Depreciation is generally determined by the taxpayer and represents the write off of the asset over its estimated useful economic life. There were temporary concessions available to small businesses which allowed them to claim an immediate deduction for assets they started to use provided the cost of each depreciable asset was less than $20,000. These concessions ended on 30 June 2017.
Buildings used for income producing purposes are eligible to a 2.5% capital allowance which is deductible against rental or business income. Some intangible assets such as goodwill, patents, trademarks and copyrights may be depreciated over varying periods.
Australia provides limited allowances for investments in Research & Development, primary production, mining, films, and certain other industries.
Income Tax losses may be carried forward indefinitely to be offset against subsequent profits or capital gains. The ability of companies and trusts to utilize prior year tax losses are subject to certain conditions being met. There are no carryback provisions.
Capital losses may be carried forward indefinitely but can only be utilized to offset subsequent capital gains.