Taxation Laws Amendment Act 1986 (Cth)
This compilation was prepared on 13 September 2010
taking into account amendments up to Act No. 75 of 2010
The text of any of those amendments not in force
on that date is appended in the Notes section
The operation of amendments that have been incorporated may be
affected by application provisions that are set out in the Notes section
Prepared by the Office of Legislative Drafting and Publishing,
Attorney-General’s Department, Canberra
TABLE OF PROVISIONS
Section
1. Short title [
2. Commencement [
11. Insertion of new Subdivision -
82KZC. Interpretation
82KZD. Limitation on deductions for rental property loan
interest
82KZE. Carry forward of excess rental property loan interest
82KZF. Transfer of excess rental property loan interest within
company group
82KZG. Special provision relating to partnerships
82KZH. Deemed acquisition of property
82KZJ. When property acquired
14. Certain income transferred for short periods to be included in assessable income
15. Insertion of new section -
102CA. Consideration in respect of transfer to be included in
assessable income of transferor in certain cases
19. Insertion of new section -
169A. Reliance by Commissioner on return
21. Insertion of new section -
170AA. Payment of interest by taxpayer where assessment amended
PART III - AMENDMENTS OF THE INCOME TAX (INTERNATIONAL AGREEMENTS) ACT
28. Interpretation
29. Insertion of new section -
11Q. Airline profits agreement with the People's Republic of China
PART IV - AMENDMENTS OF THE PAY-ROLL TAX (TERRITORIES) ASSESSMENT ACT
37. Insertion of new Part -
PART IVA - GROUPING PROVISIONS
21A. Interpretation
21B. Grouping of corporations
21C. Grouping where employees used in another business
21D. Grouping of commonly controlled businesses
21E. Smaller groups subsumed into larger groups
21F. Exclusion of persons from groups
21G. Designated group employer
21H. Nominated deduction
21J. Annual adjustments
21K. Part-year adjustments
PART VI - AMENDMENTS OF THE TAXATION (INTEREST ON OVERPAYMENTS) ACT
SCHEDULE
SCHEDULE TO BE ADDED AT END OF INCOME TAX (INTERNATIONAL AGREEMENTS) ACT 1953
TAXATION LAWS AMENDMENT ACT 1986No. 46, 1986 - LONG TITLE
An Act to amend the law relating to taxation
TAXATION LAWS AMENDMENT ACT 1986No. 46, 1986
- SECT 1
Short title [
1. This Act may be cited as the Taxation Laws Amendment Act 1986.
TAXATION LAWS AMENDMENT ACT 1986No. 46, 1986
- SECT 2
Commencement [
2. (1) Subject to this section, this Act shall come into operation on the
day on which it receives the Royal Assent.
(2) Part IV shall come into operation on the first day of the month next
following the month in which this Act receives the Royal Assent.
(3) Part V shall be deemed to have come into operation on 28 October 1985.
TAXATION LAWS AMENDMENT ACT 1986No. 46, 1986
- SECT 3
Principal Act
3. The Income Tax Assessment Act 1936*1* is in this Part referred to as the
Principal Act.
*1* No. 27, 1936, as amended. For previous amendments, see No. 88, 1936; No.
5, 1937; No. 46, 1938; No. 30, 1939; Nos. 17 and 65, 1940; Nos. 58 and 69,
1941; Nos. 22 and 50, 1942; No. 10, 1943; Nos. 3 and 28, 1944; Nos. 4 and 37,
1945; No. 6, 1946; Nos. 11 and 63, 1947; No. 44, 1948; No. 66, 1949; No. 48,
1950; No. 44, 1951; Nos. 4, 28 and 90, 1952; Nos. 1, 28, 45 and 81, 1953; No.
43, 1954; Nos. 18 and 62, 1955; Nos. 25, 30 and 101, 1956; Nos. 39 and 65,
1957; No. 55, 1958; Nos. 12, 70 and 85, 1959; Nos. 17, 18, 58 and 108, 1960;
Nos. 17, 27 and 94, 1961; Nos. 39 and 98, 1962; Nos. 34 and 69, 1963; Nos. 46,
68, 110 and 115, 1964; Nos. 33, 103 and 143, 1965; Nos. 50 and 83, 1966; Nos.
19, 38, 76 and 85, 1967; Nos. 4, 60, 70, 87 and 148, 1968; Nos. 18, 93 and
101, 1969; No. 87, 1970; Nos. 6, 54 and 93, 1971; Nos. 5, 46, 47, 65 and 85,
1972; Nos. 51, 52, 53, 164 and 165, 1973; No. 216, 1973 (as amended by No. 20,
1974); Nos. 26 and 126, 1974; Nos. 80 and 117, 1975; Nos. 50, 53, 56, 98, 143,
165 and 205, 1976; Nos. 57, 126 and 127, 1977; Nos. 36, 57, 87, 90, 123, 171
and 172, 1978; Nos. 12, 19, 27, 43, 62, 146, 147 and 149, 1979; Nos. 19, 24,
57, 58, 124, 133, 134 and 159, 1980; Nos. 61, 92, 108, 109, 110, 111, 154 and
175, 1981; Nos. 29, 38, 39, 76, 80, 106 and 123, 1982; Nos. 14, 25, 39, 49,
51, 54 and 103, 1983; Nos. 14, 42, 47, 63, 76, 115, 124, 165 and 174, 1984;
No. 123, 1984 (as amended by No. 65, 1985); Nos. 47, 49, 104, 123, 129, 168,
173 and 174, 1985; and No. 41, 1986.
TAXATION LAWS AMENDMENT ACT 1986No. 46, 1986
- SECT 4
Officers to observe secrecy
4. Section 16 of the Principal Act is amended by omitting from sub-paragraph
(4FB) (c) (i) "on" and substituting "or".
TAXATION LAWS AMENDMENT ACT 1986No. 46, 1986
- SECT 5
Dividends
5. Section 44 of the Principal Act is amended by omitting sub-section (2e).
TAXATION LAWS AMENDMENT ACT 1986No. 46, 1986
- SECT 6
Rebate on dividends
6. Section 46 of the Principal Act is amended by omitting sub-section (5).
TAXATION LAWS AMENDMENT ACT 1986No. 46, 1986
- SECT 7
Rebate on dividends paid as part of dividend stripping operation
7. Section 46a of the Principal Act is amended by omitting paragraph (14)
(a).
TAXATION LAWS AMENDMENT ACT 1986No. 46, 1986
- SECT 8
Rebate not allowable in certain circumstances
8. Section 46b of the Principal Act is amended by omitting sub-section (9)
and substituting the following sub-section:
"(9) Notwithstanding anything in any other provision of this Act, the
Commissioner may at any time amend an assessment for the purpose of taking
into account an acquisition of shares or a beneficial interest in a trust
estate by a person that, by virtue of sub-section (4), is deemed to have taken
place before the end of the year of income to which the assessment relates,
but nothing in this sub-section limits the power of the Commissioner to amend
an assessment in accordance with any other provision of this Act.".
TAXATION LAWS AMENDMENT ACT 1986No. 46, 1986
- SECT 9
Losses and outgoings
9. Section 51 of the Principal Act is amended by adding at the end the
following sub-section:
"(5) A deduction is not allowable under sub-section (1) in respect of an
amount of interest payable under section 170aa.".
TAXATION LAWS AMENDMENT ACT 1986No. 46, 1986
- SECT 10
Gifts, pensions, &c.
10. Section 78 of the Principal Act is amended by inserting after
sub-paragraph (1) (a) (lxxxiii) the following sub-paragraph:
"; (lxxxiv) the Australian Sports Aid Foundation,".
