HUNDREDS OF DEDUCTIONS AND DEPRECIATION RATES TO REDUCE YOUR TAXABLE INCOME & BOOST YOUR TAX EFFECTIVENESS

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1 TAXATION TAX IQ 2009 TAX RETURNS SPECIAL I SPECIAL BONUS SPECIAL TWO: SEVENTH EDITION THIS MIGHT BE THE MOST TAX EFFECTIVE INVESTMENT YOU MAKE THIS YEAR! ALLOWABLE DEDUCTIONS SELF EDUCATION LEGAL EXPENSES ADVISORY FEES EMPLOYEE BONUSES NEGATIVE GEARING EARLY INTEREST CLAIMS AND HUNDREDS MORE HUNDREDS OF DEDUCTIONS AND DEPRECIATION RATES TO REDUCE YOUR TAXABLE INCOME & BOOST YOUR TAX EFFECTIVENESS INDUSTRY & ASSET CLASS DEPRECIATION TABLES MANUFACTURING MEDICAL RETAIL PERSONAL SERVICES RENTAL DEPRECIATION MAXIMUM TAX BENEFITS ON YOUR PROPERTY INVESTMENTS THIS IS A EASY TO USE TOOL THAT EVERY BUSINESS TAXPAYER & PROFESSIONAL SHOULD HAVE IN THEIR RESOURCE STATION

2 TAX IQ 2009 TAX RETURNS SPECIAL I 2 CONTENTS SECTION ONE: YOUR TAX RETURN AND TAXES 3 Lodging Tax Returns 3 Auditing and Amending Tax Returns 3 Who Must Lodge? 3 When Must You Lodge? 4 How Much Tax? 4 Medicare Levy 4 Medicare Levy Surcharge 4 Health Insurance Tax Offset 4 Baby Bonus 4 Child Care Benefits 4 Low Income Tax Offset 5 Education Tax Offset 5 First Home Saver Accounts 5 Mature Age Worker Tax Offset 5 Entrepreneur s Tax Offset 5 Dependent Offsets 5 Senior Australians Tax Offset (SATO) 5 Pensioner Tax Offset 5 Employment Termination Payments 6 Accrued Leave 6 Higher Education Loan Programme (HELP) 6 Film Production Incentives 6 SECTION TWO: TAX DEDUCTIONS FOR BUSINESS 6 A listing with explanations of numerous items which you can utilise to reduce your tax. Accountant s Fees 6 Accrued Leave 6 Advertising and Sponsorship 7 Bad Debts 7 Balancing Charges 7 Bank Charges 7 Bill Discounts 7 Black Hole Expenses 7 Boats 7 Body Corporate Fees 7 Bona Fide Redundancy Payments 7 Books 7 Borrowing Expenses 7 Bribes 7 Building Leases 7 Business Capital Costs 7 Car Expenses 7 Childcare 7 Cleaning 7 Clothing 7 Commission 7 Computer Expenses 7 Computer Operating Costs 7 Conferences and Seminars 7 Consumable Stores 8 Copyright and Patents 8 Credit Card Charges 8 Death and Disability Benefits 8 Debt/Equity Swaps 8 Defalcations 8 Director s Fees 8 Education 8 Electricity 8 Electricity Connection Costs 8 Employee Benefits 8 Employment Agreements 8 Entertainment Expenses 8 Environmental Impact Studies 8 Environmental Protection Expenses 8 Exchange Gain and Losses 8 Farm Management Deposits 8 Freight and Courier Expenses 8 Fringe Benefits 8 General Interest Charge 8 Gifts 8 Home Office Expenses 9 Insurance 9 Interest 9 Lease Instalments 9 Legal Expenses 9 Licences 9 Losses From Prior Years 9 Misappropriation 9 Motor Vehicle Expenses 9 Newspapers and Magazines 9 Parking Fees and Tolls 9 Primary Production Expenses 9 Rates and Land Tax 9 Relocation Expenses (Staff) 9 Relocation Expenses (Business) 9 Rent 9 Repairs 9 Replacements 9 Research and Development 9 Retiring Allowances 9 Salaries and Wages 9 Seminars and Conventions 10 Shortfall Interest Charge 10 Sickness and Accident Insurance 10 Stationary 10 Subscriptions 10 Superannuation 10 Superannuation Guarantee 10 Tax Audits and Appeals 10 Tax Shelters 10 Tax Related Expenses 10 Telephones 10 Tender Costs 10 Trading Stock 10 Transport 10 Travelling Expenses 10 Website Operating Costs 10 Working Lunches 10 SECTION THREE: CHECK LIST FOR PRIMARY PRODUCTION BUSINESSES 10 A check list of expenses which can be claimed by farmers. SECTION FOUR: CHECK LIST FOR EMPLOYEE DEDUCTIONS 11 A check list of expense items which may be claimed by wage and salary earners. SECTION FIVE: SMALL BUSINESS CONCESSIONS 13 Advantages Disadvantages SECTION SIX: DEPRECIATION AND EFFECTIVE LIVES 13 An explanation of depreciation and detailed lists of effective lives as determined by the Tax Office so you can calculate depreciation rates on plant and equipment. SECTION SEVEN: EFFECTIVE LIFE TABLES - TABLE A (INDUSTRY CATEGORIES) 15 SECTION EIGHT: EFFECTIVE LIFE TABLES - TABLE B (ASSET CATEGORIES) 31 SECTION NINE: DEPRECIATION - RENTAL PROPERTY 35 Tax IQ 2009 Tax Returns Special published by Media IQ Pty Ltd PO Box 9007 GCMC QLD info@miq.com.au Web:

3 TAX IQ 2009 TAX RETURNS SPECIAL I 3 1 YOUR TAX RETURNS AND TAXES LODGING TAX RETURNS More than 11.5 million Australian residents lodge personal income tax returns each year. Business entities are also required to lodge returns. For 2005/06 these included: 728,196 companies 415,279 partnerships 569,593 trusts 285,784 superannuation funds During 2006/07 the Government collected $135 billion from individuals and paid out $17 billion in tax refunds. Other taxes collected included: Companies $58 billion Superannuation funds $ 7 billion Fringe benefits tax $ 4 billion Excise and customs duty $28 billion In addition, the Taxation Office collects goods and services tax and remits this to the States. During 2006/07 a total of $40 billion was collected. This is a lot of money and it is only natural that a great deal of importance is placed by the Government and the Tax Office on the need to ensure accuracy in completion of income tax returns and assessment of taxes payable. Taxpayers also want to ensure that taxes payable are not overstated, that all legitimate tax deductions are claimed and amounts are only included as taxable income where this is required by law. Hence, the purpose of this Special Bonus Issue. It is designed to help you master the complexity of completing your personal income tax return or to assist you to provide all necessary information to your accountant. Australia operates under a system of self-assessment. This means that it is your responsibility to lodge a tax return which is complete and correct. The Tax Office does not verify your tax return, but simply issues an assessment based on figures which you have given them. AUDITING AND AMENDING TAX RETURNS At a later date, the Tax Office may have another look at your return perhaps some of its computer driven data matching or verification systems have highlighted something out of the ordinary. It may look at some specific information in your return and make an enquiry or decide to conduct a full scale audit. The Tax Office has only a limited time in which to review your return and make any amendments. If you are an individual without complex tax affairs or are operating an eligible small business the normal amendment period of four years is reduced to two. You will not be eligible for the shorter period of review if you: Are a trustee of a trust; Are a beneficiary of a Trust not eligible for the small business concessions; Carry on or are a partner of a business not eligible for the small business concessions; Entered into or carried out a scheme for the sole or dominant purpose of obtaining a tax benefit; Are involved in a non arm's length tax related transaction with a related entity which does not enjoy the shorter period of review; Are involved in transactions to which Division 7A of the 1936 Tax Act applies; Are an employee shareholder of a company affected by the anti avoidance provisions relating to employee share schemes; Have omitted income from foreign transactions; Have become involved in offshore transactions involving deemed transfers of property or services or tainted services income; Have been involved in transactions which are caught by specific anti avoidance provisions. The 6 year period of review for Part IVA cases has also been reduced to four years. Because there are limitations on the period during which the Tax Office may amend an assessment, the actual date of the original assessment is very important. For companies and superannuation funds the Tax Office does not issue a formal notice of assessment. Hence, the tax return itself is deemed to be a notice of assessment issued on the day the return is lodged. Individual taxpayers who have not received a notice of assessment within 12 months of lodging a return may request in writing that the Tax Office issues an assessment. If the assessment is not received within 3 months of receipt of such a notice, the Tax Office is deemed to have issued an assessment. Hence, any assessment issued thereafter will be deemed to be an amended assessment. Transitional rules apply in respect of returns relating to years prior to 2004/05. The Tax Office will have 6 years from date of lodgement for returns with carry forward losses and 4 years for non taxable returns without losses (or until 31 October 2008, whichever is the later). Limited periods of review do not apply where there has been fraud or evasion. In such cases, the Tax Office can issue amended assessments at any time. WHO MUST LODGE? There are a number of circumstances which could require you to lodge income tax returns. The requirements are published in the Register of Legislative Instruments as TPAL 2008/1. In simple terms, the Commissioner of Taxation requires that you must lodge an income tax return for 2007/08 if: You had PAYG withholding amounts deducted; You incurred a loss or net capital loss or are entitled to a deduction for a prior year loss; If a company or trust, you had unapplied tax losses or capital losses exceeding $1,000; You carried on a business; You are a beneficiary of a primary production business trust; You were a partner of a primary production business partnership; You were under 18 and had non personal exertion income of more than $1,666 or had income from dividends and trust distributions plus imputation credits of more than $416; You received overseas income under Sections 23AF or 23AG together with other income; You paid a PAYG Instalment amount; You are an author, inventor, performing artist, production associate or sportsperson under Division 405 of the 1997 Tax Act You are eligible to claim a private health insurance tax offset; You had a reportable fringe benefit amount shown on your PAYG payment summary; You received assessable income from dividends or distributions and franking credits that exceeded $6,000; Made a personal superannuation contribution and are eligible for super co contribution; Received a lump sum super payout while aged under 60; You received a notification from the Tax Office high wealth individuals task force that you are required to lodge a detailed form of return; You were a resident of Australia for the whole of the year and your taxable income exceeds $6,000; You were a non resident but derived income (including capital gains) subject to Australian tax other than income subject to withholding payments; You were an Australian resident for part of the income year and your taxable income exceeds $500 multiplied by the number of full or part months that you were a resident; You are a company which derived income taxable in Australia other than income subject to withholding payments; You are a super fund which derived income taxable in Australia other than income subject to withholding payments; You are a head company of a consolidated group; You are an agent for non resident insurers, ship masters, owners or charterers or in control of a non resident's money; You are a trust or partnership which derived income (including capital gains) during 2006/07.

