Document ID: chunk:federal_register_of_legislation:C2025C00029:section:6:p21
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 6 (pt 21/24)
Character Range: 1079189–1081680

which you incur it if:
 (a) the expenditure is incurred in relation to a business that is proposed to be carried on; and
 (b) the expenditure is incurred:
 (i) in obtaining advice or services relating to the proposed structure, or proposed operation of the business; or
 (ii) in payment to an *Australian government agency of fees, taxes or charges relating to establishing the business or its operating structure; and
 (c) you are a *small business entity, or an entity covered by subsection (2B), for the income year, or both of the following apply:
 (i) you are not carrying on a *business in the income year;
 (ii) you are not *connected with, or an *affiliate of, another entity that carries on a business in the income year and that is neither a small business entity, nor an entity covered by subsection (2B), for the income year.
 (2B) An entity is covered by this subsection for an income year if:
 (a) the entity is not a *small business entity for the income year; and
 (b) the entity would be a small business entity for the income year if:
 (i) each reference in Subdivision 328‑C (about what is a small business entity) to $10 million were instead a reference to $50 million; and
 (ii) the reference in paragraph 328‑110(5)(b) to a small business entity were instead a reference to an entity covered by this subsection.

Limitations and exceptions
 (3) You can only deduct the expenditure, for a *business that you carry on, used to carry on or propose to carry on, to the extent that the business is carried on, was carried on or is proposed to be carried on for a *taxable purpose.
 (4) You can only deduct the expenditure, for a *business that another entity used to carry on or proposes to carry on, to the extent that:
 (a) the business was carried on or is proposed to be carried on for a *taxable purpose; and
 (b) the expenditure is in connection with:
 (i) your deriving assessable income from the business; and
 (ii) the business that was carried on or is proposed to be carried on.
 (5) You cannot deduct anything under this section for an amount of expenditure you incur to the extent that:
 (a) it forms part of the *cost of a *depreciating asset that you *hold, used to hold or will hold; or
 (b) you can deduct an amount for it under a provision of this Act other than this section; or
 (c) it forms part of the cost of land; or
 (d) it is in relation to a lease or other legal or equitable right; or
 (e) it would, apart from this section, be taken into account