Section EE 16 — Income Tax Act 2007: Amount resulting from standard calculation

EE 16 Amount resulting from standard calculation Amount (1) For the purposes of the comparison of amounts required by section EE 14(1) , the amount dealt with in this section is calculated using the formula— annual rate × value or cost × months 12. Definition of items in formula (2) The items in the formula are defined in subsections (3) to (5). Annual rate (3) Annual rate is the annual rate that, in the income year, applies to the item of depreciable property under the depreciation method that the person uses for the item. It is expressed as a decimal. Value or cost (4) Value or cost is,— (a) when the person uses the diminishing value method, the item’s adjusted tax value at the end of the income year before the deduction of an amount of depreciation loss for the item for the income year: (b) when the person uses the straight-line method,— (i) for a patent or plant variety rights in relation to which the person has been allowed a deduction for an amount of depreciation loss for the relevant application, the item’s adjusted tax value at the start of the month in which the person acquires it: (ii) for other items, its cost to the person excluding expenditure for which the person is allowed a deduction under a provision of this Act outside this subpart: (c) for the purposes of paragraph (b), variations to cost are in sections EE 18 and EE 19 . Months: income year of normal length or shorter (5) Months , for a person whose income year contains 365 days or fewer, or 366 days or fewer in a leap year, is the lesser of the following: (a) 12; and (b) the number of whole or part calendar months in the income year in which— (i) the person owns the item; and (ii) the person uses the item or has it available for use for any purpose. Months: income year of longer than normal length (6) Months , for a person whose income year contains more than 365 days, or more than 366 days in a leap year, is the number of whole or part months in the income year in which— (a) the person owns the item; and (b) the person uses the item or has it available for use for any purpose. Months: patent applications (7) For the purposes of subsections (5) and (6), for a patent application, months refers to whole calendar months and whole months, as applicable. Defined in this Act: adjusted tax value , amount , annual rate , deduction , depreciable property , depreciation loss , depreciation method , diminishing value method , income year , own , plant variety rights , straight-line method , Compare: 2004 No 35 s EE 16