Claiming business expenses: Environmental expenditure
Clarifying the meaning of "industrial waste"
The previous environmental tax rules (section DB 37 of the Income Tax Act 2004 and section DJ 10 of the Income Tax Act 1994) applied solely to dealing with "industrial" waste. There was no definition of this term which led to ongoing uncertainty as to when tax deductions were available for environmental expenditure.
The word "industrial" has been removed from sections DB 37 and DJ 10 to protect taxpayers who have taken a wide interpretation of the term "industrial waste". This clarifies that a tax deduction is available for dealing with all forms of waste.
This change to section DB 37 applies for income years (and expenditure incurred) beginning before 10 June 2005. The change to DJ 10 is retrospective (back to the 1995-96 income year) and applies where a taxpayer has filed a tax return, notice of proposed adjustment or response notice, or has requested a reassessment, before 16 November 2004, and the correctness of the tax position, notice or request depends on the interpretation of the meaning of "industrial waste".
The Income Tax Act 2004 has been updated. The corresponding provision to section DB 37 is section DB 46 of the Income Tax Act 2007.
Date published: 18 Jun 2008
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