Income Tax Assessment Amendment Act 1983
No. 14 of 1983
TABLE OF PROVISIONS
Section
1. Short title, &c.
2. Commencement
3. Exemption of certain film income
4. Certain items of assessable income
5. Certain film proceeds included in assessable income
6. Interpretation
7. Calculation of taxable income
8. Divisible amounts of assessable income
9. Divisible deductions
10. Special depreciation on property used for storage of grain, hay or fodder
11. Limit on cost price for depreciation of motor vehicle
12. Special depreciation on plant
13. Special depreciation on property used for primary production
14. Special depreciation on property used for basic iron or steel production
15. Insertion of new section—
57al. Special depreciation on property acquired or constructed after 19 July 1982
16. Film losses
17. Beneficiary not under any legal disability
18. Liability of trustee
19. Insertion of new section—
98a. Non-resident beneficiaries assessable in respect of certain income
20. Purchase of mining or prospecting right or information
21. Deduction of residual previous capital expenditure
22. Deduction of residual capital expenditure
23. Residual (1 May 1981 to 18 August 1981) capital expenditure
24. Deduction of residual (1 May 1981 to 18 August 1981) capital expenditure
TABLE OF PROVISIONS—continued
Section
25. Residual (19 August 1981 to 19 July 1982) capital expenditure
26. Deduction of residual (19 August 1981 to 19 July 1982) capital expenditure
27. Insertion of new section—
122dg. Deduction of allowable (post 19 July 1982) capital expenditure
28. Deductions not allowable under other provisions
29. Election in relation to expenditure incurred after 17 August 1976
30. Purchase of prospecting or mining rights or information
31. Deduction of residual previous capital expenditure
32. Deduction of residual capital expenditure
33. Deduction of residual (1 May 1981 to 18 August 1981) capital expenditure
34. Residual (19 August 1981 to 19 July 1982) capital expenditure
35. Deduction of residual (19 August 1981 to 19 July 1982) capital expenditure
36. Insertion of new section—
124adg. Deduction of allowable (post 19 July 1982) capital expenditure
37. Deduction of unrecouped previous capital expenditure
38. Exploration and prospecting expenditure
39. Double deductions
40. Reduction of allowable deductions where certain declarations lodged
41. Definitions
42. Application of Division where deduction allowable under section 124zaf or 124zafa
43. Disposal of unit of industrial property where deduction allowable under section 124zaf or 124zafa
44. Interpretation
45. Insertion of new sections—
124zada. Declarations
124zadb. Notification regarding non-completion of film
46. Election that Division not apply
47. Deductions for capital expenditure under pre 13 January 1983 contracts
48. Insertion of new section—
124zafa. Deductions for capital expenditure under post 12 January 1983 contracts
49. Expenditure of contributions
50. Insertion of new section—
124zaga. Satisfaction of Commissioner as to the future application of certain provisions
51. Allocation of contributions expended
52. Variation of contracts
53. Limitation of deductibility of revenue expenses
54. Insertion of new Division—
Division 10d—Deductions for Capital Expenditure on certain Income-Producing Buildings
124zf. Interpretation
124zg. Qualifying expenditure
124zh. Deductions in respect of qualifying expenditure
124zj. Reduction of deductions
124zk. Deduction in respect of destruction of building
55. Rebate of tax for certain primary producers
56. Amount of instalment of tax
57. Estimated income tax
58. Interpretation
59. Employer not accounting for deductions
60. Interpretation
61. Amount of provisional tax
62. Provisional tax on estimated income
63. Additional tax where income underestimated
64. Reduction of provisional tax
65. Insertion of new Division—
Division 3a—Collection of tax in respect of certain payments for work
221yha. Interpretation
221yhb. Provision of information to Commissioner
TABLE OF PROVISIONS—continued
Section
221yhc. Duties of payees
221yhd. Duties of eligible paying authorities
221yhe. Deduction forms to be forwarded to Commissioner
221yhf. Credits in respect of deductions from prescribed payments
221yhg. Application of credits
221yhh. Failure to make deductions from prescribed payments
221yhj. Failure to pay amounts deducted to Commissioner
221yhk. Failure to furnish deduction form, &c.
