Bank Account Debits Tax Legislation Amendment Act 1983

Legislation au C2004A02827 Not in force Act

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Bank Account Debits Tax Legislation Amendment Act 1983

No. 110 of 1983

 

An Act to amend the law relating to the taxation of bank account debits

[Assented to 8 December 1983]

BE IT ENACTED by the Queen, and the Senate and the House of Representatives of the Commonwealth of Australia, as follows:

PART I—PRELIMINARY

Short title

1. This Act may be cited as the Bank Account Debits Tax Legislation Amendment Act 1983.

Commencement

2. This Act shall be deemed to have come into operation on 31 December 1982.

PART II— AMENDMENTS OF THE BANK ACCOUNT DEBITS TAX ADMINISTRATION ACT 1982

Principal Act

3. The Bank Account Debits Tax Administration Act 19821 is in this Part referred to as the Principal Act.


Interpretation

4. Section 3 of the Principal Act is amended—

(a) by omitting “in accordance with section 10” from paragraph (c) of the definition of “excluded debit” in sub-section (1) and substituting “by the bank with which the account is kept”; and

(b) by omitting “in accordance with sub-section 10 (3)” from paragraph (b) of the definition of “exempt debit” in sub-section (1) and substituting “for the purpose of recovering from the account holder an amount equal to an amount of tax that the bank has paid or is liable to pay”.

Liability to tax

5. Section 8 of the Principal Act is amended by omitting from sub-section (1) “the bank with which the account is kept is liable” and substituting “the bank with which the account is kept and the account holder or, if there are 2 or more account holders, those account holders are jointly and severally liable”.

When tax payable

6. Section 9 of the Principal Act is amended by omitting paragraph (a) and substituting the following paragraph:

“(a) where tax in respect of a taxable debit made during a month (whether or not that tax is the subject of an assessment) is payable under sub-section 8 (1), that tax shall be paid not later than 14 days after the end of that month; and”.

Recovery of tax by banks

7. Section 10 of the Principal Act is amended—

(a) by omitting from sub-section (1) “, or is liable to pay,”; and

(b) by adding at the end thereof the following sub-section:

“(4) Where a bank would, but for this section, have power to enter into an agreement or arrangement with the account holder or account holders of a taxable account kept with the bank under which the bank would be entitled to recover from the account holder or account holders, whether by debiting the account or otherwise, amounts equal to amounts of tax that the bank is or becomes liable to pay in respect of taxable debits that have been or are made to that account, nothing in this section prevents the bank from entering into such an agreement or arrangement.”.

Returns in respect of taxable debits

8. Section 12 of the Principal Act is amended by omitting from sub-section (4) “under this Act” (wherever occurring) and substituting “by virtue of sub-section 8 (2)”.

Refund of amounts incorrectly paid

9. Section 13 of the Principal Act is amended by omitting paragraph (2) (a) and substituting the following paragraph:

“(a) if the amount has been recovered by the bank from an account holder—by that account holder; or”.


Refunds for tax paid on excluded debts

10. Section 14 of the Principal Act is amended by omitting paragraph (2) (a) and substituting the following paragraph:

“(a) if the tax has been recovered by the bank that paid the tax from an account holder—by that account holder; or”.

Special assessments

11. Section 15 of the Principal Act is amended by omitting from sub-section (3) “by the bank”.

Default assessments

12. Section 16 of the Principal Act is amended—

(a) by omitting from sub-section (1) “by the bank”;

(b) by omitting from sub-section (2) “under this Act” and substituting “by virtue of sub-section 8 (2)”;

(c) by inserting “or account holders” in sub-section (2) after “account holder”; and

(d) by omitting from sub-section (3) “on the person or persons liable to pay the tax” and substituting—

“on—

(a) in a case to which sub-section (1) applies—the bank; or

(b) in a case to which sub-section (2) applies—the account holder.”.

Additional tax on default assessments

13. Section 17 of the Principal Act is amended by omitting paragraphs (2) (a) and (b) and substituting the following paragraphs:

“(a) additional tax is payable under this section by reason of an act of omission referred to in sub-section 16 (1); and

(b) a prosecution is instituted in respect of an offence against section 12 or sub-section 38 (2) in relation to that act or omission,”.

