| C2004C04596 | INCOME TAX (ARRANGEMENTS WITH THE STATES) ACT 1978 [Note: This Act is "repealed" by Act No. 73 of 1989]
(#DATE 31:07:1984)
- Reprinted as at 31 July 1984 *1* The Income Tax (Arrangements with the States) Act 1978 as shown in this reprint comprises Act No. 87, 1978 amended as indicated in the Tables below. Table of Acts ----------------------------------------------------------------------------- Application, saving or Number Date Date of transitional Act and year of Assent commencement provisions ----------------------------------------------------------------------------- Income Tax 87, 1978 22 June 22 June 1978 (Arrangements with 1978 the States) Act 1978 Income Tax Laws 149, 1979 28 Nov S. 24: 21 July - Amendment Act 1979 1979 1979 Remainder: Royal Assent ----------------------------------------------------------------------------- Table of Amendments ad. = added or inserted am. = amended rep. = repealed rs. = repealed and substituted ----------------------------------------------------------------------------- Provision affected How affected ----------------------------------------------------------------------------- S. 10 . . . . . . . . am. No. 149, 1979 S. 78 . . . . . . . . am. No. 149, 1979 ----------------------------------------------------------------------------- INCOME TAX (ARRANGEMENTS WITH THE STATES) ACT 1978 - TABLE OF PROVISIONS
TABLE
TABLE OF PROVISIONS
PART I-PRELIMINARY
Section
1. Short title
2. Commencement
3. Interpretation
PART II-REQUIREMENTS TO BE COMPLIED WITH BY STATE LAW
Division 1-Participating and Supporting States
4. Power of Treasurer to declare States to be participating or
supporting States
Division 2-Requirements in relation to Participating States
5. Requirements
6. Administration of State income tax laws
7. Liability to State income tax
8. Assessments
9. Penalty tax
10. Tax instalment deductions
11. Credits
12. Appeals
13. Assignment of right to receive and recover amounts of tax
Division 3-Requirements in relation to Participating States and
Supporting States
14. Requirements
15. Tax instalment deductions
PART III-AMENDMENTS OF INCOME TAX ASSESSMENT ACT
16. Principal Act
17-71. Amendments of the Income Tax Assessment Act 1936
PART IV-AMENDMENTS OF OTHER ACTS
72. Amendment of the Commonwealth Inscribed Stock Act 1911
73. Repeal of the Commonwealth Salaries Act 1907
74. Amendments of the States (Personal Income Tax Sharing) Act 1976
75. Amendment of the Income Tax (International Agreements) Act 1953
PART V-MISCELLANEOUS
76. Authority to perform functions under State law
77. Report by Commissioner in relation to State tax
78. Tax instalment deductions by certain employers
79. Payments to States
80. Audit
INCOME TAX (ARRANGEMENTS WITH THE STATES) ACT 1978 - LONG TITLE
SECT
An Act relating to the assessment and collection by the Commonwealth on behalf
of a State of personal income tax imposed by the State and the making of
payments by a State to the Commonwealth in partial discharge of the liability
of residents of that State in respect of Commonwealth personal income tax, and
for related purposes
INCOME TAX (ARRANGEMENTS WITH THE STATES) ACT 1978 - PART I
PART I-PRELIMINARY
INCOME TAX (ARRANGEMENTS WITH THE STATES) ACT 1978 - SECT 1
Short title
SECT
1. This Act may be cited as the Income Tax (Arrangements with the States)
Act 1978.*1*
SEE NOTES TO FIRST ARTICLE OF THIS CHAPTER .
INCOME TAX (ARRANGEMENTS WITH THE STATES) ACT 1978 - SECT 2
Commencement
SECT
2. This Act shall come into operation on the day on which it receives the
Royal Assent.*1*
SEE NOTES TO FIRST ARTICLE OF THIS CHAPTER .
INCOME TAX (ARRANGEMENTS WITH THE STATES) ACT 1978 - SECT 3
Interpretation
SECT
3. (1) In this Act (except in provisions inserted by this Act in another
Act), unless the contrary intention appears-
"assessment", in relation to a State income tax law, means the ascertainment
of the tax payable by a person under that law;
"Board of Review" means a Board referred to in Division 1 of Part V of the
Income Tax Assessment Act;
"employee" means a person who receives, or is entitled to receive, salary or
wages, and includes-
(a) a member of the Parliament of the Commonwealth or of a State;
(b) a person employed by the Commonwealth, by a State, by an authority
of the Commonwealth or by an authority of a State; and
(c) a member of the Defence Force;
"employer" means a person who pays, or is liable to pay, salary or wages,
and includes-
(a) in the case of an unincorporated body of persons other than a
partnership-the manager or other principal officer of that body; and
(b) in the case of a partnership-each partner,
and, in relation to a law of a State, includes that State and an authority
of that State;
"Government loan interest" means interest derived from bonds, debentures,
stock or other securities issued by the Government of the Commonwealth the
prospectuses for which were issued before 1 July 1976;
"Income Tax Assessment Act" means the Income Tax Assessment Act 1936;
"provisional tax" has the same meaning as in Division 3 of Part VI of the
Income Tax Assessment Act;
"salary or wages" has the same meaning as in Division 2 of Part VI of the
Income Tax Assessment Act;
"special rebate" means a rebate declared by the Treasurer under section 5 of
the States (Personal Income Tax Sharing) Act 1976*2* to be a special rebate
for the purposes of that Act;
"special surcharge" means any income tax specified in a declaration by the
Treasurer under section 5 of the States (Personal Income Tax Sharing) Act
1976*2* to the extent to which, or in the respect in which, it is declared to
be a special surcharge for the purposes of that Act;
"tax instalment deductions" means deductions from salary or wages made, or
required to be made, in pursuance of a provision of a State income tax law;
"the net income of a trust estate" has the same meaning as in Division 6 of
Part III of the Income Tax Assessment Act.
