Income Tax Assessment Act 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

PART 2-5 - RULES ABOUT DEDUCTIBILITY OF PARTICULAR KINDS OF AMOUNTS  

Division 25 - Some amounts you can deduct  

Operative provisions  

SECTION 25-95   Deduction for work in progress amounts  

25-95(1)  
You can deduct a * work in progress amount that you pay for the income year in which you pay it to the extent that, as at the end of that income year:


(a) a recoverable debt has arisen in respect of the completion or partial completion of the work to which the amount related; or


(b) you reasonably expect a recoverable debt to arise in respect of the completion or partial completion of that work within the period of 12 months after the amount was paid.

25-95(2)  
You can deduct the remainder (if any) of the * work in progress amount for the following income year.

25-95(3)  
An amount is a work in progress amount to the extent that:


(a) an entity agrees to pay the amount to another entity (the recipient ); and


(b) the amount can be identified as being in respect of work (but not goods) that has been partially performed by the recipient for a third entity but not yet completed to the stage where a recoverable debt has arisen in respect of the completion or partial completion of the work.

25-95(4)  
An amount does not stop being a work in progress amount merely because it is paid after a recoverable debt has arisen in respect of the completion or partial completion of the work to which the amount related.


 

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