TAXATION LAWS AMENDMENT ACT 1986No. 46, 1986
- SECT 11
11. After section 82KZB of the Principal Act the following Subdivision is
inserted in Division 3 of Part III:
"Subdivision G-Limitation on deductions for interest on money borrowed to
finance rental property investments
Interpretation
"82KZC. (1) In this Subdivision, unless the contrary intention appears-
'commencement date' means 17 July 1985;
'company title interest', in relation to land, means a right of occupancy of
the land, or of a building or part of a building erected on the land, arising
by virtue of the holding of shares, or by virtue of a contract to purchase
shares, in a company that owns the land or building;
'eligible rental property deductions', in relation to the taxpayer in
relation to a year of income, means-
deductions allowed or allowable to the taxpayer in the year of
income
that relate exclusively to rental property income of the taxpayer;
rental property partnership deductions allowed or allowable to the
taxpayer in the year of income; and
so much of any other deductions allowed or allowable to the taxpayer
in the year of income as, in the opinion of the Commissioner, may
appropriately be related to rental property income of the taxpayer,
but does not include-
deductions allowed or allowable, or that would, but for this
Subdivision, be allowed or allowable, to the taxpayer in the year of income
under section 51 in respect of rental property loan interest; or
deductions allowed or allowable to the taxpayer in the year of income
under Division 10C or 10D;
'exempt residential land', in relation to a person, means land that is used
by the person for the provision of residential accommodation as mentioned in-
paragraph (a) of the definition of 'housing and welfare' in
sub-section 122 (1);
paragraph 124AA (2) (c); or
paragraph 124JA (1) (a);
'improvement', in relation to land, includes the construction or extension
of, or the making of an alteration, improvement or addition to, a building or
other structure on the land;
'interest', in relation to borrowed money, includes a payment in the nature
of interest;
'interest', in relation to land, means-
a legal or equitable estate or interest (including a leasehold
interest) in the land;
a company title interest in the land; or
a right to receive income from the land,
but, except in the definitions of 'majority underlying interests', 'net
value' and 'underlying interest', sub-sections (6) and (8) and sections 82KZH
and 82KZJ, does not include-
a beneficial interest of a beneficiary of a trust estate; or
an interest of a partner in partnership property;
'interest in a partnership' includes an interest in a partnership held
otherwise than as a partner;
'lease' includes sub-lease and, in relation to a company title interest in
land, includes an agreement similar to a lease or sub-lease;
'loan' includes the provision of credit or any other form of financial
accommodation and 'borrowed' has a corresponding meaning;
'majority underlying interests', in relation to property, means more than
one-half of-
the beneficial interests held by natural persons (whether directly or
through one or more interposed companies, partnerships or trusts) in the
property; and
the beneficial interests held by natural persons (whether directly or
through one or more interposed companies, partnerships or trusts) in any
income that may be derived from the property;
'natural person' does not include a natural person in the capacity of trustee;
'net rental value', in relation to an interest in land that is used at the
end of a year of income for rent producing purposes, means so much of the net
value of the interest as the Commissioner considers appropriate having regard
to the extent to which the land was so used at the end of the year of income;
'net value', in relation to an interest held by a person in land, means the
value of the interest as reduced by so much of the liabilities of the person
or of any interposed company, partnership or trust that holds an interest in
the land as, in the opinion of the Commissioner, may appropriately be related
to that first-mentioned interest;
'net worth', in relation to a company, partnership or trust estate, means
the total value of the assets of the company, partnership or trust estate as
reduced by the total liabilities of the company, partnership or trust estate;
'partner's portion', in relation to an amount (in this definition referred
to as the 'full amount') in relation to a partner in relation to a year of
income, means-
so much of the full amount as the partners have agreed is to be
allocated to that partner; or
if the partners have not agreed as to the part of the full amount
that is to be allocated to that partner, the amount
calculated in accordance with the formula AB, where-
is the full amount;
is the individual interest of that partner in the net income of the
partnership of the year of income or in the partnership loss for the year of
income, as the case requires; and
is the net income of the partnership of the year of income or the
partnership loss for the year of income, as the case requires;
'post commencement date improvement', in relation to land, means an
improvement to the land (whether or not any expenditure was incurred in making
the improvement) except where-
the making of the improvement commenced on or before the commencement
date;
the improvement was made pursuant to a contract entered into on or
before the commencement date; or
the following conditions are satisfied:
(i) money was borrowed and used by a person to make the improvement;
(ii) all money so borrowed and used was borrowed under a contract or
contracts entered into on or before the commencement date;
(iii) the person-
(A) held an interest in the land at the end of the commencement
date; or
(B) acquired an interest in the land after the commencement date
under a contract entered into on or before the commencement date;
'rent' means any payment (in this definition referred to as a 'rental
payment') made by a lessee under a lease and includes a payment (whether made
by a lessee or another person) in the nature of a rental payment;
'rental property company equity investment', in relation to the taxpayer in
relation to a year of income, means a share held by the taxpayer at any time
during the year of income in a company that is a rental property company in
relation to the year of income;
'rental property company security investment', in relation to the taxpayer
in relation to a year of income, means a security of a company held by the
taxpayer at any time during the year of income, being a security of a company
that is a rental property company in relation to the year of income;
'rental property income', in relation to the taxpayer in relation to a year
of income, means-
any assessable income derived by the taxpayer in the year of income
by way of rent in respect of land (other than exempt residential land) where-
(i) the taxpayer acquired an interest in the land after the
commencement date; or
(ii) the taxpayer or another person made a post commencement date
improvement to the land;
any amount included in the assessable income of the taxpayer of the
year of income under sub-section 25 (1) or section 25A or 26AAA in respect of
the sale of an interest in land that was used by the taxpayer at any time for
rent producing purposes where-
(i) the taxpayer acquired an interest in the land after the
commencement date; or
(ii) the taxpayer or another person made a post commencement date
improvement to the land;
any amount included in the assessable income of the taxpayer of the
year of income in respect of a dividend paid to the taxpayer in respect of a
rental property company equity investment acquired by the taxpayer after the
commencement date;
any amount included in the assessable income of the taxpayer of the
year of income in respect of a rental property partnership equity investment
of the taxpayer acquired by the taxpayer after the commencement date;
in a case where-
(i) a deduction is allowable to a rental property partnership in the
year of income under Division 10C or 10D;
(ii) the taxpayer is a partner in the partnership;
(iii) the taxpayer became a partner after the commencement date; and
(iv) the amount (if any) included in the assessable income of the
taxpayer of the year of income under section 92 is less than the amount that
would have been so included in that assessable income if no deduction had been
allowable as mentioned in sub-paragraph (i),
the amount of the deficiency referred to in sub-paragraph (iv);
any amount included in the assessable income of the taxpayer of the
year of income under section 97 or 100 in respect of a rental property trust
estate equity investment acquired by the taxpayer after the commencement date;
any amount included in the assessable income of the taxpayer of the
year of income in respect of a unit trust dividend in respect of a rental
property trust estate equity investment of the taxpayer acquired by the
taxpayer after the commencement date;
any amount included in the assessable income of the taxpayer of the
year of income under sub-section 25 (1) or section 25A or 26AAA in respect of
the sale of-
(i) a share in a company acquired by the taxpayer after the
commencement date where the company is a rental property company in relation to-
(a) the year of income; or
(b) a preceding year of income, being a year of income during the
whole or any part of which the share was held by the taxpayer;
(ii) an interest in a partnership acquired by the taxpayer after the
commencement date where the partnership is a rental property partnership in
relation to-
(a) the year of income; or
(b) a preceding year of income, being a year of income during the
whole or any part of which the interest was held by the taxpayer; or
acquired by the taxpayer after the
commencement date where the trust estate is a rental property trust estate in
relation to-
(a) the year of income; or
(b) a preceding year of income, being a year of income during the
whole or any part of which the interest was held by the taxpayer;
any assessable income derived by the taxpayer in the year of income
by way of interest under-
(i) a rental property company security investment;
(ii) a rental property partnership security investment; or
(iii) a rental property trust estate security investment,
acquired by the taxpayer after the commencement date;
any amount (not being an amount to which paragraph 26 (e) applies)
included in the assessable income of the taxpayer of the year of income being
an amount received by way of insurance, indemnity, recoupment, recovery or
reimbursement for or in respect of any loss or outgoing which is an eligible
rental property deduction;
any amount included in the assessable income of the taxpayer of the
year of income under sub-section 63 (3) in respect of a debt that has been
brought to account as rental property income; and
so much of any amount included in the assessable income of the
taxpayer of the year of income under sub-section 59 (2) or (2C) in respect of
the disposal, loss or destruction of property any depreciation of which is or
was an eligible rental property deduction as, in the opinion of the
Commissioner, may appropriately be related to the use of the property for the
purpose of producing rental property income of the taxpayer;
'rental property loan interest', in relation to the taxpayer in relation to
a year of income, means-
interest incurred by the taxpayer in the year of income to the extent
to which it is incurred-
(i) in respect of money borrowed and used by the taxpayer to acquire
an interest in land, being an interest acquired after the commencement date; and
(ii) in respect of the use of the land by the taxpayer for rent
producing purposes;
interest incurred by the taxpayer in the year of income to the extent
to which it is incurred-
(i) in respect of money borrowed and used by the taxpayer to make a
post commencement date improvement to land; and
(ii) in respect of the use of the land by the taxpayer for rent
producing purposes;
interest incurred by the taxpayer in the year of income to the extent
to which it is incurred-
(i) in respect of money borrowed and used by the taxpayer-
(A) to acquire a share in a company after the commencement date;
(B) to acquire a security of a company after the commencement date;
or
(C) to pay a call made after the commencement date in respect of a
share in a company, being a share acquired by the taxpayer after the
commencement date; and
(ii) in respect of a time when the company is a rental property company;
interest incurred by the taxpayer in the year of income to the extent
to which it is incurred-
(i) in respect of money borrowed and used by the taxpayer-
(A) to acquire an interest in a partnership after the commencement
date; or
(B) to acquire a security of a partnership after the commencement
date; and
(ii) in respect of a time when the partnership is a rental property
partnership; and
interest incurred by the taxpayer in the year of income to the extent
to which it is incurred-
(i) in respect of money borrowed and used by the taxpayer-
(A) to acquire a beneficial interest in a trust estate after the
commencement date; or
(B) to acquire a security of a trust estate after the commencement
date; and
(ii) in respect of a time when the trust estate is a rental property
trust estate,
being interest in respect of which a deduction would, but for this
Subdivision, be allowable to the taxpayer under section 51;
'rental property partnership deduction', in relation to the taxpayer in
relation to a year of income, means-
where paragraph (b) does not apply-any deduction allowable to the
taxpayer in the year of income under section 92 in respect of a partnership
loss incurred by a rental property partnership in which the taxpayer became a
partner after the commencement date; or
where-
a deduction is allowable to the taxpayer in the year of income
under section 92 in respect of a partnership loss incurred by a rental
property partnership in which the taxpayer became a partner after the
commencement date; and
deductions were allowed to the partnership in the year of
income
under Division 10C or 10D,
the amount (if any) that would have been allowable as a deduction to the
taxpayer under section 92 if no deduction had been allowed to the partnership
under those Divisions;
'rental property partnership equity investment', in relation to the taxpayer
in relation to a year of income, means an interest held by the taxpayer at any
time during the year of income in a partnership that is a rental property
partnership in relation to the year of income;
'rental property partnership security investment', in relation to the
taxpayer in relation to a year of income, means a security of a partnership
held by the taxpayer at any time during the year of income, being a security
of a partnership that is a rental property partnership in relation to the year
of income;
"(6) Subject to sub-section (7), a company, partnership or trust estate
shall be taken, for the purposes of this Subdivision, to be a rental property
company, rental property partnership or rental property trust estate, as the
case may be, in relation to a year of income, if-
at the end of the year of income, the company, partnership or the
trustee of the trust estate held (whether through one or more interposed
companies, partnerships or trusts or otherwise) an interest or interests in
one or more parcels of land that, at the end of the year of income, was used
(whether or not by the first-mentioned company, partnership or trustee) for
rent producing purposes; and
at the end of the year of income, the net rental value of the interest,
or the aggregate of the net rental values of the interests, is not less than
75% of the net worth of the first-mentioned company, partnership or trust
estate.
"(7) Where-
at any time (in this sub-section referred to as the 'disposal time')
during a year of income (in this sub-section referred to as the 'current year
of income'), the taxpayer disposed of a share in, or security of, a company;
if the current year of income had ended immediately before the disposal
time, the company would not be taken, for the purposes of this Subdivision, to
be a rental property company in relation to the current year of income;
the taxpayer did not, after the disposal time and during the current
year of income, hold any share in, or security of, the company; and
having regard to the purpose or object underlying this Subdivision, it
would be reasonable for this Subdivision to apply in relation to the taxpayer
as if the company were not a rental property company in relation to the
current year of income, for the purposes of the application of this
Subdivision in relation to the taxpayer in relation to the current year of
income or any other year of income, the company shall not be taken to be a
rental property company in relation to the current year of income.
"(8) In calculating for the purposes of this Subdivision the net worth of a
company, partnership or trust estate, or the net value of an interest held by
a person in land, the Commissioner shall, if the Commissioner is satisfied
that anything was done for the purpose, or for purposes that included the
purpose, of ensuring that section 82KZD would not apply in relation to the
taxpayer, disregard the doing of that thing.
Limitation on deductions for rental property loan interest
"82KZD. (1) A deduction is not allowable to the taxpayer under section 51 in
a year of income in respect of rental property loan interest incurred after
the commencement date unless the rental property income derived by the
taxpayer during the year of income exceeds the eligible rental property
deductions of the taxpayer in relation to the year of income.