(2) Where in this Act (except in provisions inserted by this Act in another
Act) the expression "income tax law" is used in relation to a State or the
expression "State income tax law" is used, the expression shall be taken to
refer to-
(a) the provisions of the law of a State that provide for or in relation to
either or both of the following matters:
(i) the imposition and assessment of a tax upon incomes;
(ii) the making of payments by the State to the Commonwealth in partial
discharge of the liability of residents of the State for income tax;
(b) the provisions of the law of a State that provide for or in relation to
the collection of a tax upon incomes, including a tax imposed by the law of
another State or of an internal Territory; and
(c) the provisions of the law of a State that are referred to in
sub-section 10 (8), section 13 and sub-section 15 (4).
(3) Where in this Act (except in provisions inserted by this Act in another
Act) the expression "year of income" is used otherwise than in relation to a
taxpayer, the expression shall be taken to refer to a period of 12 months
ending on 30 June.
(4) Subject to this section, words and expressions used in this Act (except
in provisions inserted by this Act in another Act) that are defined by section
6 of the Income Tax Assessment Act have in this Act (except in such
provisions), unless the contrary intention appears, the same respective
meanings as those words and expressions have in the Income Tax Assessment Act.
*2* S. 3 (1), definitions of "special rebate" and "special surcharge"-The
States (Personal Income Tax Sharing) Act 1976 was repealed by the States (Tax
Sharing and Health Grants) Act 1981 (No. 99, 1981).
INCOME TAX (ARRANGEMENTS WITH THE STATES) ACT 1978 - PART II
PART II-REQUIREMENTS TO BE COMPLIED WITH BY STATE LAW
INCOME TAX (ARRANGEMENTS WITH THE STATES) ACT 1978 - DIVISION 1
Division 1-Participating and Supporting States
INCOME TAX (ARRANGEMENTS WITH THE STATES) ACT 1978 - SECT 4
Power of Treasurer to declare State to be participating or supporting States
SECT
4. (1) Where the Treasurer is satisfied that a State income tax law contains
provisions applicable in relation to a particular year of income that comply
with the requirements set out in Divisions 2 and 3, he shall cause to be
published in the Gazette a notice declaring that State to be a participating
State for the purposes of this Act in relation to that year of income.
(2) If at any time after the publication in the Gazette of a notice under
sub-section (1) in relation to a State in relation to a year of income the
Treasurer becomes satisfied that the law of that State no longer contains
provisions applicable in relation to that year of income that comply with the
requirements referred to in that sub-section, he may cause to be published in
the Gazette a notice revoking the first-mentioned notice.
(3) Subject to sub-section (4), a State shall be deemed at any relevant time
to be a participating State for the purposes of this Act in relation to a
particular year of income if, and only if, a notice under sub-section (1) in
relation to that State in relation to that year of income is in force at that
time.
(4) Notwithstanding sub-section (3), a State shall be deemed not to be a
participating State for the purposes of this Act in relation to a particular
year of income unless provisions of the State income tax law imposing a tax on
incomes of residents of the State and declaring the rate of that tax, or
providing for payments to the Commonwealth in partial discharge of the
liability of residents of the State for income tax and specifying the rate by
reference to which the payments are to be made, in relation to that year of
income come into operation on or before 30 April next preceding the
commencement of that year of income or come into operation on or before such
later date (if any), not being later than 30 November in that year of income,
as the Treasurer approves.
(5) Where the Treasurer is satisfied that the law of a State does not
contain provisions applicable in relation to a particular year of income that
comply with the requirements set out in Division 2 but contains provisions
that comply with the requirements set out in Division 3, he shall cause to be
published in the Gazette a notice declaring that State to be a supporting
State for the purposes of this Act in relation to that year of income.
(6) If at any time after the publication in the Gazette of a notice under
sub-section (5) in relation to a State in relation to a year of income the
Treasurer becomes satisfied that the law of that State no longer contains
provisions that comply with the requirements set out in Division 3, he may
cause to be published in the Gazette a notice revoking the first-mentioned
notice.
(7) A State shall be deemed at any relevant time to be a supporting State
for the purposes of this Act in relation to a particular year of income if at
that time the State is not a participating State in relation to that year of
income but a notice under sub-section (1) or (5) in relation to that State in
relation to that year of income is in force at that time.
(8) Notwithstanding anything contained in the Administrative Decisions
(Judicial Review) Act 1977, the Income Tax Assessment Act or any other law of
the Commonwealth or any law of a State or Territory-
(a) the validity of the making of an assessment or determination, the
serving of a notice or the doing of any other act or thing by the
Commissioner, a Second Commissioner, a Deputy Commissioner, a delegate of the
Commissioner or a Board of Review under a State income tax law shall not be
challenged or called in question, or made the subject of a declaration or a
declaratory order by a Court, on the ground that that law does not contain
provisions applicable in relation to the relevant year of income that comply
with requirements of Divisions 2 and 3; and
(b) the validity of the serving of a notice or the doing of any other act
or thing by the Commissioner, a Second Commissioner, a Deputy Commissioner or
a delegate of the Commissioner under the law of a State shall not be
challenged or called in question, or made the subject of a declaration or a
declaratory order by a Court, on the ground that that law does not contain
provisions applicable in relation to the relevant year of income that comply
with requirements of Division 3.
INCOME TAX (ARRANGEMENTS WITH THE STATES) ACT 1978 - DIVISION 2
Division 2-Requirements in relation to Participating States
INCOME TAX (ARRANGEMENTS WITH THE STATES) ACT 1978 - SECT 5
Requirements
SECT
5. The following provisions of this Division are requirements to be complied
with by a State income tax law if the State is to be declared to be a
participating State as mentioned in sub-section 4 (1).
INCOME TAX (ARRANGEMENTS WITH THE STATES) ACT 1978 - SECT 6
Administration of State income tax laws
SECT
6. The State income tax law shall, so far as practicable, confer on the
Commissioner (including a person acting in the office of Commissioner), on a
Second Commissioner (including a person acting in an office of Second
Commissioner) and on a Deputy Commissioner (including a person acting in an
office of Deputy Commissioner) all powers, functions and duties that are
necessary for the assessment and collection of taxes imposed, or for the
making of determinations, under that law and, in particular, confer on those
persons powers, functions and duties in the like circumstances as those in
which similar powers, functions and duties are conferred on those persons
under the Income Tax Assessment Act and shall permit the delegation by the
Commissioner to officers of the Australian Public Service of any powers,
functions or duties so conferred on him other than the power of delegation.