221yhl. Remission of certain amounts
221yhm. Persons discharged from liability in respect of deductions
221yhn. Recovery of amounts by Commissioner
221yho. Payments into and out of Consolidated Revenue Fund
221yhp. Deduction variation certificates
221yhq. Deduction exemption certificates
221yhr. Reporting exemption certificates
221yhs. Revocation of certificates
221yht. Notification and review of decisions
221yhu. Offences
221yhv. Time for prosecutions
221yhw. Joinder of charges under this Division
221yhx. Power of Commissioner to obtain information
221yhy. Declarations
221yhz. Special provisions relating to partnerships
66. Insertion of new Division—
Division 6—Deductions from certain withdrawals from Australian Film Industry Trust Fund accounts
221zm. Interpretation
221zn. Deductions from certain withdrawals from film accounts
221zo. Liability of person who fails to make deduction
221zp. Liability of person who fails to remit deduction
221zq. Remission of certain amounts
221zr. Recovery of amounts by Commissioner
221zs. Entitlement to credits in respect of deductions
221zt. Application of credits
221zu. Persons discharged from liability in respect of deductions from refunds
221zv. Payments into and out of Consolidated Revenue Fund
221zw. Time for prosecutions
221zx. Joinder of charges under this Division
67. Application of trust amendments
68. Amendment of assessments
Income Tax Assessment Amendment Act 1983
No.14 of 1983
An Act to amend the Income Tax Assessment Act 1936
[Assented to 14 June 1983]
BE IT ENACTED by the Queen, and the Senate and the House of Representatives of the Commonwealth of Australia, as follows:
Short title, &c.
1. (1) This Act may be cited as the Income Tax Assessment Amendment Act 1983.
(2) The Income Tax Assessment Act 19361 is in this Act referred to as the Principal Act.
Commencement
2. (1) Subject to sub-section (2), this Act shall come into operation on the day on which it receives the Royal Assent.
(2) Section 4 shall be deemed to have come into operation on the date of commencement of the Taxation (Interest on Overpayments) Act 1983.
Exemption of certain film income
3. Section 23h of the Principal Act is amended by inserting “or 124zafa” after “section 124zaf” (wherever occurring).
Certain items of assessable income
4. Section 26 of the Principal Act is amended by inserting after paragraph (ja) the following paragraph:
“(jb) the amount of any interest payable to the taxpayer under the Taxation (Interest on Overpayments) Act 1983, being interest that has been paid to the taxpayer or applied by the Commissioner in discharge or partial discharge of a liability of the taxpayer to the Commonwealth;”.
Certain film proceeds included in assessable income
5. Section 26ag of the Principal Act is amended by inserting in paragraph (1) (c) “or 124zafa” after “124zaf”.
Interpretation
6. Section 50b of the Principal Act is amended by inserting “or 98a” after “section 97” in the definition of “full-year amount” in sub-section (1).
Calculation of taxable income
7. Section 50c of the Principal Act is amended by omitting from sub-paragraph (3) (d) (v) “124ad, 124adb, 124add, 124adf” and substituting “122dg, 124ad, 124adb, 124add, 124adf, 124adg”.
Divisible amounts of assessable income
8. Section 50e of the Principal Act is amended by inserting in paragraph (1) (j) “or 98a” after “section 97”.
Divisible deductions
9. (1) Section 50g of the Principal Act is amended—
(a) by omitting from paragraph (1) (a) “or 57ak” and substituting “, 57ak or 57al”;
(b) by inserting in paragraph (1) (a) “or 124zafa” after “124zaf”;
(c) by omitting from paragraph (1) (a) “or Division 10c (other than section 124ze)” and substituting “, Division 10c (other than section 124ze) or Division 10d (other than section 124zk)”;
(d) by inserting in paragraph (2) (xa) “or 124zafa” after “124zaf”; and
(e) by inserting in paragraph (2) (y) “or 10d” after “10c”.
