Commonwealth Entities (Payment Surcharges) Tax (Imposition) Act 2024
No. 102, 2024
An Act to impose a tax relating to payment surcharges, and for related purposes
Contents
1 Short title
2 Commencement
3 Definitions
4 Imposition
5 Amount of tax
6 Severability
Commonwealth Entities (Payment Surcharges) Tax (Imposition) Act 2024
No. 102, 2024
An Act to impose a tax relating to payment surcharges, and for related purposes
[Assented to 2 December 2024]
The Parliament of Australia enacts:
1 Short title
This Act is the Commonwealth Entities (Payment Surcharges) Tax (Imposition) Act 2024.
2 Commencement
(1) Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.
Commencement information |
Column 1 | Column 2 | Column 3 |
Provisions | Commencement | Date/Details |
1. The whole of this Act | The day after this Act receives the Royal Assent. | 3 December 2024 |
Note: This table relates only to the provisions of this Act as originally enacted. It will not be amended to deal with any later amendments of this Act.
(2) Any information in column 3 of the table is not part of this Act. Information may be inserted in this column, or information in it may be edited, in any published version of this Act.
3 Definitions
In this Act:
Consequential Provisions Act means the Commonwealth Entities (Payment Surcharges) (Consequential Provisions and Other Matters) Act 2024.
4 Imposition
Tax payable under subitem 5(1) of Schedule 2 to the Consequential Provisions Act is imposed.
5 Amount of tax
The amount of the tax is equal to the amount the Commonwealth, or a Commonwealth entity, is liable to pay to a person as mentioned in paragraph 5(1)(b) of Schedule 2 to the Consequential Provisions Act.
6 Severability
(1) This section applies in relation to a payment if:
(a) subparagraph 5(1)(a)(i) of Schedule 2 to the Consequential Provisions Act applies to the payment; and
(b) apart from this section, section 4 of this Act would impose a tax in relation to the payment; and
(c) the imposition of the tax in relation to the payment would exceed the legislative power of the Commonwealth.
(2) Section 4 of this Act has effect as if it did not impose that tax in relation to the payment.
[Minister’s second reading speech made in—
House of Representatives on 25 November 2024
Senate on 27 November 2024]
Overview
The Commonwealth Entities (Payment Surcharges) Tax (Imposition) Act 2024 was enacted by the Parliament of Australia to address the gap in revenue collection related to surcharges imposed by Commonwealth entities on payments. Assented to on 2 December 2024 and commencing on 3 December 2024, the Act aims to impose a tax on these surcharges, aligning with the broader policy objective of ensuring a fair and transparent revenue mechanism. The Act defines key terms and specifies the amount of tax imposed, which is equivalent to the surcharges paid by the Commonwealth or its entities to certain persons as outlined in the Consequential Provisions Act 2024. The Act includes provisions for severability, ensuring that any tax imposition exceeding the legislative power of the Commonwealth is nullified, thereby maintaining the integrity of the tax framework.
Scope and Application
The Commonwealth Entities (Payment Surcharges) Tax (Imposition) Act 2024 applies to the imposition of a tax on payments that are subject to surcharges, as outlined in the Commonwealth Entities (Payment Surcharges) (Consequential Provisions and Other Matters) Act 2024. The Act applies to Commonwealth entities and any person or entity involved in transactions with these entities where a surcharge is applicable. The tax is imposed on the amount that the Commonwealth or a Commonwealth entity is liable to pay to a person, as specified in the Consequential Provisions Act. The legislation has a national reach, as it pertains to Commonwealth entities operating across Australia. The tax amount is directly linked to the surcharge payable, and the Act includes provisions for severability to ensure that any tax imposed does not exceed the legislative power of the Commonwealth. The Act came into force on 3 December 2024, the day after receiving Royal Assent.
Key Provisions
The Commonwealth Entities (Payment Surcharges) Tax (Imposition) Act 2024 (the Act) imposes a tax on payments that meet specific criteria as outlined in the Consequential Provisions Act. Section 4 of the Act states that tax is payable under subitem 5(1) of Schedule 2 to the Consequential Provisions Act. The amount of the tax is determined by the amount the Commonwealth, or a Commonwealth entity, is liable to pay to a person as specified in paragraph 5(1)(b) of Schedule 2 to the Consequential Provisions Act, as indicated in section 5 of the Act.
The Act imposes certain obligations on the parties involved. It requires that the tax be paid as stipulated under the Consequential Provisions Act. This includes the Commonwealth or a Commonwealth entity paying the tax to a person, as mentioned in paragraph 5(1)(b) of Schedule 2 to the Consequential Provisions Act. The Act also provides that if the imposition of the tax would exceed the legislative power of the Commonwealth, the tax is not imposed, as outlined in section 6 of the Act.
The Act provides for civil and criminal consequences for breaches of its provisions. The specific offences, penalties, or consequences are detailed in the Consequential Provisions Act. However, the Act itself does not specify the maximum penalties for breaches. The severability clause in section 6 ensures that if the imposition of the tax in relation to a payment would exceed the legislative power of the Commonwealth, the tax is not imposed on that payment. This protects the integrity of the legislative framework and ensures compliance with constitutional limits.