"(2) Where the rental property income derived by the taxpayer during a year
of income exceeds the eligible rental property deductions of the taxpayer in
relation to the year of income (which excess is in this sub-section referred
to as the 'interest deduction limit')-
the amount, or the total of the amounts, of the deduction or deductions
allowable to the taxpayer under section 51 in the year of income in respect of
rental property loan interest incurred after the commencement date shall not
exceed the interest deduction limit; and
where the total of the amounts of 2 or more deductions that would be so
allowable but for this sub-section exceeds the interest deduction limit, those
deductions shall be reduced respectively by amounts proportionate to those
deductions and equal in total to the last-mentioned excess.
Carry forward of excess rental property loan interest
"82KZE. Where the rental property loan interest of the taxpayer in relation
to a year of income exceeds the amount (if any) of the deduction allowable to
the taxpayer under section 51 in the year of income in respect of that rental
property loan interest, the excess amount shall, for the purposes of section
51 and this Subdivision, be deemed to have been incurred by the taxpayer at
the beginning of the next succeeding year of income.
Transfer of excess rental property loan interest within company group
"82KZF. (1) Where-
the rental property loan interest of a resident company (in this
section referred to as the 'transferor') in relation to a year of income
exceeds the amount (if any) of the deduction allowable to the transferor under
section 51 in the year of income in respect of that rental property loan
interest; and
the transferor and another resident company (in this section referred
to as the 'transferee') that is a group company in relation to the transferor
in relation to the year of income give to the Commissioner, on or before the
date of lodgment of the return of income of the transferor for the year of
income or within such further time as the Commissioner allows, a notice in
writing signed by the public officer of each of the companies stating that the
whole or a specified part of the excess referred to in paragraph (a) should be
transferred to the transferee, the amount to which the notice relates shall be
deemed, for the purposes of section 51 and this Subdivision-
to be rental property loan interest incurred by the transferee-
in a case where the year of income is the transitional year of
income-in that year of income and immediately after the commencement date;
and
in any other case-at the beginning of the year of income,
in gaining or producing assessable income; and
not to have been incurred by the transferor.
"(2) For the purposes of this section, a company shall be taken to be a
group company in relation to another company in relation to a year of income
if the company is a group company in relation to that other company in
relation to the year of income for the purposes of section 80G.
"(3) A notice under paragraph (1) (b) purporting to transfer an amount
specified in the notice to a transferee in relation to a year of income has no
effect to the extent that the sum of-
the amount so specified; and
any amounts specified in notices previously given under paragraph (1)
(b) by any transferor and deemed by sub-section (1) to be rental property loan
interest incurred by the transferee in the year of income, exceeds the amount
by which the rental property income of the transferee of that year of income
exceeds the sum of-
the eligible rental property deductions of the transferee in relation
to the year of income; and
the rental property loan interest of the transferee in relation to the
year of income (other than amounts deemed by sub-section (1) to be rental
property loan interest incurred by the transferee in the year of income).
"(4) A notice by the transferor under paragraph (1) (b) in relation to a
year of income has no effect if the sum of-
the amount specified in the notice under that paragraph; and
any amounts specified in notices previously given under that paragraph
by the transferor and deemed by sub-section (1) to be rental property loan
interest incurred by any transferee in the year of income, exceeds the amount
of the excess referred to in paragraph (1) (a) in relation to the transferor
in relation to the year of income.
"(5) Where-
the whole or a part of an excess is transferred to the transferee
pursuant to sub-section (1); and
that excess, or a part of that excess, was not available to be
transferred by the transferor, nothing in section 170 prevents the amendment
of an assessment in respect of the transferee to disallow the whole or a part
of a deduction in respect of the excess or part, as the case may be.
Special provision relating to partnerships
"82KZG. Section 82KZE does not apply in relation to a taxpayer being a
partnership but, where the rental property loan interest of the partnership in
relation to a year of income exceeds the amount (if any) of the deduction
allowable to the partnership under section 51 in relation to the year of
income in respect of that rental property loan interest, each partner in the
partnership shall be deemed, for the purposes of section 51 and this
Subdivision, to have incurred-
in a case where the year of income is the transitional year of
income-in that year of income and immediately after the commencement date;
and
in any other case-at the beginning of the year of income, in gaining or
producing assessable income, rental property loan interest equal to the
partner's portion of the excess.
Deemed acquisition of property
"82KZH. Subject to section 82KZJ, where, for any reason, including-
(a) the formation or dissolution of a partnership; or
(b) a variation in the constitution of a partnership, or in the interests of
the partners, a change has occurred in the ownership of, or in the interests
of persons in, property and the person, or one or more of the persons, who
owned the property before the change, has or have an interest in the property
after the change, this Subdivision applies as if the person or persons who
owned the property before the change had, on the day on which the change
occurred, disposed of the whole of the property to the person, or all the
persons, by whom the property is owned after the change.
When property acquired
"82KZJ. (1) For the purposes of the application of this Subdivision in
relation to the taxpayer in relation to an eligible year of income, property
acquired by the taxpayer on or before the commencement date and held by the
taxpayer during the whole or a part of the eligible period shall be deemed to
have been acquired by the taxpayer after the commencement date unless the
Commissioner is satisfied, or considers it reasonable to assume, that, at all
times during the eligible period when the property was held by the taxpayer,
majority underlying interests in the property were held by natural persons
who, immediately before the transitional date, held majority underlying
interests in the property.
"(2) For the purposes of this Subdivision, but subject to sub-section (1),
where, by reason of-
the formation or dissolution of a partnership; or
a variation in the constitution of a partnership, or in the interests
of the partners, property is deemed by section 82KZH to have been acquired by
the taxpayer after the commencement date and before the transitional date, the
property shall be deemed to have been acquired by the taxpayer before the
commencement date if the Commissioner is satisfied that-
immediately after the property was acquired by the taxpayer, an
underlying interest in the property was held by a natural person who held an
underlying interest in the property at the end of the commencement date; and
the person or persons from whom the taxpayer acquired the property
acquired the property on or before the commencement date.
"(3) For the purposes of this Subdivision, but subject to sub-section (1),
where, in a case to which sub-section (2) does not apply, property is acquired
by the taxpayer after the commencement date and before the transitional date
by reason of the death of another person, the property shall be deemed to have
been acquired by the taxpayer at the time when it was acquired by the deceased
person.
"(4) For the purposes of this Subdivision but subject to sub-section (1),
property acquired by the taxpayer on or after the transitional date shall be
deemed to have been acquired by the taxpayer before the commencement date if-
the Commissioner is satisfied that-
immediately after the property was acquired by the taxpayer,
majority underlying interests in the property were held by natural persons
who, immediately before the transitional date, held majority underlying
interests in the property; and
the person or persons from whom the taxpayer acquired the property
acquired the property on or before the commencement date;
where the person or persons from whom the taxpayer acquired the
property did not borrow and use money to acquire the property-the taxpayer did
not borrow and use money to acquire the property; and
where the person or persons from whom the taxpayer acquired the
property borrowed and used money to acquire the property-the amount of that
borrowed money outstanding immediately before the acquisition of the property
by the taxpayer was not less than the amount (if any) borrowed and used by the
taxpayer to acquire the property.
"(5) For the purposes of this section, where, by reason of the death of a
person, a natural person acquires a percentage (in this sub-section referred
to as the 'acquired percentage') of the total underlying interests in
property, the natural person shall be deemed to have held (in addition to any
other part of the total underlying interests that the person held or is deemed
to have held), at any time when the deceased person held a percentage (in this
sub-section referred to as the 'deceased person's percentage') of the total
underlying interests in the property, a percentage of the total underlying
interests in the property equal to the acquired percentage, or the deceased
person's percentage at that time, whichever is the less.
"(6) For the purposes of the application of this section in relation to a
year of income, 'eligible period' means the period commencing on the
transitional date and ending at the end of the year of income.
"(7) In this section, 'eligible year of income' means the year of income in
which the transitional date occurred or a subsequent year of income.".
TAXATION LAWS AMENDMENT ACT 1986No. 46, 1986
- SECT 12
Amendment of heading
12. The heading to Division 6A of Part III of the Principal Act is amended
by omitting "for Short Periods".
TAXATION LAWS AMENDMENT ACT 1986No. 46, 1986
- SECT 13
Interpretation
13. Section 102A of the Principal Act is amended-
by inserting before the definition of "interest" in sub-section (1) the
following definition:
" 'associate', in relation to a person, means any person who is an
associate, within the meaning of sub-section 26AAB (14), in relation to the
person;"; and
by adding at the end the following sub-section:
"(6) In this Division, unless the contrary intention appears-
a reference to the arm's length consideration in respect of a
transfer of a right to receive income from property is a reference to the
consideration that might reasonably be expected to have been received or
receivable in respect of the transfer if the right had been transferred under
an agreement between independent parties dealing at arm's length with each
other in relation to the agreement and transfer; and
a reference to the amount of consideration is, in a case where
consideration is paid or given otherwise than in cash, a reference to the
money value of the consideration.".
TAXATION LAWS AMENDMENT ACT 1986No. 46, 1986
- SECT 14
Certain income transferred for short periods to be included in assessable
income of transferor
14. Section 102B of the Principal Act is amended-
by omitting sub-sections (1), (2) and (3) and substituting the
following sub-sections:
"(1) Subject to this section, where a right to receive income from
property is transferred, otherwise than by a will or codicil, by a person (in
this sub-section referred to as the 'transferor') to an associate of the
transferor for a period that will, or may for any reason other than the death
of any person or the associate becoming under a legal disability, terminate
before the prescribed date, any income that-
is derived from the property;
is paid to, or applied or accumulated for the benefit of-
the associate; or
any other associate of the transferor to whom a right to receive
income from the property has been transferred (whether by the first-mentioned
associate or any other person) after the first-mentioned transfer; and
would, if the first-mentioned transfer had not been made, have been
included in the assessable income of the transferor,
shall be treated for the purposes of this Act as if the first-mentioned
transfer had not been made.
"(2) Sub-section (1) (other than sub-paragraph (1) (b) (ii)) does not
apply in relation to a transfer of a right to receive income from property
where-
the right was not a right that arose from the ownership by the
transferor of an interest in the property;
the right arose from the ownership by the transferor of an interest
in the property and, before or at the time of the first-mentioned transfer,
the transferor transferred that interest to the transferee or another person;
or
(c) consideration has been received or is receivable in respect of the
transfer and the amount of that consideration is not less than the arm's
length consideration in respect of the transfer.