(2) The amendments made by paragraphs (1) (c) and (e) apply to assessments in respect of income of the year of income in which 20 July 1982 occurred and in respect of income of all subsequent years of income.
Special depreciation on property used for storage of grain, hay or fodder
10. Section 57ae of the Principal Act is amended—
(a) by omitting paragraph (2) (a) and substituting the following paragraph:
“(a) the depreciation allowable to a taxpayer under this Act in relation to a year of income in respect of a unit of property to which this section applies in relation to the year of income is—
(i) in the case of a unit of property to which sub-paragraph (ii) does not apply—20% of the cost of the unit; or
(ii) in the case of a unit of property that—
(A) was acquired by the taxpayer under a contract entered into after 19 July 1982; or
(B) was constructed by the taxpayer and commenced to be constructed after 19 July 1982,
33⅓% of the cost of the unit;”;
(b) by omitting paragraph (2) (c) and substituting the following paragraph:
“(c) no depreciation is allowable to the taxpayer in respect of that unit in relation to any year of income after—
(i) in the case of a unit of property to which sub-paragraph (a) (i) applies—the fourth year of income succeeding the relevant year of income; or
(ii) in the case of a unit of property to which sub-paragraph (a) (ii) applies—the second year of income succeeding the relevant year of income.”; and
(c) by adding at the end thereof the following sub-sections:
“(4) Where the Commissioner is satisfied that—
(a) on or before 19 July 1982 a taxpayer—
(i) owned a unit of property;
(ii) entered into a contract or arrangement for the acquisition of a unit of property; or
(iii) commenced the construction of a unit of property,
(which unit of property is, in each case, referred to in this sub-section as the ‘original unit’);
(b) after 19 July 1982 and at a time when—
(i) in a case to which sub-paragraph (a) (i) applies—the taxpayer was the owner of the original unit;
(ii) in a case to which sub-paragraph (a) (ii) applies—the taxpayer was a party to the contract or arrangement or was, by reason of the original unit having been acquired in pursuance of that contract or arrangement, the owner of the original unit; or
(iii) in a case to which sub-paragraph (a) (iii) applies—the taxpayer had yet to complete the construction of the original unit or was, by reason of the original unit having been constructed by the taxpayer, the owner of the original unit,
the taxpayer entered into a scheme in pursuance of which—
(iv) the taxpayer became the owner of the original unit (otherwise than in pursuance of the contract or arrangement referred to in sub-paragraph (a) (ii) or, in a case to which sub-paragraph (a) (iii) applies, by reason of the unit having been constructed by the taxpayer); or
(v) the taxpayer became the lessee or end-user of the original unit;
(c) depreciation ascertained in accordance with sub-paragraph (2) (a) (ii) in relation to the original unit would, but for this sub-section, be allowable to—
(i) in a case to which sub-paragraph (b) (iv) applies—the taxpayer; or
(ii) in a case to which sub-paragraph (b) (v) applies—a person who was the owner of the original unit at any time when the taxpayer was the lessee or end-user, as the case may be, of the original unit; and
(d) in a case to which sub-paragraph (b) (iv) applies—the taxpayer entered into the scheme for the purpose, or for purposes that included the purpose, of obtaining a deduction for depreciation ascertained in accordance with sub-paragraph (2) (a) (ii),
the Commissioner may apply this Division for the purposes of ascertaining the depreciation allowable in relation to the original unit in relation to the taxpayer or a person referred to in sub-paragraph (c) (ii), as the case may be, as if—
(e) in a case to which sub-paragraph (b) (iv) applies—the taxpayer became the owner of the original unit in pursuance of a contract entered into on the date on which—
(i) in a case to which sub-paragraph (a) (i) applies—the taxpayer entered into the contract or arrangement for the acquisition of the original unit or commenced the construction of the original unit, as the case may be, in pursuance of which the taxpayer became the owner of the original unit for the purposes of sub-paragraph (a) (i);