4 TAX IQ 2009 TAX RETURNS SPECIAL I 4 You are not required to lodge if: You received social security benefits and had no other assessable income or your taxable income was less than or equal to $11,000; You qualified for Senior Australian's Tax Offset (SATO) and your income was below SATO thresholds; You are a pensioner who did not qualify for the SATO but your taxable income was below pensioner offset thresholds; You are a resident, non profit company whose taxable income in Australia does not exceed $416; You are a non profit association, organisation, institution, society or club whose income is exempt from tax; You are a subsidiary of a consolidated group. WHEN MUST YOU LODGE? The tax year runs from 1 July to 30 June and you have until 31 October to lodge your tax return unless it is prepared by a registered tax agent. Normally, your income tax will be payable 21 days after 31 October, however longer time will be allowed if you lodge through a registered tax agent. The Tax Office has power to apply a failure to lodge on time penalty if your return is incomplete or lodged late. The penalty is $110 for every 28 days (or part thereof) your return is overdue up to a maximum of $550. The Tax Office can apply this penalty even when there is no tax payable, however, it would normally not apply the penalty where the tax return: is lodged voluntarily; and does not result in any tax payable. The penalty is in addition to any interest charges that may apply for late payment of tax. HOW MUCH TAX? Resident Individuals (2007/08 Year) Taxable Income $0-$6,000 Nil MEDICARE LEVY Tax Payable $6,001-$30,000 Nil + 15% of excess over $6,000 $30,001-$75,000 $3, % of excess over $30,000 $75,001-$150,000 $17, % of excess over $75,000 $150,001 + $47, % of excess over $150,000 Resident Individuals (2008/09 Year) Taxable Income $0-$6,000 Nil Tax Payable $6,001-$34,000 Nil + 15% of excess over $6,000 $34,001-$80,000 $4, % of excess over $34,000 $80,001-$180,000 $18, % of excess over $80,000 $180,001 + $58, % of excess over $180,000 The general rate of the Medicare levy is 1.5% of your taxable income. If your taxable income is below the threshold you will be exempt from the levy. There is also a phasing in range and higher exemptions for taxpayers with children. The higher family thresholds relate to family income. Where the threshold is exceeded, Medicare levy is charged at the rate of 10% on the excess above the threshold until the amount reaches the normal levy of 1.5% on taxable income. The thresholds for 2007/08 are: Taxpayer MEDICARE LEVY SURCHARGE If not covered by private patient hospital insurance, a surcharge of 1% is payable by individuals with a taxable income over $50,000 (couples and families $100,000). The $100,000 threshold for families is increased by $1,500 for each dependant child after the first. The Government has announced that the threshold levels will be increased to $100,000 for singles and $150,000 for couples and families for the 2008/09 year. HEALTH INSURANCE TAX OFFSET You can claim this either as a direct reduction of your health insurance premium or as a tax rebate. The rebate is normally 30% of the premium. If you were eligible before 1 January 1999, it would be the greater of 30% of the premium or the incentive amount in the following table: The health insurance tax offset increases to 35% where one person covered under the policy is aged 65 but under 70 and to 40% where at least one person covered under the policy is aged 70 or more. BABY BONUS Threshold (No Levy) You are entitled to a Maternity Payment of $5,000 for each newborn child. This payment increased from $4,000 for children born from 1 July This payment will be indexed on 1 July in each year. From 1 January 2009 the payment will be made in fortnightly instalments over a six month period. There will also be an income test available only where family income is not greater than $150,000. (Assessed as not more than $75,000 in the six months after the birth of the child.) CHILD CARE BENEFITS Phasing In Range $ $ $ Full Levy Individual 17,309 17,310-20,363 20,364 Individual with Spouse and no dependants 29,207 29,208-34,361 34,362 One dependant 31,889 31,890-37,516 37,517 Two dependants 34,571 34,572-40,671 40,672 Three dependants 37,253 37,254-43,827 43,828 Four dependants 39,935 39,936-46,982 46,983 Five dependants 42,617 42,618-50,137 50,138 Six dependants 45,299 45,300-53,292 53,293 Additional child +2,682 +3,155 Eligible for Pensioner Offset 22,922 22,923-26,967 26,968 Eligible for SATO 25,867 25,868-30,431 30,432 Person Covered Ancillary Cover Hospital Cover Individual $25 $100 $125 Couple $50 $200 $250 Family (with children) $100 $350 $450 Hosp./Anc. Combined There are a number of benefits available for parents, most of which are administered by Centrelink. Firstly, there is a parenting payment available if you have at least one child aged under six (if partnered) or eight (if single) wholly or substantially in your care.

5 TAX IQ 2009 TAX RETURNS SPECIAL I 5 This benefit, which is subject to an income and assets means test, can be a maximum of $ per fortnight if partnered and $ if single. Child care benefits are available for working parents who have a child attending child care to assist in meeting child care fees. Maximum payable for a non-school aged child is $ per week for approved care or $29.05 per week for registered care. This benefit is subject to an income test. The child care tax rebate for 2008/09 will be 50% of child care fees (after deducting the child care benefit). This rebate is to be paid quarterly up to a maximum of $7,500. LOW INCOME TAX OFFSET Low income earners can claim a rebate up to a maximum of $700 (2007/08) or $1,200 (2008/09). This is available if your taxable income does not exceed $30,000. The rebate is reduced by 4 cents for every dollar by which your taxable income exceeds $30,000. Minors can claim this offset and therefore the $416 tax free threshold for unearned income is effectively increased to $1,555 (if no other income) for 2007/08 and $2,666 for 2008/09. EDUCATION TAX OFFSET From 1 July 2008 you can claim an education tax offset if you have children attending primary or secondary school and are receiving Family Tax Benefit Part A. The claim will be for up to 50% of the cost of education expenses including laptops, education software, school text books and stationery. Maximum claims will be $375 per child per year for primary school children and $750 per child per year for secondary school children. FIRST HOME SAVER ACCOUNTS First Home Saver Accounts can be opened with banks, building societies, credit unions, life insurance companies, friendly societies and public offer superannuation funds. These are special purpose accounts similar to term deposits. When you buy or build your first home you must withdraw all the money from this account and close it. The funds can be used to pay: a deposit on purchase of an existing home; a deposit or instalments for a house and land package; for the purchase of vacant land on which your home will be built; a deposit or instalments on the construction of a home on land you own; incidental costs incurred in buying or building the home such as legal expenses, Council fees and stamp duty. To open a First Home Saver Account you must: be over 18 and under 65 years old; have a tax file number which is quoted in your application; have not previously owned a home in Australia or Norfolk Island that has been your main residence; and have not previously opened a First Home Saver Account unless: you are transferring all the funds from one First Home Saver Account to another; or you have closed a First Home Saver Account but the purchase or construction of your home did not eventuate and you are opening another First Home Saver Account within six months; or you have closed a First Home Saver Account within the 14 day cooling off period. The Government will make a co contribution equal to 17% of contributions made in each year up to a maximum of $850 (indexed after 2008/09). Interest earnings will be taxed at 15% which will be payable by the financial institution and which will not have to be reported in your tax return. The accounts will have a cap of $75,000 (indexed after 2008/09). MATURE AGE WORKER TAX OFFSET If you are aged 55 or over at the end of the financial year and your income is less than $63,000 you can claim a tax offset (maximum $500) or 5% of the following types of earnings: personal services income; income from a business carried on personally or in partnership; income from a company or trust that is personal services income attributed to you; farm management withdrawals; reportable fringe benefits less related tax deductible expenses The offset begins to phase out when your earnings reach $53,000. ENTREPRENEUR'S TAX OFFSET There is an offset for people operating small businesses where turnover is not more than $75,000. From 1 July 2008 eligibility will be subject to an income test annual adjusted taxable income not more than $75,000 (or $120,000 for families). When turnover is $50,000 or less the offset amounts to 25% of tax payable. It phases out progressively when turnover is between $50,000 and $75,000. DEPENDANT TAX OFFSETS You can claim rebates for dependants if they have low separate net incomes (SNI). The rebate is reduced by $1 for every $4 by which the SNI of the dependant exceeds $282. The rebates for 2007/08 and 2008/09 are: Category Maximum Rebate $ Maximum Rebate $ Dependant spouse and housekeeper rebates are not available for any part of the year during which there is eligibility for Family Tax Benefit Part B. From 1 July 2008 these rebates will be subject to an income means test. SENIOR AUSTRALIANS TAX OFFSET (SATO) If you are of age pension age (even if not receiving a pension) you can claim SATO. This effectively allows a single person to have income up to $25,867 without paying tax whilst couples can earn up to a total of $43,360 combined without paying tax. The thresholds for 2007/08 are: PENSIONER TAX OFFSET 2007/ /09 Spouse or de facto 2,100 2,159 Child housekeeper 1,711 1,759 Invalid relative Parent of taxpayer or spouse 1,540 1,583 Housekeeper with dependant child 2,051 2,108 Housekeeper 1,711 1,759 Status Maximum Rebate $ Shading Out Income $ Single person 2,230 25,867-43,707 Couple (each) 1,602 21,680-34,496 Couple separated because of illness (each) 2,040 24,600-40,920 If you are a pensioner below age pension age and therefore not entitled to SATO, you can claim a Pensioner Tax Offset.

6 TAX IQ 2009 TAX RETURNS SPECIAL I 6 The rates for 2007/08 are: Status Maximum Rebate $ Shading Out Income $ Single person 2,129 20,194-37,226 Couple (each) 1,610 16,734-29,614 Couple separated because of illness (each) 1,982 19,214-35,070 The tax offset is reduced by 12.5 cents for each dollar of income in excess of the lower threshold. EMPLOYMENT TERMINATION PAYMENTS Special tax rates apply to Employment Termination Payments (ETPs) in respect of amounts accrued after June 1983 (referred to as "post June 1983 components"). The rate also depends on whether the ETP arises from a taxed element (eg a superannuation benefit which has borne superannuation contributions tax and superannuation income tax) or an untaxed element (eg a "golden handshake" paid direct by the employer, which has not previously been subject to tax). Taxpayer's Age when ETP Paid Under 55 Up to $145,000 Over $145, years Up to $145,000 Over $145, years and over Up to $145,000 Over $145,000 Medicare levy is charged in addition. ACCRUED LEAVE Taxed Element (Max Tax Rate) Nil 20% Nil 15% Nil Nil Untaxed Element (Max Tax Rate) 30% Marginal Rate 15% Marginal Rate 15% Marginal Rate Special rates of tax apply to accrued leave payments on resignation, redundancy or retirement. The rates payable depend on the type of payments made and when they were paid. They also depend on whether termination was due to resignation or retirement or whether it was due to redundancy, invalidity or an early retirement scheme. Rates of tax payable are shown in the table below: Payment Type Long service leave: Maximum Tax Rate Resignation/ Retirement Payments Redundancy/Invalidity/ Early Retirement Scheme Pre 16/08/78 5% at marginal rate 5% at marginal rate 16/08/78-17/08/93 30% 30% Post 17/08/93 Marginal rate 30% Annual Leave: Pre 18/08/93 30% 30% Post 17/08/93 Marginal rate 30% These rates only apply to payments on termination. Medicare levy is charged in addition. Whilst paid on termination, accrued leave payments are not Employment Termination Payments (ETPs). HIGHER EDUCATION LOAN PROGRAMME (HELP) Previously known as HECS, this programme requires past university students to repay part of their higher education costs through the tax system. Payments are based on a percentage of annual income up to a maximum of 8%. Repayment Income Below $39,825 Repayment Rate Nil $39,825-$44,360 4% $44,361-$48, % $48,897-$51,466 5% $51,467-$55, % $55,323-$59,915 6% $59,916-$63, % $63,069-$69,405 7% $69,406-$73, % $73,960 and above 8% Repayment income is calculated by adding the following items together: Taxable income; Net rental loss claimed in the tax return; Total reportable fringe benefits shown on PAYG Payment Summary; Any exempt foreign employment income. FILM PRODUCTION INCENTIVES Commencing from 2007/08 a 40% refundable tax rebate is available for eligible domestic feature films and a 20% refundable tax rebate for other eligible domestic media productions including TV series and documentaries. Eligible international films will receive an improved location rebate of 15% on qualifying expenditure. Qualifying expenditure over $5 million on post production and visual effects will also be eligible for the international tax rebate. TAX DEDUCTIONS FOR BUSINESS Under Section 8-1 of ITAA 1997 you can claim a deduction for an expense to the extent that: it is incurred in gaining or producing your assessable income; or it is necessarily incurred in carrying on a business for the purpose of gaining or producing an assessable income. However, the expense cannot be deducted if: it is capital or of a capital nature; or it is of a private or domestic nature; or it relates to the gaining or producing of exempt income; or another provision of the Act prevents it from being deductible. If the payment has been made for a dual purpose partly private and partly business, the expense can be apportioned. There are a number of other specific provisions in the Act which expand or limit deductions which can be claimed. If you are operating a business as a sole trader or partnership, you must substantiate your car expenses and travel expenses. If you are operating a business you can claim a deduction for expenses incurred in running the business. Here we list numerous types of business expenses which are deductible if incurred in the relevant tax year. ACCOUNTANT'S FEES: If related to your business. Expenses related to management of your income tax affairs are also deductible under Section ACCRUED LEAVE: Only deductible when actually paid to the employee or to a business purchaser. 2

