• Chapter 6: Non-STS taxpayers carrying on a business incurring deductible business expenditure

    If you are an STS taxpayer, see chapter 5.

    Summary of rules

    Attention

    Warning:

    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

    End of attention
    • If you are carrying on a business and are not an STS taxpayer, you must apportion your deduction for prepaid business expenditure over the eligible service period or 10 years, whichever is less.
    • Prepaid expenditure that is subject to the tax shelter rules is apportioned over the eligible service period or 10 years, whichever is less. For more information, see chapter 2.
    • Certain prepaid expenditure incurred under a plantation forestry managed agreement is deductible under the 12-month rule if:
      • the eligible service period for the expenditure is 12 months or less, and
      • the period ends on or before the last day of the income year following the year in which the expenditure was incurred.
       

    For more information, see chapter 3.

    • If you are not an individual or an STS taxpayer, your deduction for prepaid non-business expenditure is apportioned over the eligible service period or 10 years, whichever is less.

    For more information, see chapter 7.

    • If you are an individual, your prepaid non-business expenditure is immediately deductible under the 12-month rule if:
      • the eligible service period for the expenditure is 12 months or less, and
      • the period ends no later than the last day of the income year following the year in which the payment is made.
       

    For more information, see chapter 4.

    • If you are an individual, your deduction for prepaid non-business expenditure is apportioned over the eligible service period or 10 years, whichever is less, if the eligible service period is more than 12 months or it ends after the last day of the next income year. For more information, see chapter 4.
    Last modified: 31 Aug 2010QC 19465