Amendment of assessments

14. Section 18 of the Principal Act is amended—

(a) by omitting from paragraph (3) (a) “in accordance with section 10”;

(b) by omitting from paragraph (3) (b) “in accordance with that section”; and

(c) by omitting from sub-section (5) “liable to pay the tax” and substituting “in respect of whom the amended assessment is made”.

PART III— AMENDMENT OF THE BANK ACCOUNT DEBITS TAX ACT 1982

Principal Act

15. The Bank Account Debits Tax Act 19822 is in this Part referred to as the Principal Act.


Imposition of tax

16. Section 4 of the Principal Act is amended by omitting from sub-paragraph (c) (ii) “or to avoid liability for payment of an amount under section 10 of the Bank Account Debits Tax Administration Act 1982 in respect of that tax”.

 

NOTES

1. No. 142, 1982.

2. No. 141, 1982.

Overview

The Bank Account Debits Tax Legislation Amendment Act 1983, enacted by the Commonwealth Parliament, addresses issues related to the taxation of bank account debits by amending the Bank Account Debits Tax Administration Act 1982. The Act came into operation on 31 December 1982, aiming to refine the liability, assessment, and recovery processes associated with bank account debits tax. It ensures that both the bank and account holders are jointly and severally liable for tax on debits, thereby enhancing accountability. Additionally, it modifies the framework for tax recovery by banks, allowing them to enter into agreements with account holders for tax recovery, and streamlines the process for refunds of incorrectly paid tax. The policy objective is to ensure clarity and fairness in the taxation process, reducing the potential for disputes and ensuring compliance.

Scope and Application

The Bank Account Debits Tax Legislation Amendment Act 1983 amends the Bank Account Debits Tax Administration Act 1982 and the Bank Account Debits Tax Act 1982. This legislation applies to banks and account holders in Australia, specifically addressing the liability and payment of tax on debits made from bank accounts. The Act extends its jurisdiction across the Commonwealth of Australia, thereby affecting financial institutions and their account holders nationwide. Notably, the Act imposes joint and several liability on banks and account holders for tax due on debits, and it outlines the conditions under which banks may recover tax amounts directly from account holders. The Act also specifies that certain assessments and amendments related to tax liabilities are governed by the provisions outlined in the Bank Account Debits Tax Administration Act 1982, thus ensuring a streamlined process for tax enforcement and recovery. Exclusions and exemptions within the Act are designed to prevent double taxation and ensure that tax liabilities are fairly distributed between the bank and the account holder.

Key Provisions

The Bank Account Debits Tax Legislation Amendment Act 1983 amends the Bank Account Debits Tax Administration Act 1982 and the Bank Account Debits Tax Act 1982, introducing several changes to the taxation of bank account debits. Under the amendments, the liability for tax shifts from solely the bank to jointly include the bank and account holders (Section 8). Tax must now be paid within 14 days after the end of the month in which the taxable debit occurs (Section 9). Banks are permitted to enter into agreements with account holders to recover tax amounts directly from them (Section 10). Refunds for amounts incorrectly paid or tax paid on excluded debits can now be claimed by account holders if the bank has recovered these amounts from them (Sections 13 and 14). Assessments, including default assessments and amendments, can now be issued against account holders in addition to banks (Sections 15, 16, and 18). Banks and account holders are jointly and severally liable for the payment of tax on debits made to accounts held with the bank (Section 8). Banks must ensure that tax is paid within 14 days after the end of each month in which a taxable debit is made (Section 9). Banks are allowed to enter into agreements with account holders to recover tax amounts directly from the account holders, whether through account debits or otherwise (Section 10). Account holders who have had amounts or tax recovered by the bank can seek refunds directly from the bank if they were the ones who originally paid the amounts or tax (Sections 13 and 14). Banks and account holders must comply with assessment and amendment processes, including default assessments and their subsequent amendments (Sections 15, 16, and 18). The Act imposes civil penalties for failure to comply with its provisions. For instance, if a bank or account holder fails to pay the tax within the stipulated time, they may be liable for additional tax as well as penalties (Section 17). Furthermore, failure to comply with the requirements for assessments, amendments, and refunds can result in financial penalties and possibly other legal consequences, such as prosecution for related offences (Sections 12, 15, 16, and 18). The exact nature and extent of the penalties depend on the specific provisions breached and the circumstances of each case.

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Area of Law
Taxation Law
Instrument
Act
Concepts
Definitions & Interpretation
Commencement Provisions
Repeal & Amendment
Liability to tax
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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.