"(3) Where, on a particular day, a person who has transferred to another
person a right to receive income from property-
in any case-transfers to the other person or to a third person an
interest in the property, being the interest from the ownership of which by
the transferor the right arose;
in the case of a natural person-dies; or
in the case of a company-ceases to exist,
sub-section (1) (other than sub-paragraph (1) (b) (ii)) does not apply, in
relation to the transfer of the right to receive income, in relation to income
that is derived from the property after that day.";
by omitting from sub-section (4) "This section does not apply to" and
substituting "Sub-section (1) does not apply in relation to"; and
by inserting after sub-section (4) the following sub-section:
"(4A) Where-
sub-section (1) (other than sub-paragraph (1) (b) (ii)) applies in
relation to a transfer by a person of a right to receive income from property;
and
consideration has been received or is receivable in respect of the
transfer,
then, notwithstanding any other provision of this Act (other than a
provision of Part IVa), the amount of the consideration shall not be included
in the assessable income of the person of a year of income.".
TAXATION LAWS AMENDMENT ACT 1986No. 46, 1986
- SECT 15
15. After section 102c of the Principal Act the following section is
inserted in Division 6A of Part III:
Consideration in respect of transfer to be included in assessable income of
transferor in certain cases
"102ca. (1) Subject to this section, where-
a right to receive income from property is transferred, otherwise than
by a will or codicil, by a person to another person;
consideration has been received or is receivable in respect of the
transfer; and
immediately after the transfer, sub-section 102B (1) (other than
does not apply in relation to the transfer,
the assessable income of the transferor of the year of income in which the
right is transferred shall include the amount of the consideration.
"(2) Sub-section (1) does not apply in relation to a transfer of a right to
receive income from property where-
the right was not a right that arose from the ownership by the
transferor of an interest in the property; or
the right arose from the ownership by the transferor of an interest in
the property and, before or at the time of the first-mentioned transfer, the
transferor transferred that interest to the transferee.
"(3) Where, by reason of the proviso to paragraph 23 (l), income derived by
a person pursuant to a transfer to the person of a right to receive income
from property is not exempt from tax under that paragraph, sub-section (1)
does not apply in relation to the transfer.".
TAXATION LAWS AMENDMENT ACT 1986No. 46, 1986
- SECT 16
Qualifying expenditure
16. Section 124ZB of the Principal Act is amended by inserting in paragraphs
(1) (c) and (2) (b) "and before 18 July 1985" after "21 August 1979".
TAXATION LAWS AMENDMENT ACT 1986No. 46, 1986
- SECT 17
Interpretation
17. Section 124ZF of the Principal Act is amended-
by inserting before the definition of "construct" in sub-section (1)
the following definitions:
" 'agreement' means any agreement, arrangement or understanding-
whether formal or informal or partly formal and partly informal;
whether written or oral or partly written and partly oral; and
whether or not having legal or equitable force and whether or not
based on legal or equitable rights;
'associate', in relation to a person, means-
in a case where the person is a private company in relation to the
year of income concerned-a director or member of the company, or a spouse,
parent or child of such a director or member;
in a case where the person is a partnership-a partner in the
partnership, or a spouse, parent or child of such a partner;
in a case where the person is a trustee of a private trust
estate-another trustee, or a beneficiary, of the trust estate, or a spouse,
parent or child of a trustee or beneficiary of the trust estate; or
in a case where the person is a natural person-a spouse, parent or
child of the person;";
by inserting after the definition of "eligible building" in sub-section
(1) the following definitions:
" 'parent', in relation to a person, means a person of whom the
first-mentioned person is a child;
'private trust estate' has the same meaning as that expression has in
section 26AAA;";
by omitting from the definition of "residential accommodation" in
sub-section (1) "nature." and substituting "nature;";
by adding at the end of sub-section (1) the following definition:
" 'spouse', in relation to a person, includes another person who,
although
not legally married to the first-mentioned person, lives with the
first-mentioned person as the husband or wife of the first-mentioned person on
a bona fide domestic basis.";
by inserting after sub-section (1) the following sub-sections:
"(1a) For the purposes of this Division, an agreement to which a person
and an associate of the person are parties is an exempt agreement if, and only
if, the Commissioner is satisfied, having regard to all the relevant
circumstances, that-
the parties to the agreement could reasonably be expected to have
entered into the agreement if those parties had been independent parties each
of whom was, in relation to the agreement, dealing at arm's length with each
of the others; and
none of the parties to the agreement entered into the agreement for
the purpose of obtaining a deduction under this Division.
"(1b) Without limiting the generality of paragraph (1a) (b), a person
shall be taken, for the purposes of that paragraph, to have entered into an
agreement for a particular purpose if-
the person entered into the agreement for purposes including that
purpose; and
that purpose was not merely an incidental purpose of the entering
into, by the person, of the agreement.";
by omitting sub-section (4) and substituting the following sub-sections:
"(4) For the purposes of the application of this Division in determining
the amount of any deduction allowable under section 124ZH or 124ZK, or the
amount of the residual capital expenditure, in respect of an amount of
qualifying expenditure in respect of a building (in this sub-section referred
to as the 'relevant building'), a person shall not be taken to have used, at a
particular time, property, being the whole or a part of the prescribed part,
or of a part of the prescribed part, of the relevant building, for the purpose
of producing assessable income, if, at that time-
in a case where the building, or the extension, alteration or
improvement, in respect of the construction of which the amount of qualifying
expenditure was incurred commenced to be constructed before 18 July 1985-the
property-
was used or available for use (whether by that person or by
another person or other persons) wholly or principally for, or in association
with, residential accommodation; or
was used or for use (whether by that person or by another person
or other persons) wholly or principally for exhibition or display in
connection with-
(A) the sale of the whole or any part of the relevant building or
any other building; or
(B) the lease of the whole or any part of the relevant building or
any other building for use (whether by that person or by another person or
other persons) wholly or principally for, or in association with, residential
accommodation; or
in any other case-the property was used or for use (whether by that
person or by another person or other persons) wholly or principally for
exhibition or display in connection with the sale of the whole or any part of
the relevant building or any other building.
Where-
there is an amount of qualifying expenditure in respect of a
building
(in this sub-section referred to as the 'relevant building');
the building, or the extension, alteration or improvement, in respect
of the construction of which the amount of qualifying expenditure was incurred
commenced to be constructed on or after 18 July 1985; and
at a particular time, property, being the whole or a part of the
prescribed part, or of a part of the prescribed part, of the relevant building-
was used or for use by a person (in this sub-section referred to
as the 'relevant person') wholly or principally for, or in association with,
residential accommodation; or
was, pursuant to an agreement (other than an exempt agreement) to
which a person (in this sub-section also referred to as the 'relevant person')
and an associate of the relevant person were parties, used or for use by the
associate wholly or principally for, or in association with, residential
accommodation,
then, for the purposes of the application of this Division (other than this
sub-section) in determining the amount of any deduction allowable under
section 124ZH or 124ZK, or the amount of the residual capital expenditure, in
respect of the amount of qualifying expenditure, use by the relevant person at
that time of the whole or a part of the property for the purpose of producing
assessable income, other than assessable income consisting of payments made to
the relevant person solely in consideration of the whole or a part of the
property-
being used or available for use by a person, being neither the
relevant person nor an associate of the relevant person; or
being used or available for use by an associate of the relevant
person pursuant to an exempt agreement to which the relevant person and the
last-mentioned associate are parties,
shall be deemed not to be use by the relevant person for the purpose of
producing assessable income.";
by omitting from sub-section (5) "this Division" and substituting
"paragraph (4) (a) of this section and sub-section 124ZG (2)";
by omitting from paragraph (5) (a) "is used" and substituting "is
used,";
by omitting from sub-section (6) "this Division" and substituting
"paragraph (4) (a) of this section and sub-section 124ZG (2)";
by inserting after sub-section (6) the following sub-section:
"(6a) For the purposes of sub-section (4a) of this section and
sub-section
124ZG (2b), where, at a particular time, property, being the whole or a part
of a building, is a part of a person's home and would, but for this
sub-section, be taken not to be, at that time, used or for use by that person
wholly or principally for, or in association with, residential accommodation,
the property shall be taken to be, at that time, used or for use by that
person wholly or principally for, or in association with, residential
accommodation."; and
by inserting in sub-section (7) ", for use" after "used" (first
occurring).
TAXATION LAWS AMENDMENT ACT 1986No. 46, 1986
- SECT 18
Qualifying expenditure
18. Section 124ZG of the Principal Act is amended-
by inserting in paragraph (1) (c) "and before 18 July 1985" after "19
July 1982";
by inserting after sub-section (2) the following sub-sections:
"(2A) Subject to this section, where-
a person has incurred expenditure of a capital nature in respect of
the construction of a building in Australia, or in respect of the construction
of an extension, alteration or improvement to a building in Australia;
at the time when that expenditure was incurred-
the building, or the extension, alteration or improvement, as the
case may be, was to be owned or leased by that person; or
a part only of the building, or of the extension, alteration or
improvement, as the case may be, was to be owned or leased by that person;
the building, or the extension, alteration or improvement, as the
case may be, commenced to be constructed after 17 July 1985 and construction
of the building, or of that extension, alteration or improvement, as the case
may be, has been completed; and
at the time of completion of construction of the building, or of the
extension, alteration or improvement, as the case may be-
in a case to which sub-paragraph (b) (i) applies-
(A) the building, or the extension, alteration or improvement, as
the case may be, was for use by that person for the purpose of producing
income, was for disposal by that person to another person for use by that
other person for the purpose of producing income, or was for residential use;
or
(B) a part (in this sub-sub-paragraph referred to as the 'relevant
part') of the building, or of the extension, alteration or improvement, as the
case may be, was for use by that person, or disposal by that person, as
described in sub-sub-paragraph (A), or was for residential use; or
in a case to which sub-paragraph (b) (ii) applies-
(A) the whole (in this sub-sub-paragraph referred to as the
'relevant part') of the part of the building, extension, alteration or
improvement, as the case may be, to which that sub-paragraph applies was for
use by that person, or disposal by that person, as described in
sub-sub-paragraph (i) (A), or was for residential use; or
(B) a part (in this sub-sub-paragraph referred to as the 'relevant
part') of the part of the building, extension, alteration or improvement, as
the case may be, to which that sub-paragraph applies was for use by that
person, or disposal by that person, as described in sub-sub-paragraph (i) (A),
or was for residential use,
then, for the purposes of this Division-
in a case to which sub-sub-paragraph (d) (i) (A) applies-the amount
of the capital expenditure referred to in paragraph (a) shall be taken to be
an amount of qualifying expenditure in respect of the building; and
in a case to which sub-sub-paragraph (d) (i) (B), (ii) (A) or (ii)
(B) applies-so much of the amount of the capital expenditure referred to in
paragraph (a) as is attributable to the relevant part referred to in whichever
of those sub-sub-paragraphs is applicable shall be taken to be an amount of
qualifying expenditure in respect of the building.