INCOME TAX (ARRANGEMENTS WITH THE STATES) ACT 1978 - SECT 7
Liability to State income tax
SECT
7. (1) The State income tax law shall provide-
(a) that any tax that is or may be imposed under that law shall be imposed
in respect of and only in respect of, and any payment by the State to the
Commonwealth that is or may be made under that law in partial discharge of the
liability of residents of the State for income tax shall be made by reference
to and only by reference to-
(i) the taxable income of the year of income of each natural person who
is a resident of that State in respect of that year of income;
(ii) in the case of each person in the capacity of a trustee of a trust
estate who is required to be assessed and liable to pay tax in pursuance of
section 98 of the Income Tax Assessment Act in respect of a share of the net
income of the trust estate of the year of income, being a share to which a
beneficiary who is a resident of the State in respect of that year of income
is presently entitled-that share of that net income;
(iii) in the case of each person in the capacity of a trustee of a trust
estate who is required to be assessed and liable to pay tax in pursuance of
section 99 or 99A of the Income Tax Assessment Act in respect of the whole or
a part of the net income of the trust estate of the year of income, being a
trust that resulted from the death of a person who, immediately before his
death, was a resident of the State-that net income, or that part of that net
income, as the case may be;
(iv) in the case of each person in the capacity of a trustee of a trust
estate who is required to be assessed and liable to pay tax in pursuance of
section 99 or 99A of the Income Tax Assessment Act in respect of the whole or
a part of the net income of the trust estate of the year of income, being a
trust-
(A) that did not result from the death of a person; and
(B) the administration of which in relation to that year of income
was wholly or mainly carried out in that State,
that net income, or that part of that net income, as the case may be;
and
(v) in the case of each person in the capacity of a trustee of a trust
estate who is required to be assessed and liable to pay tax in pursuance of
section 102 of the Income Tax Assessment Act in respect of the whole or a part
of the net income of the trust estate of the year of income, being a trust
created by a person who is a resident of the State in respect of the year of
income-that net income, or that part of that net income, as the case may be,
and shall be so imposed at, or made by reference to, a rate per dollar
that is a fixed proportion of the average rate of basic Commonwealth tax
payable on that taxable income or on the whole or part of that net income of
the trust estate, as the case may be, of that year of income;
(b) that, for the purposes of the State income tax law, a person shall be
deemed to be a resident of the State in respect of a year of income if, and
only if, that person was a resident of Australia for the purposes of the
Income Tax Assessment Act in respect of that year of income, otherwise than by
virtue of the operation of sub-section 7A (2) of that Act, and-
(i) his sole or principal place of residence in Australia at the
commencement of the last day of the year of income was in that State; or
(ii) in the case of a person who did not have a sole or principal place
of residence in Australia at the commencement of the last day of the year of
income-
(A) he was, at the commencement of the last day of the year of
income, domiciled in that State; or
(B) he was not, at the commencement of the last day of the year of
income, domiciled in Australia but, at the commencement of that day, he was,
having regard to his personal affairs, and to his business affairs or his
employment, more closely connected with that State than with any other State
or any internal Territory;
(c) that, in applying the provision of the State income tax law referred to
in paragraph (b), the last day of a year of income in relation to a person
shall-
(i) where the person ceased, on one or more occasions during the year
of income, to be a resident of Australia for the purposes of the Income Tax
Assessment Act-be taken to be the last day of the year of income that was a
day during which he was a resident of Australia for the purposes of that Act;
or
(ii) where the person died during the year of income and, at the date of
his death, was a resident of Australia for the purposes of that Act-be taken
to be the day on which he died;
(d) that, for the purposes of the State income tax law, a person who has
died shall be taken to have been a resident of the State immediately before
his death if he would, by virtue of the provisions of that law referred to in
paragraph (b) and sub-paragraph (c) (ii), be taken to be a resident of the
State in respect of the year of income in which he died;
(e) that, for the purposes of the State income tax law, "basic Commonwealth
tax", in relation to a person other than a person in the capacity of a trustee
of a trust estate, in relation to a year of income, means the amount of income
tax (not being additional tax (if any) payable under section 207 or section
226 of the Income Tax Assessment Act, health insurance levy payable under Part
VIIB of the Income Tax Assessment Act or special surcharge) that-
(i) in a case to which sub-paragraph (ii) does not apply-is payable by
that person under the Income Tax Assessment Act in respect of his taxable
income of the year of income after the allowance of any rebates (other than a
rebate of health insurance levy) but before the allowance of any credits to
which he is entitled; or
(ii) in a case where that person derived Government loan interest in the
year of income or in any year of income preceding the year of income-would be
payable by that person under the Income Tax Assessment Act in respect of his
taxable income of the year of income if he had not derived Government loan
interest in the year of income or in any preceding year of income, after the
allowance of any rebates (other than a rebate under section 160AB or a rebate
of health insurance levy) but before the allowance of any credits to which he
is entitled;
(f) that, for the purposes of the State income tax law, "basic Commonwealth
tax", in relation to a person in the capacity of a trustee of a trust estate,
in relation to a year of income, means the amount of income tax (not being
additional tax (if any) payable under section 207 or section 226 of the Income
Tax Assessment Act, health insurance levy payable under Part VIIB of the
Income Tax Assessment Act or special surcharge) that-
(i) in a case to which sub-paragraph (ii) does not apply-is payable by
that person under the Income Tax Assessment Act in respect of the net income
or the part of the net income, as the case may be, of the trust estate of the
year of income after the allowance of any rebates (other than a rebate of
health insurance levy) but before the allowance of any credits to which he is
