War-time (Company) Tax Assessment Act 1940 (Cth)
WAR-TIME (COMPANY) TAX ASSESSMENT.
An Act relating to the Imposition, Assessment and Collection of a War-time Tax upon Companies.
[Assented to 17th December, 1940.]
[Date of commencement, 14th January, 1941.]
BE it enacted by the King’s Most Excellent Majesty, the Senate, and the House of Representatives of the Commonwealth of Australia, as follows:—
Part I.—Preliminary.
Part I.—Preliminary.
Part II.—Administration.
Part III.—Liability to Taxation.
Part IV.—Percentage Standard.
Part V.—Capital.
Part VI.—Returns and Assessments.
Part VII.—Application of Income Tax Assessment Act.
Part VIII.—Miscellaneous.
“accounting period” means—
(
a ) in the case of a company which in pursuance of the Income Tax Assessment Act has adopted or is deemed to have adopted an accounting period as its year of income for the purposes of that Act—the accounting period so adopted, or deemed to have been adopted, in lieu of the financial year next preceding the year of tax; or(
b ) in any other case—the financial year next preceding the year of tax;“Board of Referees” means a Board of Referees constituted under this Act;
“Board of Review” means a Board of Review constituted under the Income Tax Assessment Act;
“business” includes any profession or trade carried on or carried out by a company and any transaction in the course of carrying on or carrying out any profit making undertaking or scheme by a company and the making of or dealing in investments;
“capital employed” means the capital of a company employed in Australia or in a Territory of the Commonwealth in gaining or producing the taxable profit;
“company” includes all bodies or associations corporate or unincorporate, but does not include partnerships;
“holding company” means a company which controls, or is in a position to control, any other company (which other company is in this definition referred to as “the subsidiary company”) either by virtue of its shareholdings in the subsidiary company or indirectly through another company, or by virtue of any agreement, express or implied, and which would be entitled to receive, either directly or indirectly, more than one-half of the profits earned by the subsidiary company during the accounting period if those profits were distributed;
“income tax” means the income tax imposed as such by any Act but does not include any tax assessed under the provisions of Part IIIa. of the Income Tax Assessment Act;
“Income Tax Assessment Act” means the
Income Tax Assessment Act 1936–1940;“person” includes a company;
“subsidiary company” means a company which a holding company controls or is in a position to control as specified in the definition of “holding company”;
“taxable profit” means the amount remaining after deducting from the taxable income of the accounting period as assessed under the Income Tax Assessment Act—
(
a ) the income tax payable in respect of that taxable income;(
b ) so much of any dividend received by a company in respect of its shareholdings in any other company as is included in the taxable income of that first-mentioned company of the accounting period; and(
c ) in the case of the first accounting period of a company where that first accounting period is also the first year of income of the company under the Income Tax Assessment Act. any tax payable under the law of any State on the income derived by that company during that accounting period;“the Commissioner” means the Commissioner of Taxation;
“trading stock” includes anything produced, manufactured, acquired or purchased for purposes of manufacture, sale or exchange, and also includes live stock, other than animals used as beasts of burden or working beasts by a company which is not a primary producer;
“war-time (company) tax’’ means the tax assessed under this Act;
“year of tax” means the financial year for which the war-time (company) tax is levied.
Part II.—Administration.
(2.) The person for the time being holding office
as Commissioner of Taxation under the
(2.) Any person for the
time being holding office as Second Commissioner of Taxation under the
(2.) Where in this Act the exercise of any power or function by the Commissioner or the operation of any provision of this Act is dependent upon the opinion, belief or state of mind of the Commissioner in relation to any matter, that power or function may be exercised by the Second Commissioner or that provision may operate (as the case may be) upon the opinion, belief or state of mind of the Second Commissioner in relation to that matter.
(3.) Nothing in this section shall be deemed to confer upon the Second Commissioner any power or function of the Commissioner under sub-section (1.) of section five, or under section nine or eleven of this Act or to prevent the exercise of any power or function by the Commissioner under this Act, and the Commissioner shall have, in relation to any act of the Second Commissioner, the same power as if that act were done by himself.
(2.) Every delegation under this section shall be revocable at will, but any delegation shall not prevent the exercise of any power or function by the Commissioner.
(3.) Any delegation under this section may be made subject to a power of review and alteration, within the period specified in the instrument of delegation, by the Commissioner of any act done in pursuance of the delegation and the decision given upon any such review or alteration shall be deemed to be that of the Commissioner.