"(2B) For the purposes of paragraph (2A) (d), a building, extension,
alteration or improvement, or a part of a building, extension, alteration or
improvement, shall be taken to be for residential use if, and only if, the
building, extension, alteration or improvement, or the part of the building,
extension, alteration or improvement, as the case may be, is for use by a
person or persons wholly or principally for, or in association with,
residential accommodation."; and
by omitting from sub-section (3) "sub-section (1)" and substituting
"sub-sections (1) and (2A)".
TAXATION LAWS AMENDMENT ACT 1986No. 46, 1986
- SECT 19
19. After section 169 of the Principal Act the following section is
inserted:
Reliance by Commissioner on return
"169A. (1) Where a return of income of a taxpayer of a year of income is
furnished to the Commissioner (whether or not by the taxpayer), the
Commissioner may, for the purposes of making an assessment in relation to the
taxpayer under this Act, accept, either in whole or in part, a statement in
the return of the assessable income derived by the taxpayer and of any
allowable deductions or rebates to which it is claimed that the taxpayer is
entitled and any other statement in the return relevant to the assessment.
Notwithstanding sub-section (1), where, in a document furnished with a
return of income of a taxpayer of a year of income and signed by or on behalf
of the taxpayer, a question is raised that is relevant to the liability of the
taxpayer to tax in respect of the year of income, the Commissioner shall give
attention to that question.
"(3) In determining whether an assessment is correct, any determination,
opinion or judgment of the Commissioner made, held or formed in connection
with the consideration of an objection against the assessment shall be deemed
to have been made, held or formed when the assessment was made.".
TAXATION LAWS AMENDMENT ACT 1986No. 46, 1986
- SECT 20
Amendment of assessments
20. Section 170 of the Principal Act is amended-
by omitting from sub-section (2) "an error in calculation or a mistake
of fact or to prevent avoidance of tax as the case may be" and substituting
"the assessment";
by omitting from sub-section (3) "except to correct an error in
calculation or a mistake of fact; and no such amendment shall be made";
by omitting from sub-section (4) "except to correct an error in
calculation or a mistake of fact; and no such amendment shall be made"; and
by omitting sub-sections (8), (10A) and (12).
TAXATION LAWS AMENDMENT ACT 1986No. 46, 1986
- SECT 21
21. After section 170A of the Principal Act the following section is
inserted:
Payment of interest by taxpayer where assessment amended
"170AA. (1) Subject to this section, where an amendment of an assessment
increasing the liability of a taxpayer to tax is made, the taxpayer is liable
to pay interest to the Commissioner, calculated in accordance with sub-section
(4), on the amount (in this section referred to as the 'principal amount') by
which the tax payable by the taxpayer under the amended assessment exceeds the
tax payable by the taxpayer under the assessment that was amended.
"(2) Where-
but for this sub-section, interest would be payable by a taxpayer under
sub-section (1) in respect of the principal amount; and
a person being-
the taxpayer;
a partner in a partnership in which the taxpayer is or
was a partner; or
(iii) a trustee of a trust estate of which the taxpayer is or
was a beneficiary,
is liable to pay, or would but for sub-section 8ZE (1) of the Taxation
Administration Act 1953 or sub-section 227 (3) of this Act, be liable to pay,
additional tax under Part VII (other than section 222) of this Act in respect
of the matter to which the principal amount, or part of the principal amount,
relates, interest is not payable by the taxpayer under sub-section (1) in
respect of the principal amount or the part of the principal amount, as the
case may be.
"(3) Where-
a taxpayer is liable to pay or would, but for sub-section (11), be
liable to pay, interest under sub-section (1) on an amount (in this
sub-section referred to as the 'base amount'), being the whole or a part of
the principal amount; and
as a result of the amendment by virtue of which the interest became
payable, an amendment of an assessment is made increasing-
the liability of the taxpayer (in this sub-section referred to as
the 'penalty payer') to additional tax under Part VII;
the liability of a partner (in this sub-section also referred to
as
the 'penalty payer') in a partnership in which the taxpayer is or was a
partner to additional tax under sub-section 223 (2); or
the liability of the trustee (in this sub-section also referred to
as the 'penalty payer') of a trust estate of which the taxpayer is or was a
beneficiary to additional tax under sub-section 223 (4), the penalty payer is
liable to pay interest to the Commissioner, calculated in accordance with
sub-section (4), on the amount ascertained in accordance with the formula AB,
where-
C
is so much of the additional tax payable by the penalty payer under the
amended assessment as is attributable to the amendment by virtue of which the
interest referred to in paragraph (a) became payable;
is the number of whole dollars in the base amount; and
is the number of whole dollars in the principal amount.
"(4) Interest payable by a taxpayer under sub-section (1) or (3) in relation
to an amended assessment (in this sub-section referred to as the 'current
amended assessment') in respect of a year of income shall be calculated-
(a) in respect of the period commencing on-
in a case to which sub-section (1) applies-the day on which tax
became due and payable by the taxpayer under the first assessment in respect
of income of the taxpayer of the year of income; or
in a case to which sub-section (3) applies-the day on which
additional tax under Part VII became due and payable by the taxpayer under the
assessment referred to in paragraph (3) (b) or, if that assessment was
previously amended on one or more occasions, under that assessment before any
amendment,
and ending on the day on which the current amended assessment is made; and
at such rate of interest as is, or such rates of interest as are,
applicable under regulations made for the purposes of paragraph 10 (1) (b) of
the Taxation (Interest on Overpayments) Act 1983.
"(5) Where, under section 206, the Commissioner-
has granted an extension of time for payment of tax or of additional
tax under Part VII; or
has permitted payment of tax, or additional tax under Part VII, to be
made by instalments, that tax or additional tax shall be deemed, for the
purposes of this section, to have become due and payable on such date as the
Commissioner determines, not being a date before the date on which the tax or
additional tax was originally due and payable.
"(6) Where-
the Commissioner has served notice in respect of a taxpayer to the
effect that the taxable income of the taxpayer of the year of income is nil or
that no tax is payable on the taxable income of the taxpayer of a year of
income; and
the Commissioner subsequently makes an assessment of the taxable income
of the taxpayer of the year of income and of the tax payable on that taxable
income, the following provisions have effect for the purposes of this section:
the notice referred to in paragraph (a) shall be deemed to be an
assessment (in this sub-section referred to as the 'notional assessment') on
which a nil amount of tax became due and payable at the end of 30 days after
the date of service of the notice; and
the assessment referred to in paragraph (b) shall be deemed to be an
amendment of the notional assessment.
"(7) Until regulations are made for the purposes of paragraph 10 (1) (b) of
the Taxation (Interest on Overpayments) Act 1983, interest payable by a
taxpayer under this section shall be calculated at the rate of 14.026% per
annum.
"(8) Where, but for this sub-section, the amount of interest that would be
payable under sub-section (1) or (3) by a taxpayer is less than 50 cents,
interest is not payable by the taxpayer under that sub-section.
"(9) Where the taxpayer is liable to pay to the Commissioner an amount of
interest under this section, the Commissioner shall serve on the taxpayer
notice in writing specifying-
the period in respect of which the taxpayer is liable to pay the
interest;
the amount of the interest; and
a date, being a date not less than 30 days after the day of service of
the notice, as the due date for payment of the interest, and the amount is due
and payable on that date.
"(10) A notice for the purposes of sub-section (9) may be incorporated in a
notice of assessment.
"(11) The Commissioner may, in his or her discretion, remit the whole or any
part of the interest payable by a taxpayer under this section.
"(12) Unless the contrary intention appears, in sections 172, 201, 202, 205,
206, 208, 209, 214, 215, 216, 254, 255, 258, 259 and 265, but not in any other
section of this Act, 'income tax' or 'tax' includes interest payable under
this section.
"(13) The ascertainment of an amount of interest under this section shall be
deemed not to be an assessment within the meaning of any of the provisions of
this Act.
"(14) In this section, unless the contrary intention appears-
'tax' does not include additional tax payable under section 104;
'taxpayer' includes a penalty payer referred to in sub-section (3) of this
section.".
TAXATION LAWS AMENDMENT ACT 1986No. 46, 1986
- SECT 22
Refunds of amounts overpaid
22. Section 172 of the Principal Act is amended by omitting from paragraph
(1) (a) "section 207" and substituting "sections 170AA and 207".
TAXATION LAWS AMENDMENT ACT 1986No. 46, 1986
- SECT 23
Adjustment of tax after appeal
23. Section 202 of the Prinicpal Act is amended by omitting from paragraph
(1) (a) "section 207" and substituting "sections 170AA and 207".
TAXATION LAWS AMENDMENT ACT 1986No. 46, 1986
- SECT 24
Commissioner may collect tax from person owing money to taxpayer
24. Section 218 of the Principal Act is amended-
by inserting after paragraph (b) of the definition of "tax" in
sub-section (6B) the following paragraph:
an amount of interest that a person is liable to pay to the
Commissioner under section 170AA;";
by omitting from sub-paragraph (c) (ii) of the definition of "tax" in
sub-section (6B) "or"; and
by inserting after sub-paragraph (c) (iii) of the definition of "tax"
in sub-section (6B) the following word and sub-paragraph:
"; or (iv) an amount of interest that a taxpayer is liable to pay to the
Commissioner under section 170AA;".
TAXATION LAWS AMENDMENT ACT 1986No. 46, 1986
- SECT 25
Application of amendments
25. (1) The amendments made by sections 5 to 9 (inclusive) and 19 to 24
(inclusive) apply to-
assessments (not being amended assessments) made on or after 1 July
1986 in respect of income of the year of income that commenced on 1 July 1985
or of any subsequent year of income; and
the first and any subsequent amendment of such an assessment.
(2) Sub-section 170AA (6) of the Principal Act applies for the purposes of
sub-section (1) of this section.
section 10 applies to gifts made on or after 18
February 1986.
(4) The amendment made by section 11 applies to assessments in respect of
income of the year of income in which 17 July 1985 occurred and of all
subsequent years of income.
(5) The amendments made by sections 12, 13, 14 and 15 apply-
in relation to a transfer, after 9 October 1985, of a right to receive
income from property, other than a transfer of such a right pursuant to a
contract that was made on or before 9 October 1985; and
in relation to income derived after 9 October 1985.