entitled; or
(ii) in a case where the trust estate derived Government loan interest
in the year of income or in any year of income preceding the year of
income-would be payable by that person under the Income Tax Assessment Act in
respect of the net income or the part of the net income, as the case may be,
of the trust estate of the year of income if the trust estate had not derived
Government loan interest in the year of income or in any preceding year of
income, after the allowance of any rebates (other than a rebate under section
160AB or a rebate of health insurance levy) but before the allowance of any
credits to which he is entitled;
(g) that, in calculating the basic Commonwealth tax as mentioned in
paragraph (e)-
(i) a reference in that paragraph to a rebate shall, where in relation
to the year of income a special surcharge is payable or a special rebate is
allowable, be construed as a reference to the rebate (if any) to which the
person would have been entitled if that special surcharge had not been
payable, or that special rebate had not been allowable, as the case may be;
and
(ii) a reference in that paragraph to a credit shall, in the case of a
beneficiary who is under a legal disability, be construed as including a
reference to any amount deducted, in accordance with sub-section 100 (2) of
the Income Tax Assessment Act, from the income tax assessed in respect of that
beneficiary;
(h) that, in calculating the basic Commonwealth tax as mentioned in
paragraph (f), a reference in that paragraph to a rebate shall, where in
relation to the year of income a special surcharge is payable or a special
rebate is allowable, be construed as a reference to the rebate (if any) to
which the person would have been entitled if that special surcharge had not
been payable, or that special rebate had not been allowable, as the case may
be;
(j) that, for the purposes of the State income tax law, the average rate
of basic Commonwealth tax payable on a taxable income, or on the whole or part
of the net income of a trust estate, is the amount per dollar ascertained by
dividing the amount of that basic Commonwealth tax by the number of whole
dollars in that taxable income, or in, or in that part of, that net income, as
the case may be; and
(k) that, where the State makes any payment to the Commonwealth in partial
discharge of the liability of residents of the State for income tax, the State
will also make a payment to the Commonwealth of an amount agreed upon between
the Treasurer and the Treasurer of the State to reimburse the Commonwealth the
costs of administering the State income tax law.
(2) The provisions of a State income tax law shall not be taken not to
comply with the requirements set out in sub-section (1) by reason only that
that law does not provide for the making of a payment by the State to the
Commonwealth in partial discharge of the liability of a person in the capacity
of a trustee for income tax as mentioned in sub-paragraph (1) (a) (iv) in a
case where the Commissioner is of the opinion that the administration of the
trust was wholly or mainly carried out in that State for the purpose of
obtaining the benefit of such a payment.
INCOME TAX (ARRANGEMENTS WITH THE STATES) ACT 1978 - SECT 8
Assessments
SECT
8. The State income tax law-
(a) shall, subject to paragraph (b), contain provisions relating to-
(i) the making by the Commissioner of assessments (including amended
assessments) of tax payable under that law;
(ii) the making by the Commissioner of determinations (including amended
determinations) in respect of-
(A) entitlements of persons to the benefit of payments made under that
law by the State to the Commonwealth in partial discharge of the liability of
residents of the State for income tax; and
(B) entitlements of persons to credits under the provisions of that
law referred to in section 11;
(iii) the rights of persons to lodge objections with the Commissioner
against their assessments or against determinations of the Commissioner, of a
Second Commissioner or of a Deputy Commissioner, and to the determination of
those objections;
(iv) the review by Boards of Review of assessments and determinations,
and appeals to the Supreme Court of the State against assessments and
determinations, after decisions are given on such objections; and
(v) the imposition of a tax of a similar nature to provisional tax,
that are, as far as practicable, in substantially the same terms as the
corresponding provisions (if any) of the Income Tax Assessment Act;
(b) shall not give a person the right to lodge an objection against-
(i) his assessment for a year of income; or
(ii) any determination made by the Commissioner, a Second Commissioner
or a Deputy Commissioner,
in respect of any matter in respect of which the person is entitled to
lodge such an objection under the Income Tax Assessment Act;
(c) shall provide that, in any case where an assessment or determination
made in pursuance of the Income Tax Assessment Act is amended, any
consequential amendment of an assessment or determination made in pursuance of
the State income tax law will be made as soon as is practicable
notwithstanding the time that has elapsed since the original assessment or
determination was made under that law;
(d) shall provide for assessments, determinations, decisions and other
actions taken by the Commissioner, a Second Commissioner or a Deputy
Commissioner under that law to be final and binding subject to any review or
appeal instituted after a decision is given on an objection;
(e) shall provide an appropriate means of proving such assessments,
determinations, decisions and other actions; and
(f) shall provide that any review or appeal instituted under that law shall
not, in the meantime, interfere with or affect an assessment under that law
and that tax may be recovered on such an assessment as if no review or appeal
were pending.
INCOME TAX (ARRANGEMENTS WITH THE STATES) ACT 1978 - SECT 9
Penalty tax
SECT
9. The State income tax law shall provide that a person who-
(a) is required to pay additional tax under section 226 of the Income Tax
Assessment Act in respect of any year of income for which the person is
required to pay tax under that State income tax law; or
(b) is required to pay a penalty under section 221YDB of the Income Tax
Assessment Act in respect of his income of the year of income and had been
required to pay under that State income tax law in respect of the same year of
income a tax of a similar nature to provisional tax,
will also be required to pay under that State income tax law additional tax or
a penalty, as the case may be, equal to the further amount of additional tax
or penalty that he would have been required to pay under the Income Tax
Assessment Act if the tax imposed by that State income tax law or the tax of a
similar nature to provisional tax payable in respect of the estimated taxable
income under that law had been income tax or provisional tax, as the case may
be, payable under the Income Tax Assessment Act.
