Income Tax and Social Services Contribution Assessment Act 1964

Legislation au C1964A00046 Not in force Act

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INCOME TAX AND SOCIAL SERVICES CONTRIBUTION ASSESSMENT.

 

No. 46 of 1964.

An Act relating to the Taxation of the Incomes of certain Prospecting and Mining Companies and of Shareholders in those Companies.

[Assented to 28th May, 1964.]

BE it enacted by the Queen’s Most Excellent Majesty, the Senate, and the House of Representatives of the Commonwealth of Australia, as follows:—

Short title and citation.

1.—(1.) This Act may be cited as the Income Tax and Social Services Contribution Assessment Act 1964.

(2.) The Income Tax and Social Services Contribution Assessment Act 1936–1963 is in this Act referred to as the Principal Act.

(3.) The Principal Act, as amended by this Act, may be cited as the Income Tax and Social Services Contribution Assessment Act 1936–1964.

Commencement.

2. This Act shall come into operation on the day on which it receives the Royal Assent.

Dividends.

3. Section forty-four of the Principal Act is amended by inserting after sub-section (2b.) the following sub-section:—

“(2c.) Where—

(a) a company has duly lodged a declaration under subsection (3.) of section seventy-seven aa of this Act specifying moneys paid on shares in the company and declaring that the company has expended, or proposes to expend, those moneys upon mining or prospecting outgoings as defined by sub-section (1.) of that section;

(b) the Commissioner is satisfied that any of the moneys specified in the declaration were expended upon mining or prospecting outgoings, as so defined, incurred in relation to a particular area in Australia or in the Territory of Papua and New Guinea;


(c) since the incurring of that expenditure, the company has sold, transferred or assigned rights to mine in that area; and

(d) income derived by the company from the sale, transfer or assignment is exempt from income tax by reason of paragraph (p) of section twenty-three of this Act,

the amount of that income shall, for the purposes of paragraph (a) of sub-section (2.) of this section, be deemed to be reduced by an amount equal to the amount of the moneys specified in the declaration as to which the Commissioner is so satisfied.”.

Moneys paid on shares for the purposes of petroleum exploration.

4. Section seventy-seven a of the Principal Act is amended—

(a) by inserting after sub-section (17.) the following subsections:—

“(17a.) Where the Commissioner is satisfied that any moneys that have been specified in a declaration lodged by a company under sub-section (3.) or subsection (6.) of this section were paid by a person in pursuance of an agreement or arrangement made in connexion with the purchase by the company or by another company of a petroleum prospecting or mining right, petroleum prospecting or mining information or shares in a company holding such a right or possessing such information, the Commissioner may inform the company, by notice in writing given for the purposes of this sub-section, that he is so satisfied and, upon the company being so informed—

(a) a deduction in respect of the amount of the moneys shall not be allowable, and shall be deemed not to have been allowable, under sub-section (4.) or sub-section (10.) of this section from assessable income derived by the person; and

(b) the declaration shall, for the purposes of Division 10aa of this Part, be deemed not to have specified the moneys.

“(17b.) For the purposes of the last preceding sub-section, every company that beneficially owns shares in a company that holds a petroleum prospecting or mining right or possesses petroleum prospecting or mining information (including a company that is, by virtue of any application or applications of this subsection, deemed to hold a petroleum prospecting or mining right or to possess petroleum prospecting or mining information) shall be deemed to hold that right or possess that information, as the case may be.”; and


(b) by omitting from sub-section (18.) the words “One thousand nine hundred and sixty-four” and inserting in their stead the words “One thousand nine hundred and sixty-seven”.

Moneys paid on shares for the purposes of certain mining or prospecting.

5. Section seventy-seven aa of the Principal Act is amended—

(a) by inserting after the definition of “mining company” in sub-section (1.) the following definition:—

“‘mining or prospecting information’ means geological, geophysical or technical information, being information that relates to the presence, absence or extent of deposits of prescribed minerals in an area or is likely to be of assistance in determining the presence, absence or extent of such deposits in an area, and has been obtained from mining or prospecting for prescribed minerals;”;

(b) by adding at the end of the definition of “mining or prospecting outgoings” in sub-section (1.) the words but does not include expenditure of the company in the acquisition of a mining or prospecting right or mining or prospecting information”;

(c) by inserting after the definition of “mining or prospecting outgoings” in sub-section (1.) the following definition:—

“‘mining or prospecting right’ means an authority, licence, permit or right to mine or prospect for prescribed minerals in a particular area in Australia, or a lease of land in Australia by virtue of which the lessee is entitled to mine or prospect for prescribed minerals on the land, and includes an interest in such an authority, licence, permit, right or lease;”;

(d) by inserting after sub-section (8.) the following subsections:—

“(8a.) Where the Commissioner is satisfied that any moneys that have been specified in a declaration lodged by a company under sub-section (3.) of this section were paid by a person in pursuance of an agreement or arrangement made in connexion with the purchase by the company or by another company of a mining or prospecting right, mining or prospecting information or shares in a company holding such a right or possessing such information, the Commissioner may inform the company, by notice in


writing given for the purposes of this sub-section, that he is so satisfied and, upon the company being so informed, a deduction in respect of the amount of the moneys shall not be allowable, and shall be deemed not to have been allowable, under sub-section (4.) of this section from assessable income derived by the person.