(
a ) in respect of matters as to which the Second Commissioner has exercised any power or function conferred upon him by this Act—a reference to the Second Commissioner; and(
b ) in respect of matters as to which a Deputy Commissioner has exercised any power or function conferred upon him by delegation under this Act—a reference to that Deputy Commissioner.
(2.) In the report the Commissioner shall draw attention to any breaches or evasions of this Act which have come under his notice.
(2.) Subject to this section, an officer shall not either directly or indirectly, except in the performance of any duty as an officer, and either while he is, or after he ceases to be an officer, make a record of, or divulge or communicate to any person any such information so acquired by him.
(3.) An officer shall not be required to produce in Court any return, assessment or notice of assessment, or to divulge or communicate to any Court any matter or thing coming under his notice in the performance of his duties as an officer, except when it is necessary to do so for the purpose of carrying into effect the provisions of this Act.
(4.) Nothing in this section shall be deemed to prohibit the Commissioner, Second Commissioner, or a Deputy Commissioner, or any person thereto authorized by him, from communicating any information to a Board of Review or to a Board of Referees.
(5.) Any person to whom information is communicated under the last preceding sub-section, and any person or employee under his control shall, in respect of that information, be subject to the same rights, privileges, obligations and liabilities, under sub-sections (2.) and (3.) of this section, as if he were an officer.
(6.) Any officer shall, if and when required by the Commissioner, Second Commissioner or a Deputy Commissioner to do so, make an oath or declaration, in the manner and form prescribed, to maintain secrecy in conformity with the provisions of this section.
Penalty: Two hundred and fifty pounds or imprisonment for twelve months.
Part III.—Liability to Tax.
(
a ) a private company as defined in section one hundred and three of the Income Tax Assessment Act;(
b ) a co-operative company as defined in section one hundred and seventeen of the Income Tax Assessment Act;(
c ) a life assurance company—(i) the profits of which are divisible only among the policy holders; or
(ii) the income of which of the accounting period is exempt from income tax by reason of section one hundred and sixteen of the Income Tax Assessment Act;
(
d ) a company (not being a company carrying on the business of financing time payments, instalments or hire purchase sales, or of providing cash orders) in which little or no capital is required, to the extent to which the Commissioner is satisfied that its profit arises from commissions, fees or charges for services rendered; and(
e ) a company (not being a subsidiary company) the taxable profit of which for the accounting period does not exceed One thousand pounds.
(
a ) where the company has had four or more accounting periods immediately preceding that accounting period—of such of the four immediately preceding accounting periods as are accounting periods during which the company has derived assessable income within the meaning of the Income Tax Assessment Act, arrived at in the manner prescribed by this Act for the ascertainment of taxable profit; or(
b ) in any other case—of such of the immediately preceding accounting periods during which the company has derived assessable income within the meaning of the Income Tax Assessment Act, arrived at in the manner prescribed by this Act for the ascertainment of taxable profit.
(2.) For the purposes of this section—
“accounting periods” includes any periods prior to the first accounting period to which this Act applies treated as years of income for the purposes of the
Income Tax Assessment Act 1936 or that Act as amended from time to time;“primary producer” means a company the greater part of the capital of which is employed in the business of primary production; and
“primary production” has the same meaning as in the Income Tax Assessment Act.
(2.) For the purposes of this section, “net premium” and “term of the lease” shall have the same meaning as in section eighty-three of the Income Tax Assessment Act.
(2.) Any election made under this section in respect of an accounting period shall also apply to every subsequent accounting period and shall not be revoked without the consent of the Commissioner.
(3.) Notwithstanding anything contained in the foregoing provisions of this section, if the holding company fails to pay the war-time (company) tax within the prescribed time (or within such further time as the Commissioner allows), the Commissioner may treat the election as void and proceed to make an assessment in respect of each of the subsidiary companies.
(
a ) the amount of that tax; or(
b ) the amount of any tax imposed by any Act, imposing a tax upon incomes, as a super-tax on any part of the taxable income derived by that company during that accounting period, after deducting therefrom the amount of any rebate allowed or allowable under sub-section (2a.) of section forty-six of the Income Tax Assessment Act,
whichever is the lesser amount.
Part IV.—Percentage Standard.
