3D Printer Tax Depreciation Consultation
28th Jan 16
As technological innovation continues at a rapid pace, ADIA has lobbied for a simpler and accelerated depreciation regime for 3D printers used by dental laboratories. According to ADIA, appropriate treatment by the ATO of 3D printing technology will facilitate its adoption across the dental laboratory sector.
Key Issues For The Dental Industry —
In response to a request from the Australian Taxation Office (ATO), the Australian Dental Industry Association (ADIA) has provided advice on the tax treatment of 3D printers used in the dental laboratory sector. ADIA’s advice recommended simplified arrangements for the ATO to assess the effective life of 3D printers, providing practical depreciation arrangements for businesses that invest in this technology.
The dental product and broader medical technology sector has a track-record of pioneering the development and commercialisation of new technology, and 3D printing is an excellent example of this. By combining oral scanning, computer-aided design / computer-aided manufacturing design and 3D printing, dental laboratories can accurately and rapidly produce dental crowns, dental bridges and a range of orthodontic appliances. Importantly, the use of 3D printers in dental laboratories reduces reliance on highly skilled and high-cost labour, thus in the Australian context the adoption of 3D printing in dentistry has allowed the domestic dental laboratory sector to reestablish itself after having been severely affected as a result of work being sent to nations with lower labour costs.
In the ATO Commissioner’s schedule of effective life determinations to apply to assets purchased (or otherwise first used or installed ready-to-use) on or after 1 July 2016, a two-level determination had been proposed by the ATO for 3D printers, this being:
Desktop 3D printers – 3 Year Life; and
Others (Including support equipment for final product finishing) – 4 Year Life
With guidance from the ADIA-BAC Business Affairs Committee, ADIA advised the ATO that this two-level life creates ambiguity, resulting in increased compliance costs and red-tape for business.
ADIA commented that a determination based upon delineating a 3D printer as a desktop unit or otherwise is a less than ideal measure to determine the use and / or commercial value of the unit.
It is also noted that the ATO has proposed a four-year effective life determination of 3D printers other than desktop models. ADIA received advice that the rapid advances in 3D printing technology are, in some circumstances, likely to render newly acquired units obsolete within a four-year period thus this timeframe was considered excessively long in duration. ADIA instead proposed that a more reasonable timeframe would be:
A single entry in the schedule; and
The effective life be set at three years.
Beyond providing for ATO taxation treatment of 3D printers that aligns with contemporary business practice, ADIA’s suggested arrangements provide for lower business compliance costs that reflect the Australian Government’s commitment to red-tape reduction. Furthermore, implementation of ADIA’s suggested arrangements will encourage the adoption of innovative 3D printing technology in the healthcare manufacturing sector which reflects the objectives of the Australian Government’s Industry Innovation and Competitive Agenda.
Member Engagement —
ADIA provides leadership, strategy, advocacy and support. Our members set our agenda, fund our activities and directly benefit from the results. As the peak representative body for suppliers of quality dental products our services and advocacy agenda is by members in pursuit of a vibrant dental industry. ADIA's policy on workplace relations matters is determined by the ADIA-BAC Business Affairs Committee.
Currency of Information —
This update was issued on 21 January 2016 and please note that changes in circumstances after the publication of material or information may impact upon its accuracy and also change regulatory compliance obligations.
The statements, regulatory and technical information contained herein are believed to be accurate and are provided for information purposes only. Readers are responsible for assessing its relevance and verifying the accuracy of the content. To the fullest extent permitted by law, ADIA will not be liable for any loss, damage, cost or expense incurred in relation to or arising as a result of relying on the information presented here.
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