(ii) in a case to which sub-paragraph (a) (ii) applies—the taxpayer entered into the contract or arrangement referred to in sub-paragraph (a) (ii); or
(iii) in a case to which sub-paragraph (a) (iii) applies—the taxpayer commenced the construction referred to in sub-paragraph (a) (iii); or
(f) in a case to which sub-paragraph (b) (v) applies—the person referred to in sub-paragraph (c) (ii) became the owner of the
original unit in pursuance of a contract entered into on the date on which—
(i) in a case to which sub-paragraph (a) (i) applies—the taxpayer entered into the contract or arrangement for the acquisition of the original unit or commenced the construction of the original unit, as the case may be, in pursuance of which the taxpayer became the owner of the original unit for the purposes of sub-paragraph (a) (i);
(ii) in a case to which sub-paragraph (a) (ii) applies—the taxpayer entered into the contract or arrangement referred to in sub-paragraph (a) (ii); or
(iii) in a case to which sub-paragraph (a) (iii) applies—the taxpayer commenced the construction referred to in sub-paragraph (a) (iii).
“(5) Where the Commissioner is satisfied that—
(a) on or before 19 July 1982 a taxpayer—
(i) owned a unit of property;
(ii) entered into a contract or arrangement for the acquisition of a unit of property; or
(iii) commenced the construction of a unit of property,
(which unit of property is, in each case, referred to in this sub-section as the ‘original unit’);
(b) after 19 July 1982 and at a time when—
(i) in a case to which sub-paragraph (a) (i) applies—the taxpayer was the owner of the original unit;
(ii) in a case to which sub-paragraph (a) (ii) applies—the taxpayer was a party to the contract or arrangement or was, by reason of the original unit having been acquired in pursuance of that contract or arrangement, the owner of the original unit; or
(iii) in a case to which sub-paragraph (a) (iii) applies—the taxpayer had yet to complete the construction of the original unit or was, by reason of the original unit having been constructed by the taxpayer, the owner of the original unit,
the taxpayer entered into a scheme in pursuance of which—
(iv) the taxpayer became the owner; or
(v) the taxpayer became the lessee or end-user,
of a unit of property (in this sub-section referred to as the ‘substituted unit’) identical with, or having a purpose similar to that of, the original unit and intended by the taxpayer to be in lieu of the original unit;
(c) depreciation ascertained in accordance with sub-paragraph (2) (a) (ii) in relation to the substituted unit would, but for this sub-section, be allowable to—
(i) in a case to which sub-paragraph (b) (iv) applies—the taxpayer; or
(ii) in a case to which sub-paragraph (b) (v) applies—a person who was the owner of the substituted unit at any time when the taxpayer was the lessee or end-user, as the case may be, of the substituted unit; and
(d) any of the following conditions is satisfied, namely:
(i) in a case to which sub-paragraphs (b) (ii) and (iv) or (b) (iii) and (iv) apply, where the taxpayer was not the owner of the original unit at the time when he entered into the scheme—the taxpayer entered into the scheme for the purpose, or for purposes that included the purpose, of obtaining a deduction for depreciation ascertained in accordance with sub-paragraph (2) (a) (ii);
(ii) in a case to which sub-paragraphs (b) (ii) and (v) or (b) (iii) and (v) apply, where the taxpayer was not the owner of the original unit at the time when he entered into the scheme—the taxpayer entered into the scheme for the purpose, or for purposes that included the purpose, of benefiting, directly or indirectly, from the application of sub-paragraph (2) (a) (ii) in relation to the substituted unit in relation to a person referred to in sub-paragraph (c) (ii); or
(iii) in a case to which—
(a) sub-paragraphs (b) (ii) and (iv), (b) (ii) and (v), (b) (iii) and (iv) or (b) (iii) and (v) apply, where the taxpayer was the owner of the original unit at the time when he entered into the scheme; or
(b) sub-paragraphs (b) (i) and (iv) or (b) (i) and (v) apply,