“(8b.) For the purposes of the last preceding subsection, every company that beneficially owns shares in a company that holds a mining or prospecting right or possesses mining or prospecting information (including a company that is, by virtue of any application or applications of this sub-section, deemed to hold a mining or prospecting right or to possess mining or prospecting information) shall be deemed to hold that right or possess that information, as the case may be.”; and

(e) by omitting from sub-section (9.) the words “One thousand nine hundred and sixty-four” and inserting in their stead the words “One thousand nine hundred and sixty-seven”.

Reduction of certain allowable deductions.

6. Section one hundred and twenty-four da of the Principal Act is amended by inserting in sub-section (3.), after the words “under sub-section (5.)” the words “or sub-section (8a.)”.

Amendment of assessments.

7. Section one hundred and seventy of the Principal Act is amended by omitting from sub-section (10.) the words “subsection (5.) of section seventy-seven aa” and inserting in their stead the words “section seventy-seven aa”.

Application of amendments.

8.—(1.) The amendment made by section three of this Act applies to assessments in respect of income of the year of income that commences on the first day of July, One thousand nine hundred and sixty-four, and in respect of income of all subsequent years of income.

(2.) The amendments made by paragraph (a) of section four, paragraphs (a), (b), (c) and (d) of section five and sections six and seven of this Act apply in relation to moneys paid on shares after the commencement of this Act.

 

Overview

The Income Tax and Social Services Contribution Assessment Act 1964 was enacted to address specific tax implications arising from the income of prospecting and mining companies, as well as shareholders in such companies. This Act, enacted by the Queen’s Most Excellent Majesty, the Senate, and the House of Representatives of the Commonwealth of Australia, was designed to amend the Income Tax and Social Services Contribution Assessment Act 1936–1963. It introduces provisions that allow for the adjustment of tax assessments in relation to dividends from companies engaged in prospecting or mining activities, particularly focusing on ensuring that expenditures on mining or prospecting outgoings are appropriately accounted for in tax calculations. The policy objective of this Act is to provide a more accurate reflection of the financial activities of companies involved in mining and prospecting, ensuring that tax assessments are fair and reflect the true economic activities of these entities.

Scope and Application

The Income Tax and Social Services Contribution Assessment Act 1964 amends the Income Tax and Social Services Contribution Assessment Act 1936–1963 to introduce specific provisions relating to the taxation of incomes of prospecting and mining companies, as well as shareholders in those companies. This Act applies to companies engaged in prospecting or mining activities within Australia or in the Territory of Papua and New Guinea, and it also pertains to shareholders in these companies. It provides detailed rules for the deduction of certain expenditures related to mining or prospecting activities, specifically targeting expenditures on shares that are used for mining or prospecting activities in Australia or Papua and New Guinea. The Act extends to the assessment of dividends where companies have declared expenditure on mining or prospecting activities. The amendments also apply to moneys paid on shares for petroleum exploration purposes, prohibiting deductions for these amounts if they are associated with the acquisition of petroleum prospecting or mining rights or information. The Act's application is extended through subordinate instruments, which may provide further clarifications or specific regulations regarding the implementation of these provisions.

Key Provisions

The Income Tax and Social Services Contribution Assessment Act 1964 (C1964A00046) amends the Principal Act to introduce specific provisions concerning the taxation of income for certain prospecting and mining companies and their shareholders. Section 3 of the Act amends section forty-four of the Principal Act to deem income from the sale or transfer of mining rights to be reduced by amounts previously declared as expenditure on mining or prospecting activities, provided that the expenditure was incurred in Australia or Papua and New Guinea and the income derived from the sale is exempt from income tax. Section 4 introduces provisions for the disallowance of deductions in respect of moneys paid on shares for petroleum prospecting or mining rights, if the Commissioner is satisfied that these payments were made in connection with such rights. Section 5 extends similar provisions to moneys paid on shares for mining or prospecting rights, defining "mining or prospecting information" and "mining or prospecting right," and disallowing deductions for these payments. Section 6 amends section one hundred and twenty-four da of the Principal Act to include these disallowances in the list of deductions that may be reduced under certain conditions. Section 7 amends section one hundred and seventy of the Principal Act to ensure assessments are correctly adjusted in accordance with these new provisions. The Act imposes obligations on companies involved in mining or prospecting activities to declare and substantiate any expenditure on such activities when lodging their tax returns. These companies must ensure that any payments made in connection with the purchase of shares or rights are properly accounted for and disclosed. The Commissioner of Taxation is required to review these declarations and inform the companies if any disallowance applies. Companies must then adjust their tax assessments accordingly, reflecting the reduced income from the sale or transfer of rights. Failure to comply with the provisions of this Act, including the failure to declare or accurately report expenditure on mining or prospecting activities, may result in disallowance of deductions, which can significantly increase the tax liability of the company. The Act does not explicitly outline specific offences or penalties for non-compliance, but the implications of incorrect reporting could lead to audits, penalties for underpaid taxes, and interest on unpaid taxes. The maximum penalties for tax-related offences would be determined by the general provisions of the Income Tax Assessment Act 1936, which could include fines and imprisonment for serious or persistent non-compliance.

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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.