Product Ruling
PR 2004/19A - Addendum
Income tax: Queensland Paulownia Forests Project No. 8
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FOI status:
may be releasedAddendum
This Addendum amends Product Ruling PR 2004/19 to reflect changes to simplified tax system legislation from 1 July 2005.
PR 2004/19 is amended as follows:
Omit the paragraph and substitute:
- 38. To be an 'STS taxpayer' a Grower must be eligible to be an 'STS taxpayer' and must have elected to be an 'STS taxpayer'. Changes to the STS rules apply from 1 July 2005. From that date, STS taxpayers may use the accruals accounting method. For a Grower participating in the Project, the recognition of income and the timing of tax deductions is different under the STS where the Grower uses the cash accounting method.
Omit the paragraph and substitute:
- 43. A Grower will recognise ordinary income from carrying on the business of afforestation at the time that income is derived when they are:
- •
- not an 'STS taxpayer'; or
- •
- an 'STS taxpayer' using the accruals accounting method for the 2005-06 and later income years.
Omit the paragraph and substitute:
- 44. A Grower who is an 'STS taxpayer' using the cash accounting method will be assessable on ordinary income from carrying on their business of afforestation in the income year in which that income is received.
(a) Omit the table and substitute:
| Fee Type | Year ended 30 June 2004 | Year ended 30 June 2005 | Year ended 30 June 2006 |
|---|---|---|---|
| Establishment services fee | $5390.00 See Notes (i) & (ii) |
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| Licence fee | See Notes (i) & (iii) |
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| Interest incurred or paid to UPF | As incurred (Non-STS taxpayers) Or as paid (STS taxpayers) See Note (iv) |
As incurred (Non-STS taxpayers) Or as paid (STS taxpayers) See Note (iv) |
As incurred (Non-STS taxpayers and STS taxpayers using accruals accounting) Or as paid (STS taxpayers) See Note (iv) |
(b) Omit Note (ii) and substitute:
- (ii)
- The Establishment service fee is expenditure for 'seasonally dependent agronomic activities' (see paragraphs 79 to 83) and is deductible in the income year in which it is incurred (where the Grower is not an 'STS taxpayer' using the cash accounting method) or the year in which it is paid (where the Grower is an 'STS taxpayer' using the cash accounting method).
(c) Omit the third sentence in Note (iii) and substitute:
- 'Excluded expenditure' is an 'exception' to the prepayment rules and is deductible in full in the year in which it is incurred (where the Grower is not an 'STS taxpayer' using the cash accounting method) or the year in which it is paid (where the Grower is an 'STS taxpayer' using the cash accounting method).
This Addendum applies on and from 1 July 2005.
Commissioner of Taxation
25 January 2006
References
ATO references:
NO 2005/18404
ISSN: 1441-1172