7 TAX IQ 2009 TAX RETURNS SPECIAL I 7 ADVERTISING AND SPONSORSHIP: Advertising costs to promote your business, goods and services. Also advertising for staff and for entertainment for promotional or advertising purposes, provided the entertainment is available to the public. Sponsorship expenses promoting your business are also deductible. BAD DEBTS: If there is no likelihood of recovery, you can claim a deduction if the debt was previously included as taxable income and is written off in the year in which it is claimed. BALANCING CHARGES: If you sell a depreciating asset for less than its written down value, you can claim a deduction for the difference which is called a "balancing charge". If sold for more than written down value, the difference is assessable income. BANK CHARGES: Taxes and charges debited on your business bank statements. BILL DISCOUNTS: When you obtain finance through commercial bills, the discount is the "interest" or the price you pay for the finance. If the proceeds are used for working capital, claim the amount over the life of the bill. If the proceeds are used to discharge existing liabilities, claim the discount in full. Do not use bill finance to acquire capital assets, as there is a risk that the discount will be treated as part of the capital cost of acquiring the asset. BLACK HOLE EXPENSES: See Business Capital Costs. BOATS: Boat operating expenses, depreciation, interest or leasing charges if the boat is used in a business transporting goods or passengers, fishing, chartering, etc. Owners of boats which are not used in a business but are hired or leased out can only claim expenses up to the amount of income generated. Excess deductions are quarantined and can be claimed against income from the boating activity in future years. BODY CORPORATE FEES: If the property is used for business purposes or to produce assessable income. BONA FIDE REDUNDANCY PAYMENTS: Bona fide redundancy payments to retrenched employees. Employees can receive these amounts on a tax-free basis up to a maximum of $7,020 plus $3,511 for each completed year of service. BOOKS: Trade books, textbooks and professional books can be depreciated. Eligible small business taxpayers may claim the cost of individual books in full provided they, or the set to which they belong, cost less than $1,000. Non business taxpayers (employees) may claim in full if cost is $300 or less. BORROWING EXPENSES: These include legal expenses, stamp duty, valuation and survey fees, etc. and are deductible if the funds are used for income producing purposes. The deduction is spread equally over the term of the loan up to a maximum of five years. When the loan is repaid you can claim a deduction for expenses of discharging the mortgage. BRIBES: You cannot claim a deduction for a bribe, but you can claim payments to foreign public officials if:- the payment is not against the law of the foreign country; or the amount is paid to expedite or secure performance of a routine Government action of a minor nature. BUILDING LEASES: Expenses of repairing, registering or stamping of a lease agreement or its assignment or surrender can be claimed. BUSINESS CAPITAL COSTS: Capital expenditure incurred in relation to a past, present or prospective business being, or to be, carried on for a taxable purpose can be deducted over 5 years if it is not otherwise deductible or included in the cost base of an asset for CGT purposes. The claim is made in equal instalments over 5 years and includes: Business capital expenditure incurred in relation to an existing business Expenditure incurred in relation to a past or prospective business; Expenditure incurred in terminating a lease or licence if the expense is incurred in the course of carrying on or in ceasing a business. Expenditure deductible under this heading will include costs of establishing a business structure, converting it, raising equity, defending it against a takeover, liquidating the business and other costs incurred in ceasing to carry on business. CAR EXPENSES: All car expenses incurred in operating your business. These include interest and leasing charges, petrol, oil, repairs, registration, insurance, motorist's association fees, tolls and parking (but not when the car is used to commute from home to work and parked at or near the workplace). If you are operating as a sole trader or partnership, you must substantiate all car expenses. If the car is garaged at an employee's home, you must maintain fringe benefits tax records required to ascertain whether FBT is payable. CHILDCARE: All expenses incurred in providing recreation or childcare facilities for employees on your business premises. These are exempt from FBT. CLEANING: Cleaning costs of business premises or of business plant or machinery and vehicles. CLOTHING: Cost of buying, renting, replacing and maintaining clothing, uniforms and footwear if it is:- protective in nature; occupation specific and not conventional in nature; a compulsory uniform; or a non-compulsory uniform or wardrobe that has been entered on the Register of Approved Occupational Clothing. COMMISSION: Commission paid in the normal course of operating your business such as commission payments to sales people. Commission payments on sale of capital assets form part of the cost base of the asset. COMPUTER EXPENSES: Costs of maintaining computers, testing and minor alterations and modifications including remedying of defects. Website maintenance, content updating, web hosting and service provider's fees, annual domain name registration costs are also fully deductible. If your website is updated with new content or design changes involving "new functionality" the cost will be treated as software and can be depreciated over 2.5 years. The cost of computer hardware can be depreciated over the effective life. COMPUTER OPERATING COSTS: Costs of maintaining your computer systems and software, internet and access, are deductible if business related. CONFERENCES AND SEMINARS: The cost of holding a seminar (or conference, lecture, meeting or training session) can be claimed if the function is held for business purposes. Food and non-alcoholic drinks provided are deductible and exempt from FBT provided the function lasts at least four hours.

8 TAX IQ 2009 TAX RETURNS SPECIAL I 8 If you hold a public fee paying function, you are conducting the function as a business. This means that the subject of the function need not relate to a particular business. CONSUMABLE STORES: These include such items as stationery, computer discs, oils and greases. Farmers need to acquire fertiliser, fuel, fencing materials, etc. Expenses that are incurred in acquiring consumable stores are fully deductible and you do not have to account for any unused items at the end of a financial year. COPYRIGHTS AND PATENTS: These costs are treated as capital costs to be amortised over the effective life of the property. The effective lives of different types of intellectual property are:- standard patent - 20 years innovation patent - 8 years petty patent - 6 years registered design - 15 years Copyright - the shorter of 25 years or time to expiry date licence (excluding copyright) - years to expiry copyright licence - the shorter of 25 years or time to expiry date CREDIT CARD CHARGES: Merchant fees paid for provision of credit card or EFTPOS facilities to customers. Credit card charges relating to the use of credit cards for business purposes. DEATH AND DISABILITY BENEFITS: Premiums paid for death and disability benefits for members are deductible to complying superannuation funds. DEBT/EQUITY SWAPS: If you have a substantial debt owed to you by a company and swap that debt for shares in the company, you can claim a loss if you later dispose of those shares at a loss. DEFALCATION: Losses arising from the theft, embezzlement or defalcation of money by an employee or agent if the money has previously been included in your taxable income. Deductions for stock losses are automatically generated when you next undertake a physical inventory. DIRECTOR'S FEES: Fees paid to directors for their services. You should deduct PAYG withholding amounts before payment. If the fees are authorised by a shareholder's resolution, you may claim the amount accrued even if unpaid at year end. EDUCATION: Costs of providing work related training or skills to employees including costs of obtaining technical or professional qualification. ELECTRICITY: Light, power and heating costs for business or office premises. ELECTRICITY CONNECTION COSTS: Costs incurred in connecting mains electricity or in upgrading an existing connection to business premises can be claimed over 10 years. The amount is claimed in 10 equal instalments. EMPLOYEE BENEFITS: Benefits provided to employees, but be aware that most of these will be subject to fringe benefits tax. Benefits exempted from FBT are contributions to complying superannuation funds and employee share schemes. Laptop computers, mobile phones, electronic organisers and briefcases are also exempt. If you provide shares to employees under Division 13A and the shares are qualifying shares, you can claim a deduction for the market value of the shares (less any amount received) up to a maximum of $1,000 for each employee. The deduction can be claimed when the share or right is actually acquired by the employee. EMPLOYMENT AGREEMENTS: Expenses incurred in negotiating and/or preparing employment agreements. ENTERTAINMENT EXPENSES: These are not deductible unless you are in the business of providing entertainment to fee paying customers. You can also claim entertaining expenses incurred to promote or advertise your business or its goods and services to the public generally. If entertainment is provided to employees, the cost will be deductible, but FBT will be payable. ENVIRONMENTAL IMPACT STUDIES: You can claim such expenditure over the lesser of 10 years or the life of the income-producing project to which it relates. If your project ends or is abandoned, the remaining amount of the undeducted expenditure can be claimed in that year. ENVIRONMENTAL PROTECTION EXPENSES: Costs of combating or rectifying pollution or waste arising from an income-producing activity is generally fully deductible. EXCHANGE GAINS AND LOSSES If you are involved in international transactions, perhaps through the importing or exporting of goods, you may incur losses or achieve gains arising from foreign currency fluctuations. Any losses are deductible whilst gains are assessable. FARM MANAGEMENT DEPOSITS: If you are a farmer with not more than $65,000 in non-primary production income, you can make an investment in a farm management deposit with an approved financial institution. The deposit will be tax deductible, whilst withdrawals are subject to tax. FREIGHT AND COURIER EXPENSES: If incurred in the normal course of running your business. FRINGE BENEFITS: Benefits provided to employees (see Employee Benefits). FRINGE BENEFITS TAX: The amount of fringe benefits is grossed up, then taxed at 46.5%. (This is to make the FBT equal to the tax, at maximum rates, that would be payable on increased wages paid to enable the employee to acquire the benefit from after tax wages). FBT payments are fully deductible on an accruals basis. You can claim the actual FBT liability for the FBT year ending on 31 March plus the June instalment, but you must deduct the instalment you paid in the previous June. GENERAL INTEREST CHARGE: If you are late paying your income tax or PAYG, there is a general interest charge (GIC). This charge is tax deductible. Interest on borrowings to pay personal income tax are not deductible, however if a business overdraft facility is used to pay the tax, the ATO accepts that the borrowings are connected with the carrying on of business and therefore tax deductible. GIFTS: If you are operating a business and pay subscriptions or make donations purely for business purposes and as a form of advertising, you may claim these in full. Gifts of $2 or more to charitable organisations registered as Deductible Gift Recipients are deductible. Gifts of works of art can be deductible under the Cultural Gifts Program and may be spread over five years if required. Gifts of heritage properties made to the National Trust also qualify for deductions and may be spread over five years. Such gifts need to be valued. The valuation fee is deductible. Such gifts can also be made by will and a deduction will be allowed in the year the taxpayer dies. Gifts to employees are deductible. If for less than $300 and made only on an irregular and infrequent basis, they will be also be exempt from FBT. Deductibility for contributions to a registered political party was abolished from 1 July 2008.