(2.) In calculating the percentage standard of a company which carries on a class of business in respect of which a greater statutory percentage has been prescribed under the last preceding sub-section—
(
a ) where the Commissioner is of the opinion that the whole of the capital employed by that company is employed in carrying on that class of business—the greater statutory percentage so prescribed shall be applied to the whole of that capital; or(
b ) where the Commissioner is of the opinion that a part only of the capital employed by that company is employed in carrying on that class of business—the greater statutory percentage so prescribed shall be applied to that part of the capital and the statutory percentage prescribed by the last preceding section shall be applied to the remainder of the capital.
(2.) A Board of Referees shall be constituted by three persons appointed by the Governor-General on such terms and conditions as are prescribed.
(3.) A Board of Referees shall have such powers relating to the taking of evidence, the summoning of witnesses and the production of documents as are prescribed.
(4.) A Board of Referees shall inquire into and report to the Minister on every class of business referred to it by the Commissioner as to whether there is some unavoidable condition associated with that class of business which makes it just that a greater statutory percentage than that prescribed by section twenty of this Act should be prescribed and, if so, shall include in the report a recommendation as to the statutory percentage which, in the opinion of the Board, is just.
(5.) Any company which carries on a particular class of business, or any organization representing companies carrying on such a class of business, may submit to the Commissioner a statement in writing claiming that some unavoidable condition associated with that class of business makes it just that a greater statutory percentage than that prescribed by section twenty of this Act should be prescribed and the Commissioner shall refer the claim to a Board of Referees.
(2.) The Commissioner shall refer any such claim to a Board of Referees.
(3.) The Board may determine whether it is just that in respect of the accounting period in which the taxable profit is claimed to be abnormally large, a greater statutory percentage than that applicable to other companies should be applied to the company making the claim and, if so, the greater statutory percentage which the Board thinks just.
(4.) Where the Board of Referees so determines, the greater statutory percentage which the Board thinks just shall, in lieu of the statutory percentage prescribed by or under this Act, be the statutory percentage to be applied to the capital employed by the company during the accounting period in which the taxable profit is abnormally large.
Part V.—Capital.
(
a ) the capital paid up in money or by other valuable consideration, averaged over the accounting period;(
b ) accumulated profits, averaged over the accounting period, including amounts standing to the credit of the Profit and Loss Account at the commencement of the accounting period but not including any profit of the accounting period;(
c ) any reserve, averaged over the accounting period, which has been created out of premiums received on the issue of shares;(
d ) the amount by which the value prescribed by sub-section (2.), (3.) or (4.) of this section as the value of any asset to which that sub-section applies exceeds the value of that asset as appearing in the accounts of the company at the commencement of the accounting period or, if no such value appears in the accounts of the company at the commencement of the accounting period, the amount prescribed by that sub-section; and(
e ) in the case of a life assurance company, the excess (if any) of reserves for liabilities over the amount ascertained as the “calculated liabilities” for the purposes of section one hundred and fourteen of the Income Tax Assessment Act,
and deducting therefrom—
(i) the amount by which the value of any asset to which sub-section (2.), (3.) or (4.) of this section applies as appearing in the accounts of the company at the commencement of the accounting period exceeds the value of that asset prescribed by that sub-section;
(ii) any capital, averaged over the accounting period, the income (if any) from which is not or would not be taken into account in assessing the income of the accounting period under the Income Tax Assessment Act; and
(iii) any capital, averaged over the accounting period, invested in shareholdings in any other company.
(2.) For the purposes of the last preceding sub-section, the value of any of the following assets shall be—
(
a ) where the asset is trading stock—the value at which that trading stock is taken into account at the commencement of the accounting period for the purpose of ascertaining the taxable income by reference to which the taxable profit is ascertained;(
b ) where the asset is one in respect of which depreciation has been allowed or is allowable under the Income Tax Assessment Act—the depreciated value of such asset (as determined for income tax purposes) as at the commencement of the accounting period;(
c ) where the asset is land, premises or machinery in respect of which the company has paid any premium and of which it is, in the accounting period, the lessee—the amount remaining after deducting from the premium so paid the total of the amounts of deductions allowed to the company in respect of the premium in assessments for income tax purposes under the Income Tax Assessment Act and any previous law of the Commonwealth for the financial years prior to the year of tax;(
d ) where the asset is one in respect of which depreciation is not allowable under the Income Tax Assessment Act (not being land, premises or machinery in respect of which the company has paid a premium and of which it is, in the accounting period, the lessee) and which was purchased by the company—the cost of such asset; and(
e ) where the asset is—(i) goodwill;
(ii) a right in or under any copyright, letters patent, design, trade mark, trade name or secret process; or
(iii) any other prescribed asset to which the foregoing provisions of this sub-section do not apply,
which has not been purchased by the company—nil.
