Supplementary Explanatory Memorandum(Circulated by authority of the Treasurer, the Hon Peter Costello, MP)
Deducting prepayments: exclusion for infrastructure borrowings
Subsection 82KZME(6) in Schedule 2 to this Bill provides an exclusion from the operation of the rules for interest expenditure in respect of infrastructure borrowings which are covered by Division 16L of Part III of the Income Tax Assessment Act 1936.
The subsection is amended to exclude all expenditure in respect of these investments. The amendment will ensure a continuation of the tax treatment which applied prior to the Government's announcement of the new arrangements on 11 November 1999.