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    The Path to Bifurcated Tangible Asset Depreciation Regime in Australia

    89649.pdf (189.1Kb)
    Access Status
    Open access
    Authors
    Allen, Christina
    Date
    2022
    Type
    Journal Article
    
    Metadata
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    Citation
    Allen, C. 2022. The Path to Bifurcated Tangible Asset Depreciation Regime in Australia. Australian Tax Review. 51 (4): pp.343-363.
    Source Title
    Australian Tax Review
    ISSN
    0311-094X
    Faculty
    Faculty of Business and Law
    School
    Curtin Law School
    Remarks

    Reproduced with permission from the publisher.

    This article was first published by Thomson Reuters in the Australian Tax Review and should be cited as Allen, C., The Path to a Bifurcated Tangible Asset Depreciation Regime in Australia, 2022, 51, Aust. Tax Rev., 343.

    For all subscription inquiries please phone, from Australia: 1300 304 195, from Overseas: +61 2 8587 7980 or online at legal.thomsonreuters.com.au/search

    The official PDF version of this article can also be purchased separately from Thomson Reuters at http://sites.thomsonreuters.com.au/journals/subscribe-or-purchase.

    This publication is copyright. Other than for the purposes of and subject to the conditions prescribed under the Copyright Act 1968 (Cth), no part of it may in any form or by any means (electronic, mechanical, microcopying, photocopying, recording or otherwise) be reproduced, stored in a retrieval system or transmitted without prior written permission. Enquiries should be addressed to Thomson Reuters (Professional) Australia Limited. PO Box 3502, Rozelle NSW 2039. legal.thomsonreuters.com.au

    URI
    http://hdl.handle.net/20.500.11937/89826
    Collection
    • Curtin Research Publications
    Abstract

    More than two decades after their adoption, the rationale the generous depreciation concessions for small business remains unclear. Several after-the-fact explanations have been suggested, with the most common being a form of compensation for the proportionally high tax compliance burden borne by small businesses. It is, however, difficult to see how accelerated depreciation can provide appropriate offsets for compliance costs, particularly when the benefit is limited to profitable small businesses acquiring tangible property. Moreover, the emphasis on subsidising the acquisition of tangible assets seems misdirected given the 21st century trend towards deriving value from intangible assets and human capital. The small business depreciation system ultimately remains a concession in search for a plausible tax policy basis. This article provides a brief history of the Australian depreciation system to document how the small business depreciation concessions were adopted and how they have evolved to date, beginning with the legislative amendments that consolidated fragmented depreciation rules away from industry-specific tax expenditures in the 1990s. The article explains that the policy of concessions without logical policy objectives continues with more recent ad-hoc concessions, including the temporary COVID-19 measures.

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