(6) Section 102A of the Principal Act applies for the purposes of
sub-section (5) of this section and so applies as if that sub-section were a
provision of Division 6A of Part III of the Principal Act.
TAXATION LAWS AMENDMENT ACT 1986No. 46, 1986
- SECT 27
Principal Act
27. The Income Tax (International Agreements) Act 1953*2* is in this Part
referred to as the Principal Act. Interpretation
*2* No. 82, 1953, as amended. For previous amendments, see No. 25, 1958; No.
88, 1959; Nos. 19 and 29, 1960; No. 71, 1963; No. 112, 1964; No. 105, 1965;
No. 17, 1966; Nos. 39 and 86, 1967; No. 3, 1968; No. 24, 1969; No. 48, 1972;
Nos. 11 and 216, 1973; No. 129, 1974; No. 119, 1975; Nos. 52, 55 and 143,
1976; No. 134, 1977; No. 87, 1978; Nos. 23 and 127, 1980; Nos. 28, 110, 143
and 154, 1981; Nos. 51 and 57, 1983; Nos. 123 and 125, 1984; and Nos. 168 and
173, 1985.
TAXATION LAWS AMENDMENT ACT 1986No. 46, 1986
- SECT 28
28. Section 3 of the Principal Act is amended by inserting after the
definition of "the Canadian convention" in sub-section (1) the following
definition:
" 'the Chinese airline profits agreement' means the Agreement between the
Government of Australia and the Government of the People's Republic of China
for the avoidance of double taxation of income and revenues derived by air
transport enterprises from international air transport, being the agreement a
copy of which in the English language is set out in Schedule 26;".
TAXATION LAWS AMENDMENT ACT 1986No. 46, 1986
- SECT 29
29. (1) After section 11P of the Principal Act the following section is
inserted:
Airline profits agreement with the People's Republic of China
"11Q. (1) Subject to this Act, on and after the date of entry into force of
the Chinese airline profits agreement, the provisions of the agreement, so far
as those provisions affect Australian tax, have, and shall be deemed to have
had, the force of law in relation to tax in respect of income derived on or
after 1 July 1984 and in relation to which the agreement remains effective.
"(2) As soon as practicable after the entry into force of the Chinese
airline profits agreement in accordance with Article 4 of the agreement, the
Treasurer shall cause to be published in the Gazette a notice specifying the
date on which the agreement entered into force.".
(2) The Commissioner may amend an assessment made before the date of entry
into force of the Chinese airline profits agreement for the purpose of giving
effect to sub-section 11Q (1) of the Principal Act as amended by this Act.
TAXATION LAWS AMENDMENT ACT 1986No. 46, 1986
- SECT 30
Schedule
30. The Principal Act is amended by adding at the end the Schedule set out
in the Schedule to this Act.
TAXATION LAWS AMENDMENT ACT 1986No. 46, 1986
- SECT 31
Principal Act
31. The Pay-roll Tax (Territories) Assessment Act 1971*3* is in this Part
referred to as the Principal Act.
*3* No. 77, 1971, as amended. For previous amendments, see No. 66, 1972; No.
216, 1973; No. 172, 1976; Nos. 55 and 62, 1978; Nos. 10, 19 and 64, 1979; Nos.
11 and 134, 1980; No. 69, 1981; Nos. 122 and 128, 1982; No. 39, 1983; No. 123,
1984; Nos. 47, 65 and 123, 1985; and No. 41, 1986.
TAXATION LAWS AMENDMENT ACT 1986No. 46, 1986
- SECT 32
Interpretation
32. Section 4 of the Principal Act is amended-
(a) by inserting after the definition of "employer" in sub-section (1) the
following definition:
" 'group' means a group constituted under Part IVA;";
(b) by omitting from sub-section (1) the definition of "tax" and
substituting the following definition:
" 'tax' means-
(a) tax referred to in section 10;
(b) tax referred to in section 15A;
(c) tax referred to in sub-section 21J (5); and
(d) tax referred to in sub-section 21K (6);"; and
by adding at the end the following sub-sections:
"(4) A reference in this Act to wages paid or payable by a member of a
group is a reference to wages paid or payable by that member while a member of
the group.
"(5) Unless the contrary intention appears, a reference in Part V, VI,
VII
or IX to an employer includes a reference to a person who is not an employer
but is liable to pay-
tax referred to in sub-section 21J (5); or
tax referred to in sub-section 21K (6).".
TAXATION LAWS AMENDMENT ACT 1986No. 46, 1986
- SECT 33
General exemption
33. Section 12 of the Principal Act is amended by adding at the end of
sub-section (9) the following definition:
" 'wages' does not include wages paid or payable by a member of a group.".
TAXATION LAWS AMENDMENT ACT 1986No. 46, 1986
- SECT 34
Refund or rebate of tax on annual adjustment
34. Section 14 of the Principal Act is amended by omitting sub-section (9)
and substituting the following sub-section:
"(9) In this section-
'employer in Australia' does not include an employer in Australia who is a
member of a group;
'tax' means tax referred to in section 10 that is payable in respect of
wages;
'wages' does not include wages paid or payable by a member of a group.".
TAXATION LAWS AMENDMENT ACT 1986No. 46, 1986
- SECT 35
Tax payable on annual basis
35. Section 15A of the Principal Act is amended by adding at the end of
sub-section (3) the following definition:
" 'taxable wages' does not include wages paid or payable by a member of a
group.".
TAXATION LAWS AMENDMENT ACT 1986No. 46, 1986
- SECT 36
Registration
36. Section 16 of the Principal Act is amended-
(a) by omitting from sub-section (1) "An employer" and substituting "Subject
to sub-section (1a), an employer";
(b) by omitting from sub-section (1) "at a rate in excess of $2,250 per week
or such higher rate as is prescribed, being wages"; and
(c) by inserting after sub-section (1) the following sub-section:
"(1a) An employer who is not, at any time during a month, a member of a
group is not required to apply for registration under sub-section (1) within 7
days after the close of the month unless, during the month, the employer pays
or is liable to pay, anywhere, wages at a rate in excess of $3,269.23 per week
or such higher rate as is prescribed, being wages that, in whole or in part,
are taxable wages.".
TAXATION LAWS AMENDMENT ACT 1986No. 46, 1986
- SECT 37
37. After Part IV of the Principal Act the following Part is inserted:
"PART IVA - GROUPING PROVISIONS
Interpretation
"21A. In this Part, unless the contrary intention appears-
'business', in relation to a person, includes-
a profession or trade;
any other activity carried on for fee, gain or reward; and
the activity, carried on by the person, of employing persons to
perform duties for or in connection with another business,
whether carried on by the person alone or together with other persons;
'corporation' has the same meaning as in the Companies Act 1981;
'deductible amount', in relation to a group in relation to a financial year,
means the amount calculated in accordance with the formula-
A
CD- 2H, where-
3
is the number of whole dollars in the total amount of the taxable wages
paid or payable during the financial year by members of the group;
is the number of whole dollars in the total amount of the taxable wages
and the interstate wages paid or payable during the financial year by the
members of the group;
is-
in the case of the financial year that commenced on 1 July
1985-$170,000; or
in the case of a subsequent financial year-
(i) in a case where the relevant amount for the purposes of section
14 in relation to the financial year is ascertained in accordance with
sub-section 14 (4d) or (4e) and sub-section 14 (4f) does not apply-that
relevant amount; or
(ii) in a case where there are, in accordance with sub-section 14
(4f), 2 or more relevant amounts for the purposes of section 14 applicable to
periods in that year-the sum of the amounts calculated in accordance with
sub-paragraph 14 (4a) (h) (i);
is the factor calculated in accordance with the formula
E-F, where-
G
is-
in the case of the financial year that commenced on 1 July
1985-the number of whole days in the initial period during which there was a
designated group employer in respect of the group; or
in the case of a subsequent financial year-the number of whole
days in the financial year during which there was a designated group employer
in respect of the group;
is-
in the case of the financial year that commenced on 1 July
1985-the number of days in the initial period in respect of which no taxable
or interstate wages were paid or payable by any member of the group; or
in the case of a subsequent financial year-the number of days in
the financial year in respect of which no taxable or interstate wages were
paid or payable by any member of the group; and
is the number of days in the financial year; and
is so much of the total amount of the taxable wages and the interstate
wages paid or payable during the financial year by the members of the group as
exceeds the amount calculated by multiplying the amount represented by
component C by the factor represented by component D;
'designated group employer', in relation to a group, means the member of the
group who is for the time being the designated group employer in respect of
the group pursuant to section 21G;
'financial year' means the financial year that commenced on 1 July 1985 or a
subsequent financial year;
'initial period' means the period commencing on the day on which this
section comes into operation and ending on 30 June 1986;
'interstate wages' means wages that are taxable wages within the meaning of
a corresponding law;
'return period', in relation to an employer, means the period in relation to
which the employer is required to furnish a return under section 17 or 18.
Grouping of corporations
"21b. For the purposes of this Act, 2 corporations constitute a group if, by
virtue of sub-section 7 (5) of the Companies Act 1981, they are related to
each other for the purposes of that Act.
Grouping where employees used in another business
"21c. (1) For the purposes of this Act, where-
an employee of an employer performs duties wholly or principally for or
in connection with a business carried on by another person (whether carried on
together with the employer or otherwise); or
an employer has, in respect of the employment of, or the performance of
duties by, an employee of the employer, an agreement with another person
relating to a business carried on by that other person, that employer and each
of the other persons carrying on that business constitute a group.
"(2) In this section, 'agreement' means an agreement, arrangement or
understanding, whether formal or informal, express or implied and whether or
not enforceable, or intended to be enforceable, by legal proceedings.
Grouping of commonly controlled businesses
"21d. (1) For the purposes of this Act, where a person has, or 2 or more
persons together have, a controlling interest in each of 2 businesses, the
persons who carry on those businesses constitute a group.
"(2) For the purposes of this section, a person, or 2 or more persons
together, shall be taken to have a controlling interest in a business if, and
only if-
in the case of a business carried on by a corporation-
any one or more of the directors of the corporation,
being a director or directors who is or are entitled to exercise a majority in
voting power at meetings of the directors, is or are accustomed or under an
obligation, whether formal or informal, to act in accordance with the
directions, instructions or wishes of that person or of those persons acting
together; or
that person or those persons acting together may (whether
directly or indirectly) exercise, control the exercise of, or substantially
influence the exercise of, 50% or more of the voting power attached to voting
shares issued by the corporation;
in the case of a business carried on by a partnership, that person or
those persons-
owns, or own together (whether or not beneficially), 50% or more of
the capital of the partnership; or
is, or are together, entitled (whether or not beneficially) to 50%
or more of any profits of the partnership;
in the case of a business carried on by the trustee of a trust-that
person (whether or not as the trustee of another trust) is the beneficiary, or
those persons (whether or not as the trustees of another trust) are together
the beneficiaries, in respect of 50% or more of the value of the interests in
the first-mentioned trust; or
in any case-
whether or not that person is a trustee of a trust, that person is
the sole owner of the business; or
whether or not those persons are trustees of a trust, those persons
are the owners of the business.
