The Australian Taxation Office has announced a new review of assets for the supermarket and grocery store industry which will see changes made to the industry’s tax deduction determinations.
The review’s announcement was made “with a view to making new effective life determinations”, the ATO said, and is inviting participation from supermarket and grocery store owners and operators as it carries out the task.
Effective lives are used to work out how much a decline in the value of an asset is able to be used as a tax deduction by a business or organisation.
Supermarket and grocery store owners and operators will continue to be able to choose whether they wish to work out their own effective life deductibles, or use the effective life as determined by the Commissioner of Taxation, the ATO said.
The review aims to ensure the Commissioner of Taxation’s effective life determinations cover assets commonly used in the supermarket and grocery store sector and reflect supermarket practices and expectations.
The ATO has noted that their determinations, as calculated in the review process, will save supermarket and grocery store owners and operators the cost of self-assessing effective lives that won’t be challenged if a business is subject to an ATO review.
As part of the review process, the ATO is inviting supermarket and grocery store owners to volunteer information and experiences that can form the basis of recommendations for the new effective lives.
The review will identify assets used in the supermarket and grocery store industry, remove redundant items in the current effective life list, consult with representative bodies, and complete a report with recommendations for the new effective lives.
The review is expected to be finalised within 12 months, with the new effective life determinations applicable from 1 July 2020.