INCOME TAX (ARRANGEMENTS WITH THE STATES) ACT 1978 - SECT 10
Tax instalment deductions
SECT
10. (1) The State income tax law shall provide that, where income tax is
imposed by that law in respect of a year of income-
(a) every employer-
(i) that is a company incorporated in the State; or
(ii) who is a natural person and a resident of the State,
and pays in that year of income salary or wages in respect of a week or a
part of a week to an employee who is a resident of the State on the day when
the salary or wages is or are paid;
(b) the State or an authority of the State, when paying in that year of
income salary or wages in respect of a week or a part of a week to an employee
who is a resident of the State on the day when the salary or wages is or are
paid; and
(c) every other employer that-
(i) carries on business in the State and pays in that year of income
salary or wages in respect of a week or a part of a week to an employee who is
a resident of the State on the day when the salary or wages is or are paid;
(ii) pays in the State in that year of income salary or wages in respect
of a week or a part of a week to an employee who is a resident of the State on
the day when the salary or wages is or are paid; or
(iii) pays in that year of income salary or wages in respect of a week
or a part of a week for work done wholly or partly in the State to an employee
who is a resident of the State on the day when the salary or wages is or are
paid,
shall make deductions from the salary or wages at the rate prescribed in
relation to the State in relation to that year of income by regulations for
the time being in force under the Income Tax Assessment Act and shall deal
with the amounts deducted in the manner required by Division 2 of Part VI of
the Income Tax Assessment Act.
(2) The State income tax law shall provide that, where at a particular time
an employee receives from an employer salary or wages-
(a) the employee shall be deemed to receive from that employer at that time
the same amount in salary or wages as he is taken to receive at that time from
that employer for the purposes of section 221C of the Income Tax Assessment
Act;
(b) if the employee receives the salary or wages (including amounts that he
is deemed to receive) otherwise than in respect of a period of time-he shall
be deemed to receive the salary or wages from that employer in respect of the
same period of time as the period of time which he is deemed to be entitled to
receive the salary or wages from that employer for the purposes of that
section; and
(c) if the employee receives the salary or wages (including amounts that he
is deemed to receive) in respect of a period of time in excess of one week-he
shall be deemed to receive from that employer in respect of each week or part
of a week in that period the same amount in salary or wages as he is deemed to
be entitled to receive from that employer in respect of that week or part of a
week for the purposes of that section.
(3) The State income tax law shall, in relation to each year of income in
respect of which income tax is imposed by that law, provide that every
employee who, on a day when he is a resident of the State, is paid by a
prescribed employer salary or wages from which that employer is not required
by that law to make tax instalment deductions shall pay to the Commissioner,
within 28 days after that day, an amount equal to the tax instalment
deductions that that employer would have been required to make from the salary
or wages if that employer had been a natural person and a resident of the
State on the day on which the salary or wages is or are paid.
(4) The State income tax law shall, in relation to each year of income in
respect of which income tax is imposed by that law, provide that where-
(a) an employee who is paid an amount of salary or wages would, but for the
provisions contained in that law in accordance with this sub-section, be
required to pay an amount to the Commissioner in respect of the salary or
wages under the provisions of that law referred to in sub-section (3); and
(b) the employer who paid that amount of salary or wages to the employee
deducts from that amount of salary or wages the amount of the tax instalment
deductions that the employer would have been required to make from that amount
of salary or wages if the employer had been a natural person and a resident of
the State on the day on which the salary or wages is or are paid,
the employee is released from his liability to make that payment.
(5) The State income tax law shall provide that, for the purposes of the
application of a provision of that law referred to in sub-section (1) to an
employer who makes a payment of salary or wages to an employee-
(a) the employee shall be deemed to be a resident of the State on the day
on which the payment is made if the last notice given by the employee to that
employer in pursuance of section 221EB of the Income Tax Assessment Act before
that day stated that the employee was resident in the State; and
(b) if the employer is a natural person, he shall be deemed to be a
resident of the State on that day if at the commencement of that day his sole
or principal place of residence in Australia is in the State.
(6) The State income tax law shall provide that, for the purposes of the
application of a provision of that law referred to in sub-section (3) to an
employee, the employee shall be deemed to be a resident of the State on a
particular day if the last notice given by the employee to the employer in
pursuance of section 221EB of the Income Tax Assessment Act before that day
stated that the employee was resident in the State.
(7) For the purposes of this section, an employer who makes a payment of
salary or wages to an employee is a prescribed employer if-
(a) the employer is the Commonwealth or an authority of the Commonwealth or
is a Territory or an authority of a Territory;
(b) at the time when the payment is made the employer is a State that is a
participating State or a supporting State in relation to the year of income in
which the payment is made;
(c) the employer is an authority of such a State;
(d) the employer is a company incorporated in such a State or in a
Territory;
(e) the employer is a natural person whose sole or principal place of
residence in Australia and the Territories on the day on which the salary or
wages was or were paid was in such a State or in a Territory;
(f) the employer carried on business in such a State or in a Territory on
that day;
(g) the salary or wages was or were paid in such a State or in a Territory;
or
(h) the salary or wages was or were paid for work done wholly or partly in
such a State or in a Territory.
(8) The State income tax law shall contain-
(a) a provision assigning to the Commonwealth the right to receive payments
of, and to recover, any amounts that an employer deducts, or is required to
deduct, from salary or wages of an employee in accordance with the provision
of that law referred to in sub-section (1); and
(b) a provision assigning to the Commonwealth the right to receive payments
of, and to recover, any amounts that an employee is required to pay to the
Commissioner in accordance with the provision of that law referred to in
sub-section (3).
INCOME TAX (ARRANGEMENTS WITH THE STATES) ACT 1978 - SECT 11
Credits
SECT
11. (1) The State income tax law shall provide that, where-
(a) tax is imposed under that law in respect of income of a person of a
year of income; and
(b) the person has paid tax (in this section referred to as "foreign tax")
under the law of a country outside Australia, or under the laws of two or more
such countries, in respect of income, or part of the income, referred to in
paragraph (a) that was derived from a source or sources in the country
concerned,
the person will be entitled to a credit in respect of-
(c) if the person is entitled under the income tax law of the Commonwealth
to a credit in respect of part of the foreign tax, being a credit calculated
by reference to the total foreign tax-so much of the foreign tax as has not
been allowed or is not allowable as a credit under the income tax law of the
Commonwealth by reason that the foreign tax exceeded the income tax payable in
respect of the income or part of the income concerned; or
(d) if the person is entitled to a credit under the income tax law of the
Commonwealth in respect of part of the foreign tax, being a credit calculated
by reference to the foreign tax paid in respect of a particular class or
classes of income-so much of that part of the foreign tax as has not been
allowed or is not allowable as a credit under the income tax law of the
Commonwealth by reason that that part of the foreign tax exceeded the income
tax payable in respect of the class or classes of income concerned.