"(3) A corporation that has a controlling interest in a business shall be
deemed, for the purposes of this section, to have a controlling interest in
any other business in which another corporation that is, by virtue of
sub-section 7 (5) of the Companies Act 1981, related to the first-mentioned
corporation for the purposes of that Act, has a controlling interest.
"(4) Where-
a person has, or persons have together, a controlling interest in a
business; and
the person or persons who carries on or carry on that business has or
have such a controlling interest in another business, the person or persons
referred to in paragraph (a) shall, for the purposes of this section, be
deemed to have a controlling interest in the business referred to in paragraph
(b).
"(5) Where-
a person is a beneficiary under a trust; or
2 or more persons together are beneficiaries under a trust, in respect
of 50% or more of the value of the interests in that trust and the trustee or
trustees of that trust has or have a controlling interest in a business, that
beneficiary or those beneficiaries shall, for the purposes of this section, be
deemed to have a controlling interest in that business.
"(6) A reference in this section to 2 businesses does not include a
reference to 2 businesses both of which are owned by the same person, not
being a trustee, or by the trustee or trustees of a trust.
"(7) A person who, as the result of the exercise of a power or discretion by
the trustee of a discretionary trust, or by any other person or by that
trustee and another person, may benefit under that trust shall be deemed, for
the purposes of this section, to be a beneficiary in respect of 50% or more of
the value of the interests in that trust.
Smaller groups subsumed into larger groups
"21e. (1) Subject to sub-section (2), where a person is, whether or not by
virtue of this sub-section, a member of 2 or more groups (each of which is in
sub-section (2) referred to as a 'smaller group'), all of the members of those
groups constitute, for the purposes of this Act, one group.
"(2) A group which, but for this sub-section, would be a smaller group
ceases to be a group if its members are members of a group by virtue of
sub-section (1).
Exclusion of persons from groups
"21f. (1) Where-
a person (in this sub-section referred to as the 'independent person')
is a member of a group; and
the Commissioner is satisfied, having regard to-
the nature and degree of ownership or control of each of the
businesses carried on by members of the group;
the nature of those businesses; and
any other matters that the Commissioner considers relevant,
that the business, or each of the businesses, carried on by the independent
person is carried on substantially independently of, and is not substantially
connected with the carrying on of, a business carried on by any other member
of that group, the Commissioner may, by order in writing served on the
independent person, exclude the independent person from, or deem the
independent person to have been excluded from, that group with effect from
such date, not being a date later than the date of the order, as is specified
in the order and, if the Commissioner does so, the Commissioner may specify in
the order such circumstances in relation to the making of the order as the
Commissioner considers appropriate.
"(2) The Commissioner shall not make an order under sub-section (1)
excluding a corporation from a group of which another corporation is or was a
member with effect from a date specified in the order if the first-mentioned
corporation is or was, by virtue of sub-section 7 (5) of the Companies Act
1981, related to the second-mentioned corporation for the purposes of that Act
on that date.
"(3) Where-
an order under sub-section (1) excluding a person from a group
specifies circumstances in relation to the making of the order; and
any of those circumstances changes in a material respect, the person
shall notify the Commissioner in writing within 7 days after that change.
"(4) A person who contravenes sub-section (3) is, in respect of each day on
which the person so contravenes that sub-section (including the day of a
conviction of an offence against this sub-section or a subsequent day), guilty
of an offence punishable on conviction by a fine not exceeding $50.
"(5) Where-
a person has been excluded from a group pursuant to an order under
sub-section (1); and
the Commissioner is no longer satisfied as mentioned in paragraph (1)
(b), the Commissioner may, by notice in writing served on the person, revoke
the order with effect from-
in a case to which paragraph (d) does not apply-the date of service of
the notice; or
in a case where-
the order specifies circumstances in relation to the making of the
order; and
the reason, or one of the reasons, for the revocation of the order
is a change in a material respect in any of those circumstances,
the date on which that change occurred or, if there are 2 or more such
changes, the date on which the earliest of those changes occurred.
Designated group employer
"21g. (1) The members of a group may lodge with the Commissioner a notice in
writing, in a form approved by the Commissioner, signed by or on behalf of
each member of the group, designating one of the members of the group to be
the designated group employer in respect of the group for the purposes of this
Act.
"(2) The designated member of the group commences to be the designated group
employer in respect of the group on the first day of-
the return period that last commenced before the date of lodgment of
the notice; or
such later return period as is specified in the notice.
"(3) The designated group employer in respect of a group ceases to be the
designated group employer in respect of that group on and from the first day
of the return period relating to the designated group employer during which-
the composition of the group alters; or
the members of the group lodge with the Commissioner a notice in
writing, signed by or on behalf of each of them who is known to the
Commissioner to be a member of the group, revoking the designation, whichever
first occurs.
"(4) A notice under paragraph (3) (b) lodged by the members of a group has
no effect unless-
before the notice is lodged, the Commissioner gives a written consent
to the lodgment; or
the members of the group, at the time the notice is lodged, lodge a
further notice under sub-section (1) designating another of the members of the
group to be the designated group employer.
Nominated deduction
"21h. (1) For the purpose of ascertaining the tax payable by a designated
group employer, there shall, subject to this section, be deducted, from the
amount of wages included in a return furnished in accordance with section 17
or 18, or from the amount of wages assessed by the Commissioner pursuant to
section 23, being an amount of wages payable during the return period that
last commenced before the date of lodgment of the notice under sub-section 21g
(1) designating the employer-
where the return or assessment relates to a period of one month-the
statutory amount;
where the return or assessment relates to a part of a month-the
amount calculated in accordance with the formula A B, where-
C
is the statutory amount;
is the number of whole days in that part of the month; and
is the whole number of days in the month; and
where the return or assessment relates to a period of more than a
month-the amount calculated in accordance with the formula
A B + A C, where-
D
is the statutory amount;
is the number of whole months in the period;
is the number of whole days in any part of a month included in the
period; and
is the number of days in the last-mentioned month.
"(2) For the purposes of sub-section (1), the statutory amount in relation
to a designated group employer is the amount specified in a nomination
referred to in sub-section (3) or, if there is no such nomination, nil.
"(3) A notice under sub-section 21g (1) may contain a nomination of the
amount (being an amount calculated in the manner specified in the form
approved for the purposes of that sub-section but not exceeding the relevant
amount as defined in sub-section 12 (9)) of the deduction claimed to be made
on behalf of the group by the designated group employer in respect of each
month.
"(4) The Commissioner may, at any time-
(a) on an application in writing signed by or on behalf of each person known
to the Commissioner to be a member of a group; or
(b) of the Commissioner's own motion, make a determination specifying an
amount, not exceeding the relevant amount as defined in sub-section 12 (9),
that may be claimed by the designated group employer in respect of that group
as the statutory amount, and the amount so specified shall, with effect from
such date as is specified in the determination (which may be a date earlier
than the date of the determination), notwithstanding any other provision of
this section, be deemed to be the statutory amount in relation to the
designated group employer.
"(5) The Commissioner shall, as soon as practicable after making a
determination under sub-section (4), cause notice in writing of the
determination to be served on the designated group employer concerned.
"(6) The Commissioner may, by notice in writing served on the designated
group employer concerned, revoke or vary a determination under sub-section (4)
with effect from such date as is specified in the notice (which may be a date
earlier than the date of the notice).
Annual adjustments
"21J. (1) This section applies in relation to a group at least one member of
which paid or was liable to pay taxable wages or interstate wages for the
whole of a financial year.
"(2) A reference in this section to the annual amount of tax paid or payable
by the members of a group in respect of a financial year is a reference to the
amount ascertained by applying the appropriate rate or rates of tax prescribed
by the Pay-roll Tax (Territories) Act 1971 to the amount calculated in
accordance with the formula A-B, where-
is the total amount of the taxable wages paid or payable by the members
of the group during the financial year; and
is so much of the deductible amount (if any) in relation to the group in
relation to the financial year as does not exceed the total amount of taxable
wages paid or payable by the members of the group during the financial year.
"(3) A reference in this section to the actual amount of tax paid or payable
in respect of a financial year by the members of a group is a reference to the
amount of tax referred to in section 10 that is payable by members of the
group in respect of taxable wages paid or payable during that year.
"(4) Where the actual amount of tax paid or payable in respect of a
financial year by the members of a group exceeds the annual amount of tax paid
or payable by the members of that group in respect of that year, the
Commissioner shall, upon application made before the end of the next
succeeding financial year by the person who is the designated group employer
in respect of the group on 30 June in the first-mentioned financial year-
refund to the person the amount of the excess; or
apply the amount of the excess against any liability of the person to
the Commonwealth, being a liability arising under, or by virtue of, this Act
or any other Act of which the Commissioner has the general administration, and
refund any part of the amount not so applied.
"(5) Where the annual amount of tax paid or payable in respect of a
financial year by the members of a group exceeds the actual amount of tax paid
or payable in respect of that year by the members of the group-
the person who is the designated group employer in respect of that
group on 30 June in that year; and
the members of the group who paid or were liable to pay taxable wages
during that year, are jointly and severally liable to pay, in addition to tax
referred to in section 10, tax equal to the amount of the excess, being tax in
respect of those wages.
Part-year adjustments
"21K. (1) This section applies in relation to a group at least one member of
which paid or was liable to pay taxable wages or interstate wages for a
continuous part of a financial year and no member of which paid or was liable
to pay any such wages during the whole of that year.
"(2) In this section, 'group period', in relation to a group, in relation to
a financial year, means a continuous part of a financial year for which at
least one member of the group paid or was liable to pay taxable wages or
interstate wages.
"(3) A reference in this section to the total amount of tax paid or payable
by the members of a group in respect of a group period in a financial year is
a reference to the amount ascertained by applying the appropriate rate or
rates of tax prescribed by the Pay-roll Tax (Territories) Act 1971 to the
amount calculated in accordance with the formula A-B, where-
is the total amount of the taxable wages paid or payable by the members
of the group during that period; and
is so much of the deductible amount in relation to the group in relation
to the financial year as does not exceed the total amount of taxable wages
paid or payable by the members of the group during the group period.
