Chartered Accountants ANZ has lodged a joint submission with the Corporate Tax Association on TR 2019/D6 - Income tax: application of paragraph 8-1(2)(a) of the Income Tax Assessment Act 1997 to labour costs related to the construction or creation of capital assets.
The draft ruling explains when employee costs incurred by a business are treated as capital costs related to the construction of a capital asset, rather than being immediately deductible.
The submission identifies specific issues which require clarification in order to provide certainty and utility to any final ruling. Issues include:
- The treatment of supervisory and support staff salary and wage costs
- The treatment of on-costs of those specifically employed to construct capital assets
- Relevance of accounting treatment.
The submission was lodged on 14 February 2020.