2004; and
(b) the entity becomes a member of a consolidated group or MEC group on or after that day; and
(c) because of subsection 701- 55(2) of the Income Tax Assessment Act 1997 , the IRU is taken to have been acquired on or after that day.

(3) However, if:

(a) an entity incurs expenditure on or after 12 May 2004 relating to an IRU (the new right ) granted to the entity on or after that day for a cable system; and
(b) before that day, the entity had another IRU (the earlier right ) to use that cable system;

then, to the extent (if any) that the new right covers the level of capacity over that cable system that the earlier right covered, the amendments made by items 2 and 3 do not apply to so much of the expenditure as is reasonably attributable to that level of capacity.

Part 2—Rights of access to telecommunications sites

Income Tax Assessment Act 1997

6
Section 12-5 (table item headed "capital
allowances")

Before:

trading ships, special depreciation


57AM


insert:

telecommunications site access rights


Subdivision 40-B


7
Section 12-5 (after the table item headed "tax related
expenses")

Insert:

telecommunications site access rights



see capital allowances



8
At the end of subsection 40-30(2)

Add:

; (h) * telecommunications site access rights.

9
At the end of subsection 40-70(2)

Add:

; or (e) a * telecommunications site access right.

10
Subsection 40-95(7) (at the end of the table)

Add:

14


* Telecommunications site access right


The term of the right


11
Subsection 995-1(1)

Insert:

"telecommunications site access right" means a right (except an * IRU) of a carrier (as defined in the Telecommunications Act 1997 ):

(a) to share a facility (as defined in section 7 of that Act); or
(b) to install such a facility at a particular location or on a particular structure; or
(c) to enter or cross premises for the purposes of installing or maintaining such a facility that is on the premises, or is at a location, or on a structure, that is accessible by way of the premises.

12
Application of amendments

(1) The amendments made by this Part apply in relation to expenditure incurred on or after 12 May 2004.
(2) Those amendments do not apply to expenditure incurred by an entity to acquire a right if:

(a) the right was acquired by the entity before 12 May 2004; and
(b) the entity becomes a member of a consolidated group or MEC group on or after that day; and
(c) because of subsection 701- 55(2) of the Income Tax Assessment Act 1997 , the right is taken to have been acquired on or after that day.

(3) However, if:

(a) an entity incurs expenditure on or after 12 May 2004 relating to telecommunications site access rights (the new rights ) granted to the entity on or after that day in relation to a facility; and
(b) before that day, the entity had other telecommunications site access rights (the earlier rights ) of the same kind in relation to the same facility; and
(c) the earlier rights end before they would ordinarily have ended under the contract under which they were granted;

then, to the extent (if any) that the new rights provide the same ability to share the facility, install the facility or enter or cross the premises as the earlier rights, the amendments made by this Part do not apply to so much of the expenditure as is reasonably attributable to the extent of that ability.


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