(3.) Where since the first day of July, One thousand nine hundred and thirty-eight, assets have been transferred to a company in which the shares are wholly or mainly held by or on behalf of the previous owner of the assets, the value of those assets shall, for the purposes of sub-section (1.) of this section, be—
(
a ) in respect of those assets on which depreciation has been allowed or is allowable to the company under the Income Tax Assessment Act—the depreciated value of the assets (as determined for income tax purposes) as at the commencement of the accounting period; or(
b ) in respect of all other assets—the value at which the assets would have been taken into account in determining the capital employed by the previous owner if the assets had not been transferred and the previous owner had been a company liable to be assessed under this Act.
(4.) Where assets of a company are transferred to another company and the shares in each company are held by or on behalf of substantially the same shareholders, the value of the assets transferred shall, for the purposes of sub-section (1.) of this section, be the value at which those assets would have been taken into account in determining the capital of the previous owner if the assets had not been transferred.
(5.) Where for the purposes of this section it is necessary to determine the purchase price of any asset and any contract of sale in respect of that and other assets does not indicate what portion of the purchase price is attributable to that asset, the Commissioner may determine what portion of the total purchase price should, for the purposes of this section, be attributed to that asset.
(6.) Where the amount of capital employed by a company (not being a subsidiary company) during the accounting period is less than Twelve thousand five hundred pounds, or where a company fails to supply any information required by the Commissioner for the ascertainment of its capital employed, the amount of Twelve thousand five hundred pounds shall, subject to section twenty-five of this Act, be deemed to be the amount of capital employed for all the purposes of this Act.
(
a ) that the amount so ascertained does not represent the true capital employed by it in the business carried on by it; or(
b ) that the company requires little or no capital in the conduct of its business and its profits are mainly due to the personal skill, ability or enterprise of its shareholders.
(2.) The Commissioner shall refer any such application to a Board of Referees.
(3.) The Board of Referees may determine such greater amount as it thinks just to be the capital employed or deemed to be employed by the company or may refuse the application.
(4.) Where the Board of Referees so determines, the greater amount shall be treated as the capital employed by the company for all the purposes of this Act.
(5.) For the purposes of this section, a Board of Referees shall have all the powers prescribed under sub-section (3.) of section twenty-two of this Act.
Part VI.—Returns and Assessments.
Part VII.—Application of Income Tax Assessment Act.
(
a ) in section one hundred and sixty-seven the reference to the last preceding section of the applied Act were a reference to section thirty of this Act;(
b ) in section one hundred and sixty-eight the words “accounting period” were substituted for the word “year” (wherever it occurs) in sub-section (1.) and for the words “year of income” occurring in sub-section (2.);(
c ) in section one hundred and seventy the words “accounting period” were substituted for the word “year” (wherever that word occurs);(
d ) in sections two hundred and fifteen and two hundred and nineteen the words “company not resident in Australia” were substituted for the word “non-resident” (wherever that word occurs);(
e ) from sub-section (1.) of section two hundred and fifty-two the words “if it has not appointed a public officer before the commencement of this Act” and sub-section (2.) of that section were omitted;(
f ) in section two hundred and fifty-five the words “company not resident in Australia” were substituted for the word “non-resident” (wherever that word occurs) and as if in sub-section (1.) of that section the word “which” were substituted for the word “who” (wherever that word occurs); and(
g ) in sub-section (1.) of section two hundred and sixty-five, after the word “hardship”, there were inserted the words “, or that owing to the total amount of Commonwealth and State taxes payable in respect of the income or profit of an accounting period the exaction of the full amount of tax will entail serious hardship”.
(2.) Any reference in this Act to “this Act” shall be construed as including a reference to the provisions of the Income Tax Assessment Act applied by this section.
Part VIII.—Miscellaneous.
(
a ) that proportion of the tax paid or payable by the company which the excess bears to the amount remaining after deducting from the taxable profit the percentage standard; or(
b ) the amount of tax so paid or payable,
whichever is the lesser amount.
(2.) The agreement relating to any such arrangement may make provision for any other matters necessary or convenient to be provided for carrying out the arrangement.
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