9 TAX IQ 2009 TAX RETURNS SPECIAL I 9 HOME OFFICE EXPENSES: Expenses incurred in operating an office from home. Power, lighting, etc will need to be apportioned on the basis of actual expenses incurred or can be claimed at the rate of 26 cents per hour. If a particular part of your home is set aside for business purposes you can claim occupancy expenses but that will affect your main residence exemption for CGT purposes. INSURANCE: Premiums paid for all types of business insurance including fire, burglary, public liability, motor vehicle, professional indemnity, loss of profits, workers' compensation. Keep in mind the need to apportion premiums paid in advance if you are not an eligible small business taxpayer and the pre-payment exceeds $1,000. INTEREST: Interest on moneys borrowed for the purpose of gaining or producing assessable income or carrying on a business is deductible. It is the purpose for which the borrowings are used that matters, not the security provided. Interest incurred before or after the business commences or ceases may still be fully deductible. LEASE INSTALMENTS: Where you acquire vehicles or equipment for business use by lease, the lease payments are fully deductible. Your final residual payment will normally be treated as the purchase cost of the asset. You can then claim depreciation on that amount over the remaining effective life. Lease payments on luxury motor vehicles (costing $57,123 or more) are deemed to be hire purchase agreements for tax purposes. Instead of claiming the lease instalment you can claim imputed depreciation (up to the depreciation cost limit) and interest. LEGAL EXPENSES: If incurred in relation to business operations. Debt collection expenses, preparing or reviewing contracts, preparing leases, mortgage documents are business operating expenses. If in relation to the purchase or sale of capital assets, legal costs are not deductible and should be included in the cost base of those assets. LICENCES: If you have to take out an initial licence when you start the business, you cannot claim a deduction for that unless it is in the nature of an annual licence fee. Renewals of licences can be claimed in full. LOSSES PRIOR YEARS: Tax losses incurred in prior years, not yet recouped, can be carried forward and deducted from income in the current year. MISAPPROPRIATIONS: Losses arising from the theft, embezzlement or misappropriation of money by an employee or agent if the money has previously been included in your taxable income. The relevant section has been extended to allow deductions for misappropriations arising from the disposal of a depreciating asset or a CGT asset. MOTOR VEHICLE EXPENSES: All expenses incurred in respect of vehicles required to operate your business whether cars, trucks, buses, motor cycles, etc. These include interest and leasing charges, petrol, oil, repairs, registration, insurance, etc. NEWSPAPERS AND MAGAZINES: Newspapers and magazines purchased for business use perhaps to have available at reception or needed to check contracts and tenders. PARKING FEES AND TOLLS: Parking fees and tolls paid for the operation of worker vehicles. PRIMARY PRODUCTION EXPENSES: Expenses such as agistment fees, service fees, droving, fertiliser, fodder, insecticides, weed killers, vehicle costs, mustering, shearing, power, fuel, stationery, rates, farm rents, repairs, wages, telephone, vet expenses, water rates and charges, insurances and worker's compensation. (See later for checklist) RATES AND LAND TAX: Rates and land tax charges on land and buildings used to produce income. Where premises are partly used for business purposes, the deduction must be apportioned. If you have a room in your dwelling used only for business purposes, you may claim a deduction for rates and other expenses by apportioning the total cost on a floor area basis. RELOCATION EXPENSES (STAFF): If paid by the employer. These are not subject to fringe benefits tax. However, if associated with employment agreements, a fringe benefit may arise where the employer pays or reimburses an employee's costs. RELOCATION EXPENSES (BUSINESS): Costs of relocating a business including costs in moving stock and plant. Purchase costs of new fitouts and premises are capital. Depreciation and capital works allowances can be claimed. RENT: Rent incurred for use of business premises or other assets. Also lease outgoings such as rates, maintenance, insurance, etc. You can also claim rent applicable to that portion of your rented home which is used as a home office, provided the area is set apart for business use. REPAIRS: Repairs to business vehicles, plant and machinery, premises and improvements. Sometimes it is difficult to determine whether the work done is a repair (deductible) or an improvement (non-deductible capital cost). If the item is substantially improved, added to, altered or modernised, it will be treated as an improvement. If the work is simply bringing the asset back into its original condition, it will be a repair. (But you cannot claim for repairing a run-down property that you purchased cheaply.) REPLACEMENTS: Costs for replacing small items, tools, etc if under $100, can be claimed in full. Items costing between $100 and $1,000 must be treated as plant and applied to the low cost pool. Items costing more than $1,000 must be individually depreciated. If you are an eligible small business taxpayer you can fully claim all such items costing less than $1,000. If you are a non-business individual taxpayer you can fully claim such items costing less than $300. RESEARCH AND DEVELOPMENT: Companies can claim expenses incurred in R&D at the accelerated rate of 125%. Where companies increase their level of R&D expense, the rate is increased to 175% for the additional expenditure. These claims are subject to a $20,000 threshold and must meet strict criteria and be subject to approval by the Industry Research and Development Board. RETIRING ALLOWANCES: Retiring allowances paid to retiring employees, directors or to their spouses, widows or widowers are generally deductible under Section if paid in relation to past services. SALARIES AND WAGES: Salaries and wages paid to employees are deductible when these are incurred. You can therefore accrue any wages (including bonuses) accrued but unpaid at the end of the financial year. Annual leave, sick leave and long service leave can be deducted when actually paid.

10 TAX IQ 2009 TAX RETURNS SPECIAL I 10 SEMINARS AND CONVENTIONS: Registration fees and travel expenses incurred in attending seminars and conventions which relate to your business. You may have to apportion the expenses if you undertake a sight seeing trip as well. SHORTFALL INTEREST CHARGE: This is the interest rate charged by the Tax Office where returns have been amended producing tax shortfalls relating to income tax assessments for 2004/05 and later years. The shortfall interest charge (SIC) is tax deductible. SICKNESS AND ACCIDENT INSURANCE: If the policy provides income benefits during a period of disablement, the premium is deductible. Premiums for policies providing nontaxable lump sum benefits are not deductible. STATIONERY: Printing stationery office supplies used for business and promotional purposes. SUBSCRIPTIONS: Subscriptions paid to trade, business or professional associations directly related to the business. Also subscriptions to technical or trade journals and other similar publications which, in appropriate cases, may include newspapers, internet use and even pay TV. SUPERANNUATION: Superannuation contributions made on behalf of employees to complying superannuation funds. Contribution limits are $50,000 (if under 50) or $100,000 (if 50 or over). Super funds are not permitted to accept contributions in respect of employees aged 75 or over unless they are mandated. Employers can claim full deductibility for all contributions irrespective of the amount. However, the super fund will be taxed at 15% up to the above limits and 45% on any contributions in excess of those limits. If your employment income is less than 10% of your total income, you can claim a deduction for a personal superannuation contribution made on a similar basis to the above. SUPERANNUATION GUARANTEE: Superannuation guarantee support amounting to 9% of ordinary time earnings provided it is paid within the time allowed. All contributions in respect of each quarter must be paid to the relevant superannuation funds by the 28th day of the following month. Claims can only be made in the year that the payments are actually made. TAX AUDITS AND APPEALS: Professional costs incurred in assisting in a tax audit or in objecting or appealing against a tax assessment. TAX SHELTERS: Primary production, forestry, films and research and development projects become available each year as tax advantaged investments. If contemplating investment, make sure that the project has been approved and a valid product ruling has been issued by the Tax Office. Check with your accountant or investment advisor before proceeding. TAX-RELATED EXPENSES: All costs incurred in managing your tax affairs are deductible under Section This includes costs of preparing your income tax returns (whether business or personal), taxation audits, appeals and objections, tax consulting. Deductible expenses include your subscription to Tax IQ, travelling costs and accommodation if needed to see your tax consultant. TELEPHONES: Telephone expenses relating to business operations. If working from home, you need to apportion costs between business and private use, preferably by dissecting your telephone account or keeping a four week diary. TENDER COSTS: All tender costs (whether or not the tenders were successful) if related to your business operations. TRADING STOCK: Section 8-1 enables you to claim a deduction for the cost of acquiring trading stock provided the items have either been sold in the year of purchase or have been included as trading stock on hand at the end of the year. Costs of moving trading stock from one location to another are also deductible. TRANSPORT: Costs of moving and transporting staff between business premises or work sites. Costs of transporting materials, trading stock and equipment. TRAVELLING EXPENSES: Travelling expenses directly related to your business. If you undertake a trip, partly for business purposes and partly for private purposes, you must apportion the expenses. You must keep receipts for all expenses, which include meals and accommodation, incidentals, airline tickets, motor vehicle costs, taxis, etc. If the trip lasts more than five nights, you must maintain a travel diary, which must include the time, place and nature of each business activity and the duration of that activity. WEBSITE OPERATING COSTS Costs of website maintenance, content updating, web hosting and service providers' fees, annual domain name registration costs. If your website is updated with new content or design changes involving "new functionality" the cost will be treated as software and can be depreciated over 4 years. WORKING LUNCHES: The provision of tea and coffee and meals on work premises during a working day to employees. These are also exempt from FBT. CHECKLIST FOR PRIMARY PRODUCTION BUSINESSES Accounting Fees Agistment charges Animal husbandry costs Bookkeeping costs Broker's charges Commissions (on sale of livestock and farm produce) Computer operating expense Depreciation Dips, drenches, etc. Droving Electricity Employee keep (food) Farm management deposits Fencing repairs Fertiliser Fodder Freight and cartage Fuel Fumigants Grapevines established pre 1/10/04 (4 year write off) Grapevines established from 1/10/04 (effective life write off) Horticulture establishment (effective life write off) Insecticides Insurance premiums (farm risks) Interest (farm borrowings and hire purchase) Landcare expenditure Lease payments (farm equipment and vehicles) Livestock (but must include value as income at end of year) Mains electricity connection Motor vehicle expenses Mustering Printing and stationery Protective clothing Rates and land taxes Rent (employee accommodation) Rent (farm property) Repairs and maintenance Rural newspapers and journals Seeds 3