it could be reasonably expected that the taxpayer would not have entered into the scheme but for the operation of sub-section (4),
the Commissioner may apply this Division for the purposes of ascertaining the depreciation allowable in relation to the substituted
unit in relation to the taxpayer or a person referred to in sub-paragraph (c) (ii), as the case may be, as if—
(e) in a case to which sub-paragraph (b) (iv) applies—the taxpayer became the owner of the substituted unit in pursuance of a contract entered into on the date on which—
(i) in a case to which sub-paragraph (a) (i) applies—the taxpayer entered into the contract or arrangement for the acquisition “of the original unit or commenced the construction of the original unit, as the case may be, in pursuance of which the taxpayer became the owner of the original unit for the purposes of sub-paragraph (a) (i);
(ii) in a case to which sub-paragraph (a) (ii) applies—the taxpayer entered into the contract or arrangement referred to in sub-paragraph (a) (ii); or
(iii) in a case to which sub-paragraph (a) (iii) applies—the taxpayer commenced the construction referred to in sub-paragraph (a) (iii); or
(f) in a case to which sub-paragraph (b) (v) applies—the person referred to in sub-paragraph (c) (ii) became the owner of the substituted unit in pursuance of a contract entered into on the date on which—
(i) in a case to which sub-paragraph (a) (i) applies—the taxpayer entered into the contract or arrangement for the acquisition of the original unit or commenced the construction of the original unit, as the case may be, in pursuance of which the taxpayer became the owner of the original unit for the purposes of sub-paragraph (a) (i);
(ii) in a case to which sub-paragraph (a) (ii) applies—the taxpayer entered into the contract or arrangement referred to in sub-paragraph (a) (ii); or
(iii) in a case to which sub-paragraph (a) (iii) applies—the taxpayer commenced the construction referred to in sub-paragraph (a) (iii).
“(6) For the purposes of sub-sections (4) and (5), a taxpayer shall be taken to be the end-user of a unit of property if, under a scheme to which the taxpayer is a party—
(a) at a time when the unit of property is owned by a person other than the taxpayer, the unit is, or is to be, used (whether or not by that person), wholly or principally, in connection with the provision of services to the taxpayer; and
(b) the taxpayer controls, or is able to control, directly or indirectly, the use of the property in or in connection with the provision of the services.
“(7) In this section—
‘lease’, in relation to a unit of property, includes—
(a) any scheme under which a right to use the unit of property is granted by the owner to another person; and
(b) any scheme under which a right to use the unit of property, being a right derived directly or indirectly from a right referred to in paragraph (a), is granted by a person to another person,
but does not include a hire-purchase agreement;
‘person’ includes a partnership and a person in the capacity of the trustee of a trust estate;
‘scheme’ includes—
(a) any agreement, arrangement, understanding, promise or undertaking, whether express or implied and whether or not enforceable, or intended to be enforceable, by legal proceedings; and
(b) any scheme, plan, proposal, action, course of action or course of conduct, whether unilateral or otherwise.
“(8) A reference in sub-section (4), (5), (6) or (7) to a unit of property shall be read as including a reference to a portion of a unit of property.
“(9) In this section, a reference to the acquisition by a taxpayer of property shall be read as including a reference to the construction of the property for the taxpayer by another person or persons.”.
Limit on cost price for depreciation of motor vehicle
11. (1) Section 57af of the Principal Act is amended by omitting from the definition of “index number” in sub-section 57af (15) “6 State capital cities” and substituting “8 capital cities”.
(2) The amendment made by sub-section (1) applies for the purpose of ascertaining the factor, in accordance with sub-section 57af (6) of the Income Tax Assessment Act 1936, for the purposes of sub-section 57af (4) of that Act in relation to the year of income commencing on 1 July 1983 and subsequent years of income.