"(4) A reference in this section to the actual amount of tax paid or payable
in respect of a group period by the members of a group is a reference to the
amount of tax referred to in section 10 that is payable by members of the
group in respect of that period.
"(5) Where the actual amount of tax paid or payable in respect of a group
period in a financial year by the members of a group exceeds the total amount
of tax paid or payable by the members of that group in respect of that period,
the Commissioner shall, upon application made before the end of the next
succeeding financial year by the person who is the designated group employer
in respect of the group at the end of the group period-
refund to the person the amount of the excess; or
apply the amount of the excess against any liability of the person to
the Commonwealth, being a liability arising under, or by virtue of, this Act
or any other Act of which the Commissioner has the general administration, and
refund any part of the amount not so applied.
"(6) Where the total amount of tax paid or payable in respect of a group
period in a financial year by the members of a group exceeds the actual amount
of tax paid or payable in respect of that period by the members of the group-
the person who is the designated group employer in respect of that
group at the end of the group period; and
the members of the group who paid, or were liable to pay, taxable wages
during the group period, are jointly and severally liable to pay, in addition
to tax referred to in section 10, tax equal to the amount of the excess, being
tax in respect of those wages.".
TAXATION LAWS AMENDMENT ACT 1986No. 46, 1986
- SECT 38
Time for payment of tax
38. Section 22 of the Principal Act is amended-
by omitting from paragraph (3) (a) "and" (last occurring); and
by adding at the end of sub-section (3) the following paragraphs:
"(c) tax referred to in sub-section 21J (5) in respect of a financial year
is due and payable on the twenty-second day after the end of the financial
year; and
tax referred to in sub-section 21K (6) in respect of a period is due
and payable on the eighth day after the end of the period.".
TAXATION LAWS AMENDMENT ACT 1986No. 46, 1986
- SECT 39
Assessments
39. Section 23 of the Principal Act is amended by inserting after
sub-section (2) the following sub-section:
"(3) The Commissioner may make an assessment of the amount of-
tax referred to in section 15A;
tax referred to in sub-section 21J (5); or
tax referred to in sub-section 21K (6), payable by an employer.".
TAXATION LAWS AMENDMENT ACT 1986No. 46, 1986
- SECT 40
Regulations
40. Section 70 of the Principal Act is amended by omitting from paragraph
(1) (c) "16 (1)" and substituting "16 (1a)".
TAXATION LAWS AMENDMENT ACT 1986No. 46, 1986
- SECT 41
Application of amendments
41. The amendments made by this Part apply in relation to wages paid or
payable by an employer on or after the date of commencement of this section.
TAXATION LAWS AMENDMENT ACT 1986No. 46, 1986
- SECT 42
Principal Act
42. The Taxation Administration Act 1953*4* is in this Part referred to as
the Principal Act.
*4* No. 1, 1953, as amended. For previous amendments, see Nos. 28, 39, 40 and
52, 1953; No. 18, 1955; No. 39, 1957; No. 95, 1959; No. 17, 1960; No. 75,
1964; No. 155, 1965; No. 93, 1966; No. 120, 1968; No. 216, 1973; No. 133,
1974; No. 37, 1976; Nos. 19 and 59, 1979; Nos. 39 and 117, 1983; No. 123,
1984; Nos. 4, 47, 65, 104 and 123, 1985; and No. 41, 1986.
TAXATION LAWS AMENDMENT ACT 1986No. 46, 1986
- SECT 43
Interpretation
43. Section 8J of the Principal Act is amended by inserting in paragraph (2)
(p) "13G (1) (c) or" before "14I (1) (c)".
TAXATION LAWS AMENDMENT ACT 1986No. 46, 1986
- SECT 44
Principal Act
44. The Taxation (Interest on Overpayments) Act 1983*5* is in this Part
referred to as the Principal Act.
*5* No. 12, 1983, as amended. For previous amendments, see No. 123, 1984; Nos.
4, 47, 49 and 123, 1985; and No. 41, 1986.
TAXATION LAWS AMENDMENT ACT 1986No. 46, 1986
- SECT 45
Interpretation
45. Section 3 of the Principal Act is amended by inserting after paragraph
(c) of the definition of "decision to which this Act applies" in sub-section
(1) the following paragraph:
"(ca) in a case where the expression is used in relation to relevant tax of
a kind referred to in paragraph (a) of the definition of 'relevant tax'-a
decision of the Commissioner to amend an assessment made in relation to a
taxpayer reducing the liability of the taxpayer to tax, other than-
a decision to give effect to an application or request
by or on behalf of the taxpayer for an amendment of the assessment; or
a decision made in consequence of another decision of
the Commissioner to amend another assessment (whether of the taxpayer or of
another person), being another decision that was made to give effect to an
application or request by or on behalf of the taxpayer or the other person, as
the case may be, for the amendment of the other assessment;".
TAXATION LAWS AMENDMENT ACT 1986No. 46, 1986
- SECT 46
Amount of interest
46. Section 10 of the Principal Act is amended-
by inserting in sub-sub-paragraph (1) (a) (iii) (A) "and
sub-sub-paragraph (AA) does not apply" after "sub-section 3 (1)";
by inserting after sub-sub-paragraph (1) (a) (iii) (A) the following
sub-sub-paragraph:
"(AA) the relevant tax is relevant tax of a kind referred to in
paragraph
(a) of the definition of 'relevant tax' in sub-section 3 (1) and the decision
to which this Act applies is a decision of the kind referred to in paragraph
(ca) of the definition of 'decision to which this Act applies' in that
sub-section-1 July 1986;"; and
by omitting from sub-sub-paragraph (1) (a) (iii) (D)
"sub-sub-paragraphs (A), (B) and (C)" and substituting "the preceding
sub-sub-paragraphs".
TAXATION LAWS AMENDMENT ACT 1986No. 46, 1986
- SECT 47
Application of amendments
47. (1) The amendments made by sections 45 and 46 apply to-
assessments (not being amended assessments) made on or after 1 July
1986 in respect of income of the year of income that commenced on 1 July 1985
or of any subsequent year of income; and
the first and any subsequent amendment of such an assessment.
(2) Sub-section 170AA (6) of the Income Tax Assessment Act 1936 applies for
the purposes of sub-section (1) of this section.
TAXATION LAWS AMENDMENT ACT 1986No. 46, 1986 - SCHEDULE
SCHEDULE
Section 30
SCHEDULE TO BE ADDED AT END OF INCOME TAX (INTERNATIONAL AGREEMENTS) ACT 1953
"SCHEDULE 26
Section 3
AGREEMENT
BETWEEN
THE GOVERNMENT OF AUSTRALIA
AND
THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA
FOR
THE AVOIDANCE OF DOUBLE TAXATION OF INCOME AND REVENUES DERIVED BY AIR TRANSPORT
ENTERPRISES FROM INTERNATIONAL AIR TRANSPORT
The Government of Australia and the Government of the People's Republic of
China,
Desiring to conclude an Agreement for the avoidance of double taxation of income
and revenues derived by air transport enterprises from international air
transport,
Have agreed as follows:
ARTICLE 1
Taxes Covered
The taxes to which this Agreement shall apply are:
in the case of Australia:
the income tax imposed under the federal law of the Commonwealth of
Australia, including the additional tax upon the undistributed amount of the
distributable income of a private company;
in the case of the People's Republic of China:
the income tax concerning foreign enterprises; and
the consolidated industrial and commercial tax including any
additional tax on that tax,
and any identical or substantially similar taxes which are imposed after the
date of signature of this Agreement in addition to, or in place of, the taxes
referred to in sub-paragraph (a) or (b).
ARTICLE 2
General Definitions
(1) In this Agreement:
the terms 'Contracting State', 'one of the Contracting States' and 'other
Contracting State' mean Australia or the People's Republic of China, the
Governments of which have concluded this Agreement;
the term 'enterprise of one of the Contracting States' means an
enterprise that is designated, under an Agreement made between the Governments
of the Contracting States, to operate authorised scheduled air services between
those States and that has its place of effective management in Australia or in
the People's Republic of China; and
the term 'tax' means the taxes to which this Agreement applies by virtue
of Article 1 and which are imposed by Australia or by the People's Republic of
China,
as the context requires.
(2) In the application of this Agreement by a Contracting State, any term not
defined in this Agreement shall, unless the context otherwise requires, have the
meaning which it has under the laws of that State relating to the taxes to
which this Agreement applies.
ARTICLE 3
Air Transport Profits and Revenues
(1) Profits and revenues from the operation of aircraft, including sales of
tickets and documents relating to such operations, derived by an enterprise of
one of the Contracting States shall be exempt from tax in the other Contracting
State.
(2) Notwithstanding the provisions of paragraph (1), such profits and revenues
may be taxed in the other Contracting State where they are profits and revenues
derived from the carriage by aircraft of passengers, livestock, mail, goods
or merchandise solely from one place in that other Contracting State to another place in
that State.
(3) The provisions of paragraphs (1) and (2) shall apply in relation to the
share of the profits and revenues from the operation of aircraft derived by an
enterprise of one of the Contracting States through participation in a pool
service, in a joint transport operating organisation or in an international
operating agency.
ARTICLE 4
Entry Into Force
The Government of each of the Contracting States shall give to the Government
of the other Contracting State through the diplomatic channel written notice
of the completion of the procedures required by its law to give this Agreement
the force of law in Australia or in the People's Republic of China as the case
may be. This Agreement shall enter into force on the date of the later of
those notifications and thereupon shall have effect in respect of profits and
revenues derived on or after 1 July 1984.
ARTICLE 5
Termination
This Agreement shall continue in effect indefinitely but the Government of
either of the Contracting States may give to the Government of the other
Contracting State through the diplomatic channel six months prior written
notice of termination and, in that event, this Agreement shall cease to be
effective in relation to profits and revenues derived on or after 1 January in
the calendar year next following that in which that period of six months
expires.
IN WITNESS WHEREOF the undersigned, duly authorised thereto by their
respective Governments, have signed this Agreement.
DONE in duplicate at Beijing this twenty-second day of November one thousand
nine hundred and eighty-five in the English and Chinese languages, both texts
being equally authentic.
FOR THE GOVERNMENT OF
THE PEOPLE'S REPUBLIC OF CHINA
LIN RONGSHENG".
The
Act No. 46, 1986 amended as indicated in the Tables below.
Act | Number and year | Date of Assent | Date of commencement | Application, saving or transitional provisions |
46, 1986 | 24 June 1986 | |||
75, 2010 | 28 June 2010 | Schedule 6 (item 22): 29 June 2010 | — |
| |
Provision affected | How affected |
S. 26......................................... | rep. No. 75, 2010 |
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0
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