(2) The State income tax law may provide that a credit to which a person is
entitled under that law in respect of an amount of foreign tax paid in respect
of income of a year of income is not to exceed the amount of the tax payable
under that law in respect of that year of income that is attributable to
income in respect of which the foreign tax was imposed.
(3) A reference in this section to the income tax law of the Commonwealth
shall be construed as a reference to the Income Tax (International Agreements)
Act 1953 and the Income Tax Assessment Act.
INCOME TAX (ARRANGEMENTS WITH THE STATES) ACT 1978 - SECT 12
Appeals
SECT
12. (1) The State income tax law shall provide that-
(a) if a person has requested the Commissioner under the Income Tax
Assessment Act to treat an objection by him against an assessment (in this
paragraph referred to as the "Commonwealth assessment") under that Act in
respect of income of a year of income as an appeal and to forward it to the
Supreme Court of the State-
(i) the person is not entitled to request the Commissioner under the
State income tax law to refer to a Board of Review a decision on an objection
lodged by the person against an assessment or determination under that law in
respect of income of the same year of income, being an assessment or
determination notice of which was served on the person at the same time as
notice of the Commonwealth assessment was served on him; and
(ii) the person is not entitled to request the Commissioner to treat an
objection against such an assessment or determination under the State income
tax law as is mentioned in sub-paragraph (i) as an appeal and to forward it to
the Supreme Court of the State if the hearing of the appeal in respect of the
Commonwealth assessment has commenced;
(b) if a person has requested the Commissioner under the Income Tax
Assessment Act-
(i) to treat an objection by him against an assessment (in this
paragraph referred to as the "Commonwealth assessment") under that Act in
respect of income of a year of income as an appeal and to forward it to the
Supreme Court of another State or of a Territory; or
(ii) to refer to a Board of Review a decision by the Commissioner on an
assessment (in this paragraph also referred to as the "Commonwealth
assessment") under that Act in respect of income of a year of income,
the person is not entitled to request the Commissioner to treat as an
appeal an objection by him against an assessment or determination under the
State income tax law in respect of income of the same year of income, being an
assessment or determination notice of which was served at the same time as
notice of the Commonwealth assessment was served on him;
(c) if an appeal has been instituted by a person in the Supreme Court of
another State or of a Territory from a decision of a Board of Review on an
assessment of the person under the Income Tax Assessment Act in respect of
income of a year of income, no appeal to the Supreme Court of the
first-mentioned State may be instituted from a decision of a Board of Review
on an assessment or determination under the State income tax law in respect of
income of the person of the same year of income, being an assessment or
determination notice of which was served on the person at the same time as
notice of the assessment under the Income Tax Assessment Act was served on
him; and
(d) if at the request of a person other than the Commissioner a question of
law arising before a Board of Review on a reference to the Board from a
decision of the Commissioner on an objection lodged by the person against an
assessment under the Income Tax Assessment Act in respect of income of a year
of income is referred to a Court, and the Court to which the question is
referred is, with the agreement of that person, the Supreme Court of another
State or of a Territory, no reference at the request of that person to the
Supreme Court of the first-mentioned State may be made of a question of law
arising before a Board of Review on a reference to the Board from a decision
of the Commissioner on an objection lodged by the person against an assessment
or determination under the State income tax law in respect of income of the
same year of income, being an assessment or determination notice of which was
served on the person at the same time as notice of the assessment under the
Income Tax Assessment Act was served on him.
(2) In this section, "determination" means a determination in respect of the
entitlement of a person to the benefit of a payment made by a State to the
Commonwealth in partial discharge of the liability of residents of the State
for income tax.
INCOME TAX (ARRANGEMENTS WITH THE STATES) ACT 1978 - SECT 13
Assignment of right to receive and recover amounts of tax
SECT
13. The State income tax law shall contain a provision assigning to the
Commonwealth the right of the State to receive payments of, and to recover,
any tax in respect of which an assessment is made under that law, any tax of a
similar nature to provisional tax notice of which has been given under that
law and any additional tax (or tax of a similar nature to additional tax) or
penalty that a person is liable to pay to the Commissioner under a provision
of that law.
INCOME TAX (ARRANGEMENTS WITH THE STATES) ACT 1978 - DIVISION 3
Division 3-Requirements in relation to Participating States and
Supporting States
INCOME TAX (ARRANGEMENTS WITH THE STATES) ACT 1978 - SECT 14
Requirements
SECT
14. The provisions of section 15 are requirements to be complied with by the
law of a State if the State is to be declared to be a participating State as
mentioned in sub-section 4 (1) or is to be declared to be a supporting State
as mentioned in sub-section 4 (5).
INCOME TAX (ARRANGEMENTS WITH THE STATES) ACT 1978 - SECT 15
Tax instalment deductions
SECT
15. (1) The law of the State shall contain a provision that, where-
(a) an employer pays salary or wages to an employee;
(b) any one or more of the following provisions is or are applicable:
(i) the employer is the State or an authority of the State;
(ii) the employer is a company incorporated in the State;
(iii) the employer is a natural person whose sole or principal place of
residence in Australia on the day on which the salary or wages was or were
paid was in the State;
(iv) the employer carried on business in the State on that day;
(v) the salary or wages was or were paid in the State;
(vi) the salary or wages was or were paid for work done wholly or partly
in the State; and
(c) the employee is required by provisions of the law of another State
referred to in sub-section 10 (3) or provisions of the law of an internal
Territory corresponding with the provisions referred to in that sub-section to
pay to the Commissioner the amount (in this sub-section referred to as the
"relevant amount") of the tax instalment deductions that the employer would
have been required by the law of that other State or the law of that Territory
to make from the salary or wages if the employer had been a natural person and
a resident of that other State or of that Territory, as the case may be, on
that day,
the employer shall, subject to the provisions contained in the law of the
first-mentioned State in accordance with sub-section (3) of this section,
deduct from the salary or wages an amount equal to the relevant amount and
shall deal with the amount so deducted in the manner required by Division 2 of
Part VI of the Income Tax Assessment Act.