11 TAX IQ 2009 TAX RETURNS SPECIAL I 11 4 Service fees (animal breeding) Shearing expenses Software (2.5 year write off or 30% if small business) Soil conservation Subscriptions (farm organisations) Telephone Telephone lines (10 year write off) Timber depletion Trading stock (but must include value as income at end of year) Veterinary fees Wages and salaries Water charges and levies Water facility expenditure (three year write off) Weed killers Wool tax Worker's Compensation Working dogs Working up (land preparation for crops) CHECKLIST FOR EMPLOYEE DEDUCTIONS TAX OFFICE COMPLIANCE FOCUS: Again this year the Tax Office will focus on deductions for work related expenses, rental property expenses and capital gains from sale of property and other assets. Work related expenses claimed employees in the following occupations will receive special attention: Tourism, travel consultants and tour guides Fitness and sporting industry employees Construction trades people employees Guards and security employees, Mining site employees; Nurses, medical practitioners; Chefs; Those occupations with a pattern of large and/or rising claims The Tax Office has also embarked on a project focusing on the compliance behaviour of high income earning executives and directors. The Tax Office has announced that it has cross-checked tax returns against a range of data including financial institutions, State and Territory revenue and property sales information and Australian Stock Exchange data. In particular it will be looking for capital gains from assets sold to contribute to superannuation and at assets transferred into super funds. The Tax Office will also pay particular attention to correct disclosure by investors relating to: income and expenditure of rental properties; dividends and interest; sale of investments; avoiding dodgy tax schemes; superannuation contributions. CHECKLIST: Here is a checklist of work related expenses which may be claimed by employees if incurred. Bank charges (if account used for earning interest or receiving salaries) Briefcases (used for work, fully deductible if cost less than $300) Calculators and electronic organisers Car expenses (must be fully substantiated) Clothing must be: protective; occupational specific; a compulsory uniform; or a non-compulsory uniform registered with the Registry of Occupational Clothing. Computers and software (depreciable if used for work purposes may need to apportion between business and private) Credit card charges if card used for work-related purposes Driver's licence (extra cost relating to special endorsements) Drycleaning (if clothing is deductible) Election expenses (local Government or parliamentary members) Employment agreement expenses (but not for a new employer) First Aid courses (if relating to work) Fitness expenses (if high degree of physical fitness required, eg physical training instructor but not physical education teacher) Gaming licence (if needed for work) Glasses (of a protective nature only) Home office expenses Internet and data access (if work-related or related to share investing) Laundry and clothing maintenance (if cost of clothing is deductible) Overtime meal expenses (if an award allowance is received) Parking fees and tolls Practicing certificates (for professionals) Professional books (claim in full if under $300 otherwise depreciable) Self-education expenses (subject to criteria) Sickness and accident insurance (if proceeds are of an income nature) Stationery (required for work purposes, eg time planners, log books, etc.) Subscriptions to professional or business associations Sunscreen, sunglasses and hats (outdoor workers) Tax agent fees (including travel and accommodation and related tax return costs) Technical and trade journals Telephone expenses (if work-related) Tools of trade (fully deductible if under $300, otherwise depreciable) Travel expenses and meals (must be work-related and substantiated, not to and from work) Union fees Claims for work-related expenses, car expenses and travelling expenses, must be substantiated and you need to be able to show that the expense was incurred in earning your income and that it is not of a private or capital nature. Keep in mind that you can only claim deductions if the cost comes out of your own pocket. If reimbursed by your employer, he claims the deduction not you. If work-related expenses exceed $300 the expenses must be substantiated. SPECIFIED OCCUPATIONS: Here are some special deductions for employees of specified occupations. JOURNALISTS AND RADIO/TV PRESENTERS: Costs of accessing internet and pay TV for researching stories. Newspapers and magazines used in researching stories. Social functions where you are reporting on them. Sunglasses, sunhats and sun screen lotions where the nature of your work requires you to work in the sun for all or part of the day. NURSES: Traditional uniforms of cap, white uniform dress, cardigan and special non slip shoes, laboratory coats, aprons, admissions to nursing agencies, annual practising certificates and nurses fob watch. Cost of buying, renting, repairing and cleaning work related uniforms, occupation specific clothing or protective clothing, laboratory coats, aprons and special non slip shoes, commissions to nursing agencies, annual practising certificate and nurses fob watch. Self education expenses if it is to maintain or improve specific skills or knowledge required in your current employment. FACTORY WORKERS: Safety glass, goggles, gloves, helmets, hearing protection and breathing masks Wet weather gear or safety boots worn when using chemicals or high pressure hoses Boning and filleting knives Forklift licence and cost of special licences Thermal underwear if working in extreme environments such as a chiller or freezer Sunglasses, sunhats and sun screen lotions if you are required to work in the sun for all or part of the day Depreciation on work related equipment Licence renewals

12 TAX IQ 2009 TAX RETURNS SPECIAL I 12 CLEANERS: Safety glasses, goggles, gloves and breathing masks Wet weather gear or steel capped boots worn when using chemicals or high pressure hoses Industry publications Costs of cleaning cloths, chemicals and equipment Sunglasses, sunhats and sun screen lotions if you are required to work in the sun for all or part of the day SHOP ASSISTANTS: Payment of shortfalls from the register Special coats, dust coats, overalls, aprons and protective safety boots Education expenses for traineeships Industry magazines, especially for shop assistants working in computer stores LAWYERS: Barrister's robes, wigs, annual practising certificate costs Supreme court library fees Travelling between workplace and client's office including parking fees, bridge fees and road tolls BUILDERS: Harnesses, goggles, breathing masks, helmets Wet weather gear worn when using chemicals or high pressure hoses Travel between work sites Building tools and equipment Licence renewal fees Sunglasses, sunhats and sun screen lotions when required to work in the sun during all or part of the day REAL ESTATE EMPLOYEES: Renewal costs for your annual certificate of registration Advertising if you are receiving income from commission Costs of newspapers containing property sections Costs incurred in property presentations Referral costs paid if earning commission POLICE OFFICERS: Ammunition, bullet proof jackets and vests or body armour, gauntlets, holsters, hand grips, handcuffs, holders, pouches, utility belts, gun cleaning materials and other equipment used for work or training. Diving equipment and equestrian related equipment when needed for your employment Informant payments made in the course of duty Specific fitness expenses, safety glasses, unique and distinctive clothing including physical training clothing Additional costs for special (not standard) licences HAIRDRESSERS: Hairdressing vests, aprons and protective shoes, scissors, electric clippers, combs, curlers, razors Costs of attending competitions, conferences, seminars, shows and training, photographs prepared as part of a competition or required for apprenticeship training TEACHERS: Laboratory coats and art smocks, stop watches including repairs and batteries, excursions, school trips and camps, teaching aids, higher degree education expenses Sunglasses, sunhats and sun screen lotions if required to work in the sun for all or part of the day HOSPITALITY INDUSTRY EMPLOYEES: Traditional chefs uniform including checked pants, shirt, hat and white jacket Knives and equipment Gaming licence, special employee's licence renewals Seminars, conferences and training courses that are sufficiently connected to your work activities AIRLINE EMPLOYEES: Flight Attendants Moisturisers and re hydrating hair conditioners used when working in abnormally dry aircraft cabin conditions Shoes and hosiery when part of uniform Luggage and luggage trolleys Pilots Luggage and luggage trolleys, medical examinations associated with licence renewals, anti glare glasses Flight Engineers Luggage and luggage trolleys, anti glare glasses Ground Engineers Wet weather gear to protect clothing from tarmac soiling PERFORMING ARTISTS: Commissions paid to theatrical agents, coaching classes, specific (not general) fitness expenses Glasses, contact lenses, specific hairdressing (not general), stage make up and cleansing materials where required for performances Photographic portfolios, audio tapes, video tapes and compact discs, theatre and film tickets DEFENCE FORCE MEMBERS: Specific (not general) fitness expenses, safety glasses, compulsory mess subscriptions, extra regimental duties costs if required, additional or more sophisticated weapon related equipment, ammunition and cleaning equipment, special characteristic watches and stop watches, costs for special (not standard) licences, sunglasses, sunhats and sun screen lotions where required to work in the sun for all or part of the day. MINING SITE EMPLOYEES: Uniforms and protective clothing but not conventional clothing such as jeans and work shirts. Education expenses at University or TAFE if related to current work but not pre-vocational courses. The Tax Office advises that travel costs from home to place of departure nominated under fly-in/fly-out arrangements is not deductible. Renewal fees for machinery operating licences or tickets but not the cost of the first licence or ticket. Travel expenses from home to work are deductible if you have to carry bulky tools and equipment and there is no secure area provided to leave them on site. Union fees. Work related phone calls. CONSTRUCTION TRADES PEOPLE: Uniforms and protective clothing but not conventional clothing such as jeans and work shirts. Self-education expenses at University or TAFE if related to current work the cost of pre-apprenticeship or prevocational courses are not deductible nor is the Initial cost of obtaining work permits or certificates. Car or travelling expenses for travel between work sites and for travel between home and work if you have to carry bulky tools and equipment and there is no secure area provided to leave them on site. Tools and equipment. Union fees. Work related phone calls. GUARDS AND SECURITY EMPLOYEES: Ammunition, bullet proof jackets and vests or body armour, holsters, utility belts, gun cleaning materials and other similar equipment. Uniforms and protective clothing but not conventional clothing such as suits or work shirts. The Tax Office advises that oversized conventional clothing worn to conceal a protective vest or weapon while on home clothed duty is not deductible. Self education expenses for University or TAFE courses if related to current work but not pre-vocational courses, the cost of obtaining a drivers or an initial security licence is not deductible. FITNESS AND SPORTING INDUSTRY EMPLOYEES: Work related travel to conferences and seminars (travel diary needed where travel exceeds five consecutive nights) compulsory uniforms required to be worn while on duty but not tracksuits, shorts, tank tops, running shoes, sweat socks, arm bands, head bands or t shirts considered by the Tax Office to be conventional clothing. Self education expenses for a University or TAFE course if related to current work. Equipment used for work purposes where cost does not exceed $300 otherwise you can claim depreciation.

13 TAX IQ 2009 TAX RETURNS SPECIAL I 13 5 Sun protective items if employment requires performance of duties outdoors. TRAVEL AGENTS: Travel expenses to attend business conferences, seminars and training courses. Also, travel to attend industry promotions but not if the primary purpose is entertainment. Travel for familiarisation is deductible but only if you can demonstrate that it was not a holiday. Record keeping and reports would be essential, passport application and renewal fees and travel insurance are, according to the Tax Office, not deductible. INFORMATION TECHNOLOGY PROFESSIONALS Travel expenses to attend business conferences, seminars and other work related events. Tools and equipment required for work (deductible in full if under $300). Home office expenses. Mobile phone calls, home telephone calls, internet usage (apportioned between work and private use). Union and professional association fees. Self education expenses if related to current work. MECHANICS AND ELECTRICIANS Car expenses while driving between work sites, making deliveries, visiting clients or site inspections and errands while on duty. Home to work travel is deductible if you have to carry bulky equipment which you could not leave at work or are engaged in itinerant work. Uniforms and protective clothing, tools and equipment (fully deductible if under $300). Union fees and professional association memberships. Overtime meal expenses. Self education expenses if related to current work. TRUCK DRIVERS Steel capped boots and overalls for protection from grease, sunglasses, sunhats and sun screen lotions if required to work in the sun for all or part of the day. Truck repairs, cleaning and spillage, parking fees, bridge and road tolls. CB radio, portable refrigerator and sleeping bag (depreciable if costing above $300). BUSINESS PROFESSIONALS Travelling to attend conferences, seminars and other work related events, tools and equipment (depreciable if costing more than $300). Home office expenses. Mobile phone calls, home phone calls and internet usage (apportioned between business and private use). Union fees and professional association memberships. Self education expenses if related to current work. SMALL BUSINESS CONCESSIONS If the annual turnover of your business and any associated businesses is less than $2 million you will be eligible for the small business concessions. Additionally you can access the small business CGT concessions even if you do not satisfy the $6 million net asset threshold. You do not have to apply or take any formal step to gain access. You simply choose which concessions you want. CONCESSIONS AVAILABLE: Income Tax Simplified trading stock rules Simpler depreciation rules Entrepreneurs' tax offset PAYG instalments based on GDP adjusted and notional tax Two year period for amending assessments (some exceptions) Immediate deductions for certain pre-payments GST: Choice to account for GST on a cash basis Choice to pay GST by instalments Annual apportionment of GST input tax credits Capital Gains Tax: CGT 15 year asset exemption CGT 50% active asset reduction CGT retirement exemption CGT rollover provisions Fringe Benefits Tax FBT car parking exemption DEPRECIATION AND EFFECTIVE LIVES 6 If you purchase an asset for your business which declines in value during its lifetime, you can usually claim a deduction equivalent to the decline in value. This is called depreciation and you need to work out the effective life of the asset in order to determine the depreciation rate. If you are depreciating on the diminishing value basis, divide 150 by the effective life in years in respect of plant purchased up to 10 May For plant purchased after that date you can divide 200 by the effective life in years thereby increasing the depreciation rate. If claiming on the prime cost basis, divide 100 by the effective life in years. You can work out the effective life yourself, but it is important to have independent evidence in order to satisfy the Tax Office in the event of a subsequent tax audit. Alternatively, you can use the safe harbour rates set out by the Tax Office in Taxation Ruling TR2007/3. The following tables show the plant item and the effective life (in years) determined by the Tax Office. These rates apply to plant items acquired after the date specified in the table. To make the tables simpler and more understandable for most business people, we have omitted plant items for businesses normally conducted by very large national and multi national companies. Items omitted relate to the following industries: Mining Coal mining Oil and gas extraction Iron ore mining Gold ore mining Mineral sand mining Nickel ore mining Construction material mining Petroleum Exploration Services Mineral Exploration Services Meat and meat product manufacturing Dairy product manufacturing Fruit and vegetables manufacturing Cereal and pasta product manufacturing Bakery product manufacturing Sugar and confectionery manufacturing Beverage manufacturing Beer manufacturing Wine and other alcoholic beverage manufacturing Cigarette and tobacco manufacturing Reconstituted wood product manufacturing Pulp, paper and converted paper product manufacturing Paper stationery manufacturing Petroleum refining Basic chemical and chemical product manufacturing Pharmaceutical and medicinal product manufacturing Cleaning compound and toiletry preparation manufacturing Other basic chemical product manufacturing Glass and glass product manufacturing Alumina production Aluminium smelting Photographic, optical and ophthalmic equipment manufacturing Other professional and scientific equipment manufacturing (NEC) Electricity supply Gas supply

