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Australia Improves Taxation Of Boating Activities

by Mary Swire, Tax-News.com, Hong Kong

13 April 2007


As part of its ongoing efforts to improve the tax system, the Australian government has introduced a bill that will improve the taxation of boating activities in the country's waters.

The Bill will allow deductions to taxpayers who hold or use a boat for non-business income producing purposes (such as leasing out one’s private vessel to a charter operator), in circumstances where the holding or use of the boat is not part of a specified type of boating business (such as a ferry service).

The measure will allow taxpayers to:

  • Deduct expenditure relating to their boating activity up to the level of income generated from their boating activity; and
  • Carry forward any excess deductions to be deducted against income from that boating activity in future years.

According to the government, the measure will ensure that where taxpayers generate an income stream from their boat, they are not unfairly taxed, while ensuring that the tax system does not subsidise the private use of boats.

The measures were introduced last month by the Minister for Revenue and Assistant Treasurer, Peter Dutton as part of the Tax Laws Amendment (2007 Measures No. 2) Bill 2007. This bill seeks to reduce compliance costs, improve certainty for taxpayers, support philanthropy and ensure the integrity of the tax base.

In addition to boating activities, the bill is aimed at improving taxation in the areas of mining and prospecting rights, research and development, donations of listed shares to deductible gift recipients, contributions to fund raising events, and venture capital.


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