Special depreciation on plant
12. Section 57ag of the Principal Act is amended by omitting from paragraph (2) (b) “or 57ak” and substituting “, 57ak or 57al”.
Special depreciation on property used for primary production
13. Section 57ah of the Principal Act is amended—
(a) by omitting paragraph (3) (a) and substituting the following paragraph:
“(a) the depreciation allowable to a taxpayer under this Act in relation to a year of income in respect of a unit of property to which this section applies in relation to the year of income is—
(i) in the case of a unit of property to which sub-paragraph (ii) does not apply—20% of the cost of the unit; or
(ii) in the case of a unit of property that—
(A) was acquired by the taxpayer under a contract entered into after 19 July 1982; or
(B) was constructed by the taxpayer and commenced to be constructed after 19 July 1982,
33% of the cost of the unit;”;
(b) by omitting paragraph (3) (c) and substituting the following paragraph:
“(c) no depreciation calculated in accordance with this section is allowable to the taxpayer in respect of that unit in relation to any year of income after—
(i) in the case of a unit of property to which sub-paragraph (a) (i) applies—the fourth year of income succeeding the relevant year of income; or
(ii) in the case of a unit of property to which sub-paragraph (a) (ii) applies—the second year of income succeeding the relevant year of income.”;
(c) by inserting after sub-section (8) the following sub-sections:
“(8a) Where the Commissioner is satisfied that—
(a) on or before 19 July 1982 a taxpayer—
(i) owned a unit of property;
(ii) entered into a contract or arrangement for the acquisition of a unit of property; or
(iii) commenced the construction of a unit of property, (which unit of property is, in each case, referred to in this sub-section as the ‘original unit’);
(b) after 19 July 1982 and at a time when—
(i) in a case to which sub-paragraph (a) (i) applies—the taxpayer was the owner of the original unit;
(ii) in a case to which sub-paragraph (a) (ii) applies—the taxpayer was a party to the contract or arrangement or was, by reason of the original unit having been acquired in pursuance of that contract or arrangement, the owner of the original unit; or
(iii) in a case to which sub-paragraph (a) (iii) applies—the taxpayer had yet to complete the construction of the original unit or was, by reason of the original unit having been constructed by the taxpayer, the owner of the original unit,
the taxpayer entered into a scheme in pursuance of which—
(iv) the taxpayer became the owner of the original unit (otherwise than in pursuance of the contract or arrangement referred to in sub-paragraph (a) (ii) or, in a case to which sub-paragraph (a) (iii) applies, by reason of the unit having been constructed by the taxpayer); or
(v) the taxpayer became the lessee or end-user of the original unit;
(c) depreciation ascertained in accordance with sub-paragraph
(3) (a) (ii) in relation to the original unit would, but for this sub-section, be allowable to—
(i) in a case to which sub-paragraph (b) (iv) applies—the taxpayer; or
(ii) in a case to which sub-paragraph (b) (v) applies—a person who was the owner of the original unit at any time when the taxpayer was the lessee or end-user, as the case may be, of the original unit; and
(d) in a case to which sub-paragraph (b) (iv) applies—the taxpayer entered into the scheme for the purpose, or for purposes that included the purpose, of obtaining a deduction for depreciation ascertained in accordance with sub-paragraph (3) (a) (ii),
the Commissioner may apply this Division for the purposes of ascertaining the depreciation allowable in relation to the original unit in relation to the taxpayer or a person referred to in sub-paragraph (c) (ii), as the case may be, as if—
(e) in a case to which sub-paragraph (b) (iv) applies—the taxpayer became the owner of the original unit in pursuance of a contract entered into on the date on which—
(i) in a case to which sub-paragraph (a) (i) applies—the taxpayer entered into the contract or arrangement for the acquisition of the original unit or commenced the construction of the original unit, as the case may be, in pursuance of which the taxpayer became the owner of the original unit for the purposes of sub-paragraph (a) (i);
(ii) in a case to which sub-paragraph (a) (ii) applies—the taxpayer entered into the contract or arrangement referred to in sub-paragraph (a) (ii); or
(iii) in a case to which sub-paragraph (a) (iii) applies—the taxpayer commenced the construction referred to in sub-paragraph (a) (iii); or
(f) in a case to which sub-paragraph (b) (v) applies—the person referred to in sub-paragraph (c) (ii) became the owner of the
original unit in pursuance of a contract entered into on the date on which—
(i) in a case to which sub-paragraph (a) (i) applies—the taxpayer entered into the contract or arrangement for the acquisition of the original unit or commenced the construction of the original unit, as the case may be, in pursuance of which the taxpayer became the owner of the original unit for the purposes of sub-paragraph (a) (i);
(ii) in a case to which sub-paragraph (a) (ii) applies—the taxpayer entered into the contract or arrangement referred to in sub-paragraph (a) (ii); or
(iii) in a case to which sub-paragraph (a) (iii) applies—the taxpayer commenced the construction referred to in sub-paragraph (a) (iii).
