The Australian Taxation Office (ATO) has registered the Income Tax Assessment (Effective Life of Depreciating Assets) Determination 2025 (“the Determination”), which sets out the effective life of various depreciating assets determined by the ATO.

The effective life of a depreciating asset is used to calculate its decline in value (depreciation) for income tax purposes. Under Division 40 of the Income Tax Assessment Act 1997 (ITAA 1997), a deduction may be available for the asset’s decline in value, to the extent that it is used for a taxable purpose.

Taxpayers may either:

      Use the ATO-determined effective life for the asset, as specified in the Determination; or

      Self-assess the asset’s effective life in accordance with section 40-105 of the ITAA 1997.

The new Determination repeals and replaces the Income Tax (Effective Life of Depreciating Assets) Determination 2015, which was due to sunset on 1 October 2025. The new instrument maintains the same substantive effect as the 2015 Determination.

The effective lives of ATO-determined depreciating assets are outlined in Schedule 2 to the Determination:

      Table A lists the effective life of depreciating assets used in specific industries.

      Table B lists depreciating assets that can be used by any taxpayer.

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(Source: Information extract from The NTAA's October 2025 Tax Advisers' Voice)