(2) The State income tax law shall contain a provision that, for the
purposes of the application of the provision contained in that law in
accordance with sub-section (1), an employer shall treat an employee to whom
the employer pays salary or wages as being required by provisions of the law
of another State referred to in sub-section 10 (3) or by provisions of the law
of an internal Territory corresponding with the provisions referred to in
sub-section 10 (3) to pay to the Commissioner the amount of the tax instalment
deductions that the employer would have been required to make from the salary
or wages by the law of that other State or the law of that Territory if the
employer had been a natural person and a resident of that other State or of
that Territory, as the case may be, on that day, if the last notice given by
the employee to the employer in pursuance of section 221EB of the Income Tax
Assessment Act before the day on which the salary or wages was or were paid
stated that the employee was resident in that other State or in that
Territory, as the case may be, and-
(a) if the notice stated that the employee was resident in that other
State-that other State is a participating State in relation to the year of
income in which the salary or wages was or were paid and the law of that other
State imposed a tax on the income of residents of that State of that year of
income; or
(b) if the notice stated that the employee was resident in that
Territory-the law of that Territory imposed a tax on the income of residents
of that Territory of the year of income in which the salary or wages was or
were paid.
(3) The law of the State shall contain a provision that an employer is not
required by the provision of that law referred to in sub-section (1) to deduct
an amount from the salary or wages payable to an employee in respect of tax
imposed by the law of another State or of an internal Territory if the
employer-
(a) is required by section 78 of this Act or by the law of that other State
or of that internal Territory to make a deduction from that salary or those
wages in respect of that tax; or
(b) not being required to make a deduction from that salary or those wages
as mentioned in paragraph (a), makes a deduction from that salary or those
wages in respect of that tax in purported pursuance of a provision of the law
of a State or internal Territory other than the State or internal Territory by
the law of which that tax is imposed.
(4) The law of the State shall contain a provision assigning to the
Commonwealth the right to receive payments of, and to recover, any amounts
that an employer deducts, or is required to deduct, from salary or wages of an
employee in accordance with the provision of that law referred to in
sub-section (1).
INCOME TAX (ARRANGEMENTS WITH THE STATES) ACT 1978 - PART III
PART III-AMENDMENTS OF INCOME TAX ASSESSMENT ACT
INCOME TAX (ARRANGEMENTS WITH THE STATES) ACT 1978 - SECT 16
Principal Act
SECT
16. The Income Tax Assessment Act 1936 is in this Part referred to as the
Principal Act.
INCOME TAX (ARRANGEMENTS WITH THE STATES) ACT 1978 - SECT 17-71
Amendments of the Income Tax Assessment Act 1936
SECT
17-71.*3* * * * * * * *
*3* Ss. 17-71-The amendments made by sections 17-71 have been incorporated in
the reprint of the Income Tax Assessment Act 1936 which is published
separately.
INCOME TAX (ARRANGEMENTS WITH THE STATES) ACT 1978 - PART IV
PART IV-AMENDMENTS OF OTHER ACTS
INCOME TAX (ARRANGEMENTS WITH THE STATES) ACT 1978 - SECT 72
Amendment of the Commonwealth Inscribed Stock Act 1911
SECT
72.*4* * * * * * * *
*4* S. 72-The amendment made by section 72 has been incorporated in the
reprint of the Commonwealth Inscribed Stock Act 1911 which is published
separately.
INCOME TAX (ARRANGEMENTS WITH THE STATES) ACT 1978 - SECT 73
Repeal of the Commonwealth Salaries Act 1907
SECT
73. The Commonwealth Salaries Act 1907 is repealed.
INCOME TAX (ARRANGEMENTS WITH THE STATES) ACT 1978 - SECT 74
Amendments of the States (Personal Income Tax Sharing) Act 1976
SECT
74.*5* * * * * * * *
*5* S. 74-The amendments made by section 74 were amendments to the States
(Personal Income Tax Sharing) Act 1976 which has since been repealed by the
States (Tax Sharing and Health Grants) Act 1981 (No. 99, 1981).
INCOME TAX (ARRANGEMENTS WITH THE STATES) ACT 1978 - SECT 75
Amendment of the Income Tax (International Agreements) Act 1953
SECT
75.*6* * * * * * * *
*6* S. 75-The amendment made by section 75 has been incorporated in the
reprint of the Income Tax (International Agreements) Act 1953 which is
published separately.
INCOME TAX (ARRANGEMENTS WITH THE STATES) ACT 1978 - PART V
PART V-MISCELLANEOUS
INCOME TAX (ARRANGEMENTS WITH THE STATES) ACT 1978 - SECT 76
Authority to perform functions under State law
SECT
76. (1) The Commissioner, a Second Commissioner, a Deputy Commissioner, a
delegate of the Commissioner or a Board of Review is authorized to exercise
powers and perform functions conferred on him or it under the income tax law
of a State that is a participating State in relation to the relevant year of
income.
(2) The Commissioner, a Second Commissioner, a Deputy Commissioner or a
delegate of the Commissioner is authorized to exercise powers and perform
functions conferred on him under the law of a State that is a supporting State
in relation to the relevant year of income, being powers and functions in
relation to the provisions of that law referred to in section 15 of this Act.
INCOME TAX (ARRANGEMENTS WITH THE STATES) ACT 1978 - SECT 77
Report by Commissioner in relation to State tax
SECT
77. (1) The Treasurer may direct the Commissioner to furnish to him, for
transmission to the appropriate Minister of the Crown of a State that is a
participating State in relation to a year of income, a report, in relation to
that year of income, on the working of this Act in relation to the State
income tax law and, where such a direction is given, the Commissioner shall
furnish the report as soon as practicable after the end of that year of
income.
(2) Except to the extent that he is required to do so by a direction given
by the Treasurer under sub-section (1) or for the purpose of complying with
section 14 of the Income Tax Assessment Act, neither the Commissioner nor any
other person referred to in section 6 of this Act shall be required to furnish
any information on the working of a State income tax law or on the working of
this Act in relation to a State income tax law.