14 TAX IQ 2009 TAX RETURNS SPECIAL I 14 Irrigation water providers Water supply Sewerage and drainage services Rail transport Material handling plant and equipment at ports Airport operations and other air transport support services Other transport support services (NEC) Motion picture and sound recording activities Television broadcasting If you need to know effective lives of plant items for any of these industries, just write in and we can supply them. There are two tables. Table A lists plant items under particular industry headings. If you are determining effective lives in relation to plant items held by the industries listed, you must use that table. If you are not in any of the industries listed, you must use Table B. If you are in a listed industry, but the relevant plant item is not included as a specific item or under a general class, you should then turn to Table B. If the item is not listed in either Table A or Table B, it means that the effective life of that item has not been determined by the Tax Office and you will have to assess the effective life using the criteria set out in Chapter 6 of the Australian Taxation Manual. If you assess the effective life yourself you need independent supporting evidence. The tables list the effective lives of new assets only. If you purchase a secondhand item, you can assess the effective life yourself. Because it is secondhand, it will most likely have a shorter effective life. The effective lives for aeroplanes, helicopters, trucks and buses have been fixed by legislation. These fixed (capped) rates are shown in Table B and not the Tax Office higher figures. HORTICULTURAL PLANTS Table A includes effective lives for horticultural plants. This applies to capital expenditure incurred in establishing a horticultural plantation or grapevines. The depreciation rate for these items is calculated in a different way. Establishment costs include the plants, land preparation (ploughing, fertilizing and stone removal but not initial clearing), pots and potting machines, grafting trees and replacement of existing plants and trees due to uneconomic returns. The cost of replacing plants in an existing plantation due to disease or storm damage is deductible in full. The depreciation rate which can be applied is in accordance with the following table. Effective Life (years) Depreciation Rate Less than 3 years 100% 3 years to less than 5 years 40% 5 years to less than 6 years 27% 6 years to less than 10 years 20% 10 years to less than 13 years 17% 13 years to less than 30 years 13% 30 years or more 7% The rate must be prorated in the year of establishment. Effective lives of horticultural plants and grapevines are listed in Section 7 under the heading Agriculture, Forestry and Fishing.

15 AGRICULTURE, FORESTRY AND FISHING General All terrain vehicles (ATVs)...1/7/07 5 Glasshouses, hot houses, germination rooms, plastic clad tunnels and igloos...1/7/06 20 Fences (except stockyard, pen and portable fences) General...1/7/08 30 Electric...1/7/08 20 Fence energisers (electric): Mains power...1/7/08 10 Portable...1/7/08 5 Fertigation systems: Pumps...1/7/08 3 Tanks...1/7/08 10 Grading and packing assets: Bananas assets: Air rams...1/7/08 3 Bunch lines...1/7/08 10 Choppers/mulchers...1/7/08 8 Rails (including points)...1/7/08 15 Scrap conveyors...1/7/08 5 Tops...1/7/08 8 Water troughs...1/7/08 10 Coffee assets: Dryers...1/7/08 15 Processors...1/7/08 10 Fermentation tanks...1/7/08 10 Hullers...1/7/08 12 Washers/separators...1/7/08 10 General assets: Bin tippers...1/7/08 15 Conveyors and elevators...1/7/08 10 Drying tunnels...1/7/08 15 Fungicide units...1/7/08 12 Receival hoppers...1/7/08 15 Tables...1/7/08 15 Washing assets...1/7/08 10 Waxing assets...1/7/08 12 Graders: Electronic...1/7/08 10 Mechanical...1/7/08 15 Optical...1/7/08 10 Labelling assets: Labelling applicators...1/7/08 8 Labelling guns...1/7/08 3 Olive oil processing assets...1/7/08 15 Tree nut assets: De-husking units...1/7/08 8 Drying silos...1/7/08 20 Trommels...1/7/08 15 Packing assets...1/7/08 10 Scales (excluding platform )...1/7/08 5 Livestock grids...1/7/08 40 Motor cycles...1/7/07 5 Post driver/hole diggers...1/7/08 10 Shade houses and netting constructions...1/7/06 20 Machinery sheds, workshop sheds, and farm production sheds...1/1/07 40 Tractors...1/7/07 12 Water assets: Bores...1/7/08 30 Dams (incl earth or rock fill and turkey nests)...1/7/08 40 Dam liners and covers...1/7/08 20 Effluent channels...1/7/08 40 Effluent recycle tanks...1/7/08 12 Effluent sedimentation ponds...1/7/08 40 Irrigation assets: Polyethylene pipes (above ground)...1/7/08 10 TAX IQ 2009 TAX RETURNS SPECIAL I 15 7 EFFECTIVE LIVES TABLE A (INDUSTRY CATEGORIES) Drippers, micro sprays and mini sprinklers...1/7/08 5 Control systems...1/7/08 10 Filtration systems...1/7/08 15 Pumps...1/7/08 12 Variable speed drives...1/7/08 15 Irrigation earth channels...1/7/08 40 Fresh water irrigators...1/7/08 20 Effluent irrigators...1/7/08 10 Pumps bore, effluent and manure...1/7/08 7 Pumps other...1/7/08 12 Water mains aluminium...1/7/08 20 Water mains galvanised steel...1/7/08 25 Water mains polyethylene...1/7/08 20 Water mains PVC...1/7/08 30 Water tanks concrete...1/7/08 30 Water tanks galvanised steel...1/7/08 25 Water tanks polyethylene...1/7/08 15 Water tower (brick)...1/1/ Water troughs concrete...1/7/08 25 Water troughs galvanised steel...1/7/08 15 Water troughs polyethylene...1/7/08 10 Windmills...1/7/08 30 Water pressure cleaners...1/7/08 5 Agriculture Bee farming plant: Beehives...1/1/01 Processing plant...1/1/01 20 Beef cattle assets: Cattle handling assets: Calf cradle...1/1/07 10 Cattle crushers...1/1/07 10 NLIS and other readers...1/1/07 5 Scales, weigh indicators and loading bars...1/1/07 5 Cattle yards (steel and timber): Permanent type...1/1/07 30 Portable type...1/1/07 20 Feed bins including hay racks...1/1/07 15 Feed handling assets: Bale feeders...1/1/07 10 Feed mixers...1/1/07 10 Silage and feedout wagons...1/1/07 10 Loading ramps...1/1/07 20 Manure and fertiliser spreaders...1/1/07 10 Saddlery and harness...1/1/07 10 Beef cattle feedlot assets: Cattle handling assets: Cattle crushers...1/1/07 6 Cattle induction and transfer yards...1/1/07 20 Cattle treatment yards...1/1/07 20 Cattle wash yards...1/1/07 20 Bunk sweepers...1/1/07 8 Feed bunks or troughs and aprons...1/1/07 20 Feed roads...1/1/07 20 Pen earthworks...1/1/07 20 Pen fences and gates...1/1/07 20 Shade structures...1/1/07 20 Pen Scrapers...1/1/07 10 Feed milling and handling assets: Augers...1/1/07 10 Conveyors & elevators...1/1/07 15 Water assets: Drinking systems...1/1/07 10 Commodity storage facilities...1/1/07 30 Feed mixers...1/1/07 7 Feed mixer trucks...1/1/07 7 Grain cleaners...1/1/07 10 Grain processing assets: Roller mills...1/1/07 15

16 Steam flaking chests...1/1/07 15 Steam flaking surge bins...1/1/07 15 Tempering silos: Glass fused to steel...1/1/07 50 Stainless steel...1/1/07 15 Galvanised steel...1/1/07 12 Receival pits and hoppers...1/1/07 25 Roughage processing assets...1/1/07 7 Sampling and testing assets:...1/1/07 5 Silos and bins (dry): Concrete...1/1/07 50 Steel...1/1/07 20 Tank storages (liquid)...1/1/07 15 Manure composting and screening machines...1/1/07 15 Bridges (wooden)...1/1/01 20 Cotton sheds (humidification)...1/1/01 20 Curing barns...1/1/01 Dairy cattle farming assets: Automatic calf feeders...1/7/07 10 Commodity storage facilities...1/7/07 30 Exercise yards...1/7/07 20 Feeding and maternity barns...1/7/07 20 Cattle handling assets: Air operated gates...1/7/07 10 All terrain vehicles (ATVS)...1/7/07 3 Automatic drafting systems...1/7/07 7 Automatic ID systems...1/7/07 7 Automatic weighing systems...1/7/07 5 Backing gates...1/7/07 15 Calf cradles...1/7/07 10 Cattle crushers...1/7/07 10 Cattle yards...1/7/07 30 Dairy milking sheds...1/7/07 30 Dairy yards and races...1/7/07 20 Teat spraying systems: Automatic...1/7/07 7 Manual...1/7/07 10 Clean-up assets: High pressure pumps and hoses...1/7/07 10 Hot water services...1/7/07 10 Milk line washing systems: Automatic and Manual...1/7/07 10 Feed milling and handling assets: Augers...1/7/07 10 Conveyors and elevators...1/7/07 15 Feed pads and bunkers...1/7/07 30 Feeding systems: Automatic...1/7/07 12 Manual...1/7/07 15 Feed mixers...1/7/07 7 Grain mills...1/7/07 15 Manure spreaders...1/7/07 10 Silage pits...1/7/07 40 Silage wagons...1/7/07 10 Silos (steel)...1/7/07 20 Telescopic handlers...1/7/07 10 Tub grinders...1/7/07 7 Milk handling assets: Automatic cluster removers...1/7/07 10 Baling systems: Herringbone, Rotary and Walk through...1/7/07 15 Filters...1/7/07 15 Milking systems...1/7/07 15 Milk meters...1/7/07 10 Milk vats...1/7/07 25 Plate coolers...1/7/07 15 Receivers...1/7/07 15 Refrigeration compressors...1/7/07 10 Grain, cotton, peanut and rice assets: Chemical spraying assets: TAX IQ 2009 TAX RETURNS SPECIAL I 16 7 EFFECTIVE LIVES TABLE A (INDUSTRY CATEGORIES) Generally... 1/1/07 10 Self propelled... 1/1/07 8 General assets: Aeration assets: Controllers... 1/1/07 10 Kits... 1/1/07 15 Augers and conveyors... 1/1/07 15 Dryers... 1/1/07 20 Moisture meters... 1/1/07 5 Mulchers... 1/1/07 10 Peanut pre-cleaners... 1/1/07 10 Slashers... 1/1/07 7 Harvesting assets: Boll buggies... 1/1/07 15 Chaser bins... 1/1/07 15 Combine harvesters... 1/1/07 12 Cotton pickers/strippers... 1/1/07 10 Field bins... 1/1/07 20 Fuel trailers... 1/1/07 15 Module builders... 1/1/07 15 Module tarpaulins... 1/1/07 5 Peanut diggers and pullers... 1/1/07 10 Peanut threshers... 1/1/07 12 Precision farming assets... 1/1/07 5 Seeding and fertilising assets: Fertiliser spreaders... 1/1/07 10 Planters... 1/1/07 15 Seed and fertiliser bins... 1/1/07 15 Tillage assets: Generally... 1/1/07 15 Harrows... 1/1/07 5 Laser controlled scrapers: Transmitters... 1/1/07 7 Buckets... 1/1/07 10 Rippers... 1/1/07 10 Harvester/sweeper... 1/1/01 Hay and foraging assets: Bale handling attachments... 1/1/07 12 Balers... 1/1/07 10 Bale wrappers... 1/1/07 10 Balers and wrappers... 1/1/07 10 Forage harvesters... 1/1/07 10 Hay rakes... 1/1/07 10 Moisture probes... 1/1/07 5 Mower conditioners: Self propelled: Attachments... 1/1/07 8 Prime movers... 1/1/07 12 Trailed... 1/1/07 8 Super conditioners... 1/1/07 8 Tedders... 1/1/07 10 Trailed bale handling assets: Big square bale stackers... 1/1/07 10 Generally... 1/1/07 15 Windrowers: Self propelled: Attachments... 1/1/07 8 Prime movers... 1/1/07 12 Trailed... 1/1/07 12 Hop growers' plant: Hop picking machine... 1/1/01 Kilns... 1/1/01 20 Horse stalls (Breeze way Shed row)... 1/1/01 33⅓ Horticultural plants: Citrus: Grapefruit... 1/1/01 30 Lemon... 1/1/01 20 Limes... 1/1/01 20 Mandarin... 1/1/01 25 Orange... 1/1/01 30 Grapevines, dried... 1/10/04 15 Grapevines, table... 1/10/04 15

