Taxation of live stock in Australia: A critical review of tax law and policy

Document Type

Journal Article

Publication Title

Australian Tax Review Update


Thomson Reuters


School of Business and Law




Allen, C. (2020). Taxation of live stock in Australia: A critical review of tax law and policy. Australian Tax Review Update, 49(3), 209-233. http://sites.thomsonreuters.com.au/journals/2020/10/19/australian-tax-review-update-vol-49-pt-3/


One of the fundamental aims of any income tax system is to measure the net income earned by taxpayers during a given financial year. This can be difficult for primary production businesses involving live animals because animals are inherently different from other kinds of assets. Whereas previously Australia’s tax system allowed primary producers to use either a market valuation or cost-based valuation to assess the value of their animals, the Income Tax Assessment Act 1997 (Cth) introduced changes that brought live animals under the rules for ordinary trading stock. This article offers a critique of the policies embodied in the Act and its approach to taxing animals in primary production. In particular, it highlights the outdated prescribed values given to live stock acquired through natural increase (ie offspring) and biased tax concessions that apply to certain types of animals. These tax rules have not been reviewed in decades and urgently need to be reassessed.

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