INCOME TAX (ARRANGEMENTS WITH THE STATES) ACT 1978 - SECT 78
Tax instalment deductions by certain employers
SECT
78. (1) Where-
(a) an employer pays salary or wages to an employee;
(b) any one or more of the following sub-paragraphs is or are applicable:
(i) the employer is the Commonwealth or an authority of the
Commonwealth or is a Territory or an authority of a Territory;
(ii) the employer is a company incorporated in a Territory;
(iii) the employer is a natural person whose sole or principal place of
residence in Australia and the Territories on the day on which the salary or
wages was or were paid was in a Territory;
(iv) the employer carried on business in a Territory on that day;
(v) the salary or wages was or were paid in a Territory;
(vi) the salary or wages was or were paid for work done wholly or partly
in a Territory; and
(c) the employee is required by provisions of the law of a State referred
to in sub-section 10 (3) to pay to the Commissioner the amount (in this
sub-section referred to as the "relevant amount") of the tax instalment
deductions that the employer would have been required by the law of that State
to make from the salary or wages if the employer had been a natural person and
a resident of that State on the day on which the salary or wages was or were
paid,
the employer shall deduct from the salary or wages an amount equal to the
relevant amount and shall deal with the amount so deducted in the manner
required by Division 2 of Part VI of the Income Tax Assessment Act.
Penalty: $40.
(2) For the purposes of the application of sub-section (1), an employer
shall treat an employee to whom the employer pays salary or wages as being
required by provisions of the law of a State referred to in sub-section 10 (3)
to pay to the Commissioner the amount of the tax instalment deductions that
the employer would have been required to make from the salary or wages by the
law of that State if the employer had been a natural person and a resident of
that State on the day on which the salary or wages was or were paid, if-
(a) the last notice given by the employee to the employer in pursuance of
section 221EB of the Income Tax Assessment Act before the day on which the
salary or wages was or were paid stated that the employee was resident in that
State; and
(b) at the time when the payment is made that State is a participating
State in relation to the year of income in which the salary or wages was or
were paid and the law of that State imposed a tax on the income of residents
of that State of that year of income.
(3) Where an employer, in purported compliance with a requirement of
Division 2 of Part VI of the Income Tax Assessment Act or a requirement of
sub-section (1) of this section, or both, makes a deduction or deductions from
salary or wages that he pays to an employee and the amount of the deduction,
or the sum of the amounts of the deductions, is less than the sum of the
amount of the deduction that he is required to make from the salary or wages
under that Division and the amount of the deduction that he is required to
make from the salary or wages under sub-section (1) of this section, then-
(a) if the amount of the deduction, or the sum of the amounts of the
deductions, made by the employer did not exceed the amount that he was
required to deduct under that Division-the employer shall be deemed not to
have deducted any amount under this section from the salary or wages; or
(b) in any other case-the employer shall be deemed to have deducted under
this section from the salary or wages the amount by which the amount of the
deduction, or the sum of the amounts of the deductions, made by him exceeds
the amount that he was required to deduct under that Division.
INCOME TAX (ARRANGEMENTS WITH THE STATES) ACT 1978 - SECT 79
Payments to States
SECT
79. (1) This section applies in respect of a participating State in relation
to each financial year in respect of which a tax is imposed by the law of the
State on incomes of residents of the State and in relation to each subsequent
year.
(2) The Commissioner shall, whenever requested to do so by the Treasurer in
relation to a period, being a financial year in relation to which this section
applies in respect of a participating State, or being a part of such a
financial year, calculate the net collections, in relation to that period, of
income tax imposed by the law of that State.
(3) For the purposes of sub-section (2), the net collections, in relation to
a period, of income tax imposed by the law of a State shall be taken to be the
difference between-
(a) the amount that would, in his opinion, be the net personal income tax
collections for that period within the meaning of the States (Personal Income
Tax Sharing) Act 1976 if-
(i) that period were a year to which that Act applied; and
(ii) where the law of another State provided for the making of payments
by that other State to the Commonwealth in partial discharge of the liability
of residents of that other State for income tax in respect of the financial
year in which that period occurred or any previous financial year-the law of
that other State had not provided for the making of those payments; and
(b) the amount that would, in his opinion, have been the amount referred to
in paragraph (a) if the law of the State had not imposed a tax on the incomes
of residents of the State of the financial year in which that period occurred
or any previous financial year.
(4) Where the Commissioner calculates under sub-section (2) the net
collections, in relation to a period, of income tax imposed by the law of a
State, there is payable to the State the amount so calculated after deducting
an amount agreed upon between the Treasurer and the Treasurer of the State,
being a deduction made to reimburse the Commonwealth the costs of
administering the State income tax law.
(5) In the case of a financial year in relation to which this section
applies in respect of a participating State other than New South Wales or
Victoria, the Commonwealth Grants Commission shall assess an amount to be paid
to the State by way of equalization assistance, being an amount estimated by
that Commission to be the amount that would bring the per capita yield from
the income tax imposed by the law of that State in respect of that financial
year up to the amount which, if the laws of New South Wales and Victoria
imposed taxes on incomes of residents of those States in respect of that
financial year at the rate at which tax was imposed by the law of the
first-mentioned State, would be the average per capita yield from those taxes.
(6) The Treasurer may make advances to a State of portions of any amount or
amounts to which it appears to him the State will be entitled under this
section in respect of a financial year.
(7) Payments (including advances) under this section shall be made out of
the Consolidated Revenue Fund, which is appropriated accordingly.
INCOME TAX (ARRANGEMENTS WITH THE STATES) ACT 1978 - SECT 80
Audit
SECT
80. The receipt by the Commissioner of moneys paid to or recovered by him in
pursuance of, or in pursuance of an assignment made by, a State income tax law
or the provisions of the law of a State referred to in sub-section 15 (4) or
in pursuance of section 78, and the payment of any moneys to a State under
section 79, are subject to audit by the Auditor-General for the Commonwealth
and are not subject to audit by any person on behalf of a State.
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