“(8b) Where the Commissioner is satisfied that—
(a) on or before 19 July 1982 a taxpayer—
(i) owned a unit of property;
(ii) entered into a contract or arrangement for the acquisition of a unit of property; or
(iii) commenced the construction of a unit of property,
(which unit of property is, in each case, referred to in this sub-section as the ‘original unit’);
(b) after 19 July 1982 and at a time when—
(i) in a case to which sub-paragraph (a) (i) applies—the taxpayer was the owner of the original unit;
(ii) in a case to which sub-paragraph (a) (ii) applies—the taxpayer was a party to the contract or arrangement or was, by reason of the original unit having been acquired in pursuance of that contract or arrangement, the owner of the original unit; or
(iii) in a case to which sub-paragraph (a) (iii) applies—the taxpayer had yet to complete the construction of the original unit or was, by reason of the original unit having been constructed by the taxpayer, the owner of the original unit,
the taxpayer entered into a scheme in pursuance of which—
(iv) the taxpayer became the owner; or
(v) the taxpayer became the lessee or end-user,
of a unit of property (in this sub-section referred to as the ‘substituted unit’) identical with, or having a purpose similar to that of, the original unit and intended by the taxpayer to be in lieu of the original unit;
(c) depreciation ascertained in accordance with sub-paragraph (3) (a) (ii) in relation to the substituted unit would, but for this sub-section, be allowable to—
(i) in a case to which sub-paragraph (b) (iv) applies—the taxpayer; or
(ii) in a case to which sub-paragraph (b) (v) applies—a person who was the owner of the substituted unit at any time when the taxpayer was the lessee or end-user, as the case may be, of the substituted unit; and
(d) any of the following conditions is satisfied, namely:
(i) in a case to which sub-paragraphs (b) (ii) and (iv) or (b) (iii) and (iv) apply, where the taxpayer was not the owner of the original unit at the time when he entered into the scheme—the taxpayer entered into the scheme for the purpose, or for purposes that included the purpose, of obtaining a deduction for depreciation ascertained in accordance with sub-paragraph (3) (a) (ii);
(ii) in a case to which sub-paragraphs (b) (ii) and (v) or (b) (iii) and (v) apply, where the taxpayer was not the owner of the original unit at the time when he entered into the scheme—the taxpayer entered into the scheme for the purpose, or for purposes that included the purpose, of benefiting, directly or indirectly, from the application of sub-paragraph (3) (a) (ii) in relation to the substituted unit in relation to a person referred to in sub-paragraph (c) (ii); or
(iii) in a case to which—
(A) sub-paragraphs (b) (ii) and (iv), (b) (ii) and (v), (b) (iii) and (iv) or (b) (iii) and (v) apply, where the taxpayer was the owner of the original unit at the time when he entered into the scheme; or
(B) sub-paