DEVELOPMENT ALLOWANCE AUTHORITY ACT 1980 (ARCHIVE)

CHAPTER 2 - DEVELOPMENT ALLOWANCE  

PART 2 - KEY CONCEPTS RELATING TO PROJECTS  

Division 8 - Prospective deduction test  

SECTION 22 (ARCHIVE)  

22   PROSPECTIVE DEDUCTION TEST  
For the purposes of the application of this Chapter to expenditure incurred, or proposed to be incurred, by an entity in carrying out a project, the expenditure passes the prospective deduction test if the DAA is satisfied that, assuming that:

(a) the entity were to incur the expenditure and complete the carrying out of the project; and

(b) the DAA were to issue a certificate in the name of the entity in relation to the expenditure; and

(c) sections 82AC and 82AD of the Income Tax Assessment Act 1936 and section 26-55 of the Income Tax Assessment Act 1997 had not been enacted;

it is reasonably arguable that:

(d) to the extent that the expenditure is incurred in respect of the acquisition or construction of a new unit of plant - a deduction will be allowable to the entity under section 82AB of the Income Tax Assessment Act 1936 in respect of the expenditure; and

(e) to the extent that the expenditure is incurred in respect of the lease of a new unit of plant under a long-term lease agreement where the lessor is a leasing company - a deduction will be allowable to the leasing company under section 82AB of the Income Tax Assessment Act 1936 in respect of the expenditure of a capital nature incurred by the leasing company in respect of the acquisition or construction by the leasing company of the unit of plant.