• Division 10B

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

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    Division 10B is available to both residents and non-residents and has potentially broader application than Division 10BA. Division 10B applies in relation to a film certified in writing by the Minister for the Environment, Heritage and the Arts as an 'Australian film' being one that:

    a

    has been, or is to be, made wholly or substantially in Australia or an external territory, and which will have a significant Australian content, or

    b

    has been, or is to be, made under an agreement or arrangement entered into between the Australian Government and the government of another country.

    Under Division 10B you may be entitled to a deduction for the capital cost of producing an 'Australian film' or the capital cost of acquiring the copyright in an 'Australian film'. If you invest in a 'qualifying Australian film' under Division 10BA you may make an election that Division 10B apply to you rather than Division 10BA.

    You have two methods of claiming a deduction in relation to a film certified as an 'Australian film' for the purposes of Division 10B:

    • you can deduct the costs incurred over two years under Division 10B, or
    • you can elect that Division 10B does not apply to you and deduct the costs of the unit over the effective life of the copyright in accordance with Division 40 of the ITAA 1997.

    If Division 10B applies and you deduct the costs over two years, half the cost of acquiring the interest in the copyright is deductible in the year of income during which the film was first used to produce assessable income. The other half is deductible in the following year.

    If you elect that Division 10B does not apply to you and you acquire the copyright for a specified period, you can claim deductions over the shorter of that specified period or the period ending when the effective life of the copyright ends.

    Last modified: 07 Aug 2009QC 21782