17 Grapevines, wine...1/10/04 20 Nuts: Almond...1/7/01 25 Cashew...1/7/01 25 Chestnut...1/7/01 25 Hazelnut...1/7/01 25 Jojoba...1/7/01 30 Macadamia...1/7/01 25 Pecan...1/7/01 25 Pistachio...1/7/01 25 Walnut...1/7/01 25 Pome: Apple...1/1/01 20 Pear...1/1/01 25 Stone Fruit: Apricots...1/1/01 10 Cherries...1/1/01 18 Nectarine...1/1/01 10 Olives...1/1/01 30 Peach...1/1/01 10 Plum...1/1/01 15 Prune...1/1/01 20 Tropical: Avocado...1/1/01 20 Mango...1/1/01 30 Levee banks and revetments...1/1/01 40 Pea-viners, pea cleaners, vine and straw conveyors...1/1/01 10 Peanut blanching plant: Air piping...1/1/01 20 Blanchers...1/1/01 10 Colour sorter (electronic)...1/1/01 10 Control panel...1/1/01 20 Cooling equipment...1/1/01 Elevators...1/1/01 10 Exhaust fans...1/1/01 20 Fumigation equipment...1/1/01 10 Pal boxes...1/1/01 3 Plant water services...1/1/01 50 Roaster and dryer...1/1/01 10 Scales...1/1/01 20 Storage surge bins...1/1/01 20 Tipping unit...1/1/01 20 Transformers...1/1/01 40 Vibrating conveyors...1/1/01 10 Sheep farming assets: Crutching machines (portable)...1/1/07 10 Dipping and spraying assets: Jet spray system...1/1/07 10 Mobile plunge dips...1/1/07 5 Feeders...1/1/07 15 Footbaths...1/1/07 10 Instruments for measuring wool fibre fineness (laser)...1/1/07 10 Instruments for measuring backfat or eye muscle or detecting pregnancy (ultrasound)...1/1/07 5 Sheep handling assets...1/1/07 15 Weigh bars, indicators and platforms...1/1/07 10 Yards, races and loading ramps: Permanent type...1/1/07 40 Portable type...1/1/07 25 Wool shed assets: Grinding machines...1/1/07 30 Shearing machines...1/1/07 30 Handpieces...1/1/07 10 Wool bale movers...1/1/07 10 Wool pressers...1/1/07 20 Woolsheds & shearing sheds...1/1/07 50 Wool tables, steel type...1/1/07 20 Silos: Ancillary equipment...1/1/01 20 TAX IQ 2009 TAX RETURNS SPECIAL I 17 7 EFFECTIVE LIVES TABLE A (INDUSTRY CATEGORIES) Grain (metal)... 1/7/01 30 Stud stock and thoroughbred horses... 1/1/01 10 Trellis... 1/1/01 20 Nursery and Floriculture Production Chemical spraying assets: Generally... 1/7/06 10 Environmental control assets: Boilers (incl pipe)... 1/7/06 20 Control systems... 1/7/06 10 Evaporative coolers... 1/7/06 10 Heating assets... 1/7/06 10 Instruments (incl sensors)... 1/7/06 10 Retractable screens... 1/7/06 8 Ventilation fans... 1/7/06 5 Fertigation system assets... 1/7/06 10 General assets: Bins and pallets... 1/7/06 5 Fertiliser spreaders... 1/7/06 10 Fumigation assets... 1/7/06 5 Pasteurisation rooms... 1/7/06 20 Steam boilers (pasteurisation)... 1/7/06 15 Racks... 1/7/06 15 Ride-on mowers... 1/7/06 5 Insulation panels (cool rooms)... 1/7/06 40 Refrigeration... 1/7/06 10 Trailers... 1/7/06 15 Trolleys... 1/7/06 15 Weed mats... 1/7/06 5 Harvesting assets: Bed lifters and diggers... 1/7/06 10 Tree spades... 1/7/06 15 Packaging assets: Deleafers... 1/7/06 15 Bunching & bundling machines... 1/7/06 15 Grading machines... 1/7/06 15 Planting assets: Benches and tables... 1/7/06 10 Conveyors... 1/7/06 15 Dibblers and seeders... 1/7/06 15 Hoppers... 1/7/06 15 Pot, punnet & tray dispensers... 1/7/06 12 Potting machines... 1/7/06 10 Soil elevators... 1/7/06 10 Soil mixers... 1/7/06 10 Transplanters... 1/7/06 8 Tray and punnet fillers... 1/7/06 10 Tray washers... 1/7/06 15 Vermiculite dispensers... 1/7/06 15 Propagation assets: Heated propagators... 1/7/06 10 Seedling and punnet trays, reusable... 1/7/06 3 Turf growing assets: Chemical spraying assets... 1/7/06 10 Fertilizer spreaders... 1/7/06 10 Field top makers... 1/7/06 10 Land planes... 1/7/06 25 Line planters... 1/7/06 10 Mowers... 1/7/06 10 Net layers... 1/7/06 10 Power harrows... 1/7/06 10 Roll layers... 1/7/06 10 Soil aerators... 1/7/06 10 Trailers... 1/7/06 15 Turf harvesters... 1/7/06 10 Turf rollers... 1/7/06 15 Turf seeders... 1/7/06 15 Turf vacuums... 1/7/06 10 Mushroom Growing Air handling systems... 1/7/08 10 Boilers... 1/7/08 10 Cashing machines... 1/7/08 10 Compost Phase 1 assets:

18 Bunkers...1/7/08 10 Machinery...1/7/08 4 Protective structures...1/7/08 10 Pumps...1/7/08 3 Control systems...1/7/08 10 Filling and emptying machines...1/7/08 10 Growing systems: Shelves: Aluminium...1/7/08 15 Other material...1/7/08 10 Trays (wood)...1/7/08 5 Mushroom graders...1/7/08 5 Sheds...1/7/08 40 Slicing machines...1/7/08 5 Spawning machines...1/7/08 12 Trolleys...1/7/08 10 Tunnels/Rooms: Peak heat and spawn running...1/7/08 10 Growing...1/7/08 15 Vacuum coolers...1/7/08 10 Weighing machines...1/7/08 10 Hydroponics Hanging gutters...1/7/07 10 Troughs...1/7/07 10 Hydroponic growers may use the effective life in Nursery and Floriculture Production. Vegetable and Cane Growing Chemical spraying assets: Generally...1/7/07 10 Self-propelled...1/7/07 8 Fertiliser spreaders: Generally...1/7/07 10 Spinner...1/7/07 5 General assets: Bins: Plastic...1/7/07 10 Timber...1/7/07 5 Mulch layers...1/7/07 12 Mulch lifters...1/7/07 12 Mulchers...1/7/07 8 Rakes (eg cane trash rake)...1/7/07 10 Slashers...1/7/07 8 Harvesting assets: Cane haul out bins...1/7/07 12 Harvesters...1/7/07 10 Harvesting aids...1/7/07 15 Onion lifters...1/7/07 10 Trailers...1/7/07 15 Windrowers...1/7/07 10 Planting assets: Billet planters...1/7/07 12 Potato cutters...1/7/07 15 Potato planters...1/7/07 10 Precision seeders...1/7/07 10 Transplanters (automated)...1/7/07 7 Transplanters (manual)...1/7/07 10 Tillage assets: Generally...1/7/07 15 PTO operated...1/7/07 8 Trellising assets: Stake drivers...1/7/07 12 Stake pullers...1/7/07 12 Trellising...1/7/07 5 Wire winders...1/7/07 15 Fruit Growing Cleaning and mulching assets: Mowers...1/7/08 8 Mulchers...1/7/08 6 Slashers...1/7/08 8 Sweeper attachments...1/7/08 10 Crop protection assets: TAX IQ 2009 TAX RETURNS SPECIAL I 18 7 EFFECTIVE LIVES TABLE A (INDUSTRY CATEGORIES) Applicators... 1/7/08 15 Banana bagging machines... 1/7/08 10 Banana ripening bags... 1/7/08 3 Sprayers... 1/7/08 10 Temporary bird netting... 1/7/08 5 Under vine weeder... 1/7/08 10 Vine covers... 1/7/08 3 Dried fruit assets: Generally... 1/7/08 15 Drying sheets... 1/7/08 10 Trays... 1/7/08 10 Fertilising assets: Fertigation systems: Pumps... 1/7/08 3 Tanks... 1/7/08 10 Spreaders: Generally... 1/ Spinners... 1/7/08 5 General assets: Bins: Plastic... 1/7/08 10 Timber... 1/7/08 5 Crates... 1/7/08 5 Elevated work platforms... 1/7/08 10 Frost fans... 1/7/08 15 Mulch layers... 1/7/08 12 Mulch lifters... 1/7/08 12 Orchard ladders... 1/7/08 10 Post driver/hole diggers... 1/7/08 10 Refractometers... 1/7/08 10 Water pressure cleaners... 1/7/08 5 Harvesting assets: Grape harvesters... 1/7/08 10 Harvest aids... 1/7/08 15 Picking bags... 1/7/08 3 Picking platforms... 1/7/08 10 Picking trolleys... 1/7/08 5 Trailers... 1/7/08 15 Tree shakers... 1/7/08 10 Planting assets: Hole burners... 1/7/08 10 Planters... 1/7/08 12 Tree guards... 1/7/08 2 Trellising... 1/7/08 20 Weed matting... 1/7/08 5 Pruning assets: Chain saws... 1/7/08 3 Electric hand pruners... 1/7/08 3 Manual hand pruners... 1/7/08 2 Mechanical pruning assets... 1/7/08 10 Pneumatic pruners: Compressors... 1/7/08 10 Hand tools... 1/7/08 5 Vine leaf removers... 1/7/08 15 Tillage assets: Generally... 1/7/08 15 PTO operated... 1/7/08 8 Coffee, Olive and Tree Nut Growing Chemical spraying assets... 1/7/07 10 Cleaning and mulching assets: Blowers... 1/7/07 10 Mowers... 1/7/07 8 Mulchers... 1/7/07 8 Slashers... 1/7/07 10 Sweeper attachments... 1/7/07 10 Fertiliser spreaders... 1/7/07 10 General assets: Bins: Plastic... 1/7/07 10 Timber... 1/7/07 5 Stakes (incl trellising)... 1/7/07 3 Harvesting assets:

19 TAX IQ 2009 TAX RETURNS SPECIAL I 19 7 EFFECTIVE LIVES TABLE A (INDUSTRY CATEGORIES) Bankouts (almonds)...1/7/07 15 Catcher nets...1/7/07 10 Elevators (almonds)...1/7/07 12 Harvesters: Coffee, Olive, Nuts...1/7/07 10 Macadamia mower mounted...1/7/07 8 Pick-ups (eg almonds)...1/7/07 12 Sweepers...1/7/07 12 Tree shakers...1/7/07 10 Reservoir carts (almonds)...1/7/07 15 Harvesting pole rakes...1/7/07 5 Trailers...1/7/07 15 Pruning assets: Chain saws...1/7/07 5 Electric hand pruners...1/7/07 3 Manual hand pruners...1/7/07 2 Pneumatic pruners: Compressor...1/7/07 10 Hand tools...1/7/07 5 Poultry Farming for Breeding, Eggs and Meat Animal housing structures...1/1/07 20 Animal housing assets: Control systems...1/1/07 10 Curtains: Baffles, brooders...1/1/07 10 Sidewalls...1/1/07 5 Tunnel inlets...1/1/07 10 Evaporative cooling systems...1/1/07 10 Foggers...1/1/07 10 Heaters...1/1/07 15 Minimum vents...1/1/07 12 Sensors...1/1/07 4 Tunnel inlet panels...1/1/07 15 Exhaust fans...1/1/07 12 Stirrer fans...1/1/07 15 Cages (for egg layers)...1/1/07 20 Egg belt systems...1/1/07 15 Egg conveyors, counters & elevators...1/1/07 15 Egg grading and packing assets: Egg grader and packing systems...1/1/07 10 Pallet levellers (coil spring)...1/1/07 25 Palletisers...1/1/07 10 Trolley lifters...1/1/07 15 Farm trolleys: Chicken transport...1/1/07 10 Egg transport...1/1/07 10 Feeding system...1/1/07 10 Generators (emergency)...1/1/07 20 Hanging cable systems...1/1/07 15 Manure belt systems...1/1/07 15 Manure conveyors...1/1/07 10 Nest housing...1/1/07 15 Silos for feed: Metal...1/1/07 20 Ancillary equipment: Augurs...1/1/07 10 Conveyors and elevators...1/1/07 15 Drinking systems...1/1/07 10 Winches...1/1/07 10 Poultry Hatcheries Air handlers...1/1/07 20 Boilers...1/1/07 20 Candling equipment...1/1/07 20 Chick counters...1/1/07 20 Chilled water plants...1/1/07 20 Control systems...1/1/07 10 Condensers/heat exchangers...1/1/07 10 Conveyors...1/1/07 20 Generators (emergency)...1/1/07 20 Hatchers, trolleys/dollies...1/1/07 10 Hatcher baskets...1/1/07 10 Hatchers (including integrated controller unit)... 1/1/07 20 Hatchery buildings... 1/1/07 40 Macerators... 1/1/07 20 Separators chick and egg... 1/1/07 20 Setter trays... 1/1/07 10 Setter trolley unloaders... 1/1/07 20 Setter tolleys... 1/1/07 10 Setters/incubators... 1/1/07 20 Stacker/de-stacker systems... 1/1/07 20 Transfer machines... 1/1/07 20 Vaccinators... 1/1/07 15 Vacuum/augur systems (waste)... 1/1/07 20 Washing assets... 1/1/07 20 Pig Farming Animal housing structures:... 1/7/08 20 Sidewalls... 1/7/08 10 Floors (suspended type): Concrete & plastic... 1/7/08 10 Steel... 1/7/08 5 Control systems... 1/7/08 10 Dry feed systems... 1/7/08 10 Effluent separators/effluent fan extractors... 1/7/08 10 Evaporative cooling systems... 1/7/08 10 Exhaust fans... 1/7/08 10 Stirrer fans... 1/7/08 10 Farrowing crates... 1/7/08 10 Generators (emergency)... 1/7/08 20 Heaters and heat lamps... 1/7/08 5 High pressure cleaners... 1/7/08 3 Instruments for measuring backfat or detecting pregnancy (ultrasound)... 1/7/08 5 Liquid feed systems... 1/7/08 10 Milling assets... 1/7/08 10 Mixing assets... 1/7/08 10 Pens... 1/7/08 10 Silos: Readyfeed... 1/7/08 10 Grain storage... 1/7/08 20 Tank storage (liquid feed)... 1/7/08 20 Drinking systems... 1/7/08 10 Effluent tanks (concrete)... 1/7/08 20 Weigh bars, weigh indicators and weigh platforms... 1/7/08 5 Aquaculture Aeration assets: Direct supply systems: Fresh water... 1/7/07 6 Salt water... 1/7/07 3 Indirect supply systems... 1/7/07 10 Aquaculture tanks: Concrete... 1/7/07 20 Fibreglass... 1/7/07 15 Polyethylene... 1/7/07 20 Raceways... 1/7/07 20 Transport of live products... 1/7/07 10 Bins and crates... 1/7/07 5 Cooling assets... 1/7/07 10 Control systems... 1/7/07 10 Environmental & protective control structures... 1/7/07 15 Feeders... 1/7/07 5 Graders... 1/7/07 10 Harvesting nets... 1/7/07 4 Hatching assets... 1/7/07 10 Heating assets: Direct (freshwater) (including immersion heaters)... 1/7/07 10 Direct (salt water)... 1/7/07 5 Indirect... 1/7/07 10

20 Instruments...1/7/07 5 Oyster farming assets: Oyster growing structures...1/7/07 10 Baskets...1/7/07 8 Rumblers...1/7/07 10 Sticks...1/7/07 5 Plastic trays...1/7/07 8 Timber trays...1/7/07 5 Vats, treatment...1/7/07 15 Pearling and oyster fishing plant: Luggers (oyster fishing)...1/1/01 33⅓ Pearling boats...1/1/01 20 Generators...1/7/07 15 Processing assets: Conveyors, elevators & hoppers...1/7/07 10 Cookers...1/7/07 10 Packaging assets...1/7/07 10 Refrigeration assets: Insulation panels (salt water environment)...1/7/07 20 Sea cages...1/7/07 10 Water assets: Channels & ponds...1/7/07 20 Liners and erosion matting...1/7/07 15 Pipes and pipelines: Above ground...1/7/07 10 Inground...1/7/07 30 Fresh water pumps...1/7/07 10 Salt water pumps...1/7/07 5 Single phase transfer pumps: Fresh water...1/7/07 5 Salt water...1/7/07 3 Water treatment assets...1/7/07 10 Water transport and ancillary assets: Boats, aluminium...1/7/07 15 Lifting assets...1/7/07 10 Outboard motors...1/7/07 5 Trailers...1/7/07 8 Weighing machines...1/7/07 5 Forestry and Logging Logging Plant: Cable system...1/1/01 8 Forwarders...1/1/01 8 Harvesters and feller bunchers...1/1/01 7 Log trailers...1/1/01 10 Mobile saws...1/1/01 8 Portable chain saws...1/1/01 2 Snigging plant...1/1/01 7 Fishing Fishing Plant: Boats...1/1/01 Fish holding baskets...1/1/01 10 Purse seine fishing net...1/1/01 5 MANUFACTURING Textile, Leather, Clothing and Footwear Manufacturing Boot and shoe making machinery: Machinery and general plant...1/1/01 Moulds for plastic heels...1/1/01 3 Vulcanising moulds...1/1/01 5 Clothing and millinery manufacturing plant: Hat manufacturing plant...1/1/01 Sewing machines...1/1/01 10 General plant...1/1/01 20 Cotton manufacturers' machinery: Conveyors...1/1/01 10 Engines, gas...1/1/01 20 Gas producer plant...1/1/01 Gins...1/1/01 10 Flock manufacturing plant: General plant...1/1/01 20 TAX IQ 2009 TAX RETURNS SPECIAL I 20 7 EFFECTIVE LIVES TABLE A (INDUSTRY CATEGORIES) Carding machines... 1/1/01 Knitting machines... 1/1/01 Rope and twine manufacturers' plant... 1/1/01 20 Tanners' plant: General plant... 1/1/01 20 Plant used in 'wet' process... 1/1/01 Weaving machinery (silk and cotton)... 1/1/01 Wool dumping machinery... 1/1/01 Wool scouring machinery... 1/1/01 1 Woollen manufacturers' machinery... 1/1/01 1 Log Sawmilling and Timber Dressing Saw milling equipment: Dry or planner mill plant: Generally... 1/1/01 10 Stacker... 1/1/01 15 Tray sorter... 1/1/01 15 Green mill plant: Edger line plant... 1/1/01 10 Heating plant... 1/1/01 15 Kiln drying plant: Generally... 1/1/01 10 Timber drying kilns and reconditioners... 1/1/01 15 Main saw line plant... 1/1/01 10 Sorter and trimming line plant: Generally... 1/1/01 10 Stackers... 1/1/01 15 Vertical bin sorters... 1/1/01 15 Log debarking plant... 1/1/01 10 Log, lumber and waste transfer equipment... 1/1/01 15 Log yard equipment: Fixed and mobile cranes... 1/1/01 12 Mobile equipment... 1/1/01 7 Watering systems... 1/1/01 15 Miscellaneous Plant: Generally... 1/1/01 10 Moisture meters... 1/1/01 3 Saw sharpening equipment... 1/1/01 10 Walkways... 1/1/01 15 Waste processing equipment: Bins waste, chip and fuel... 1/1/01 15 Chippers, shakers/screens and hoggers... 1/1/01 10 Plywood and Veneer Manufacturing Debarking assets... 1/1/05 15 Dry clipping assets... 1/1/05 25 Heating unit assets... 1/1/05 20 Glue mixing assets... 1/1/05 25 Lay-up and glue spreading assets... 1/1/05 25 Log conditioning, heating and steaming assets... 1/1/05 25 Log sizing assets... 1/1/05 20 Log yard assets (see log sawmilling and timber dressing) Materials handling assets... 1/1/05 20 Packaging assets... 1/1/05 20 Presses... 1/1/05 25 Sanding and finishing assets... 1/1/05 25 Sharpening assets... 1/1/05 30 Trimming and sawing assets... 1/1/05 25 Veneer composing, jointing and splicing assets... 1/1/05 20 Veneer dryers... 1/1/05 25 Veneer patching and grading assets... 1/1/05 20 Veneer peeling and slicing assets... 1/1/05 20 Veneer reconditioning assets... 1/1/05 25 Veneer sorting assets... 1/1/05 20 Wet clipping assets... 1/1/05 25 Other Wood Product Manufacturing Clothes peg manufacturing plant (wood)... 1/1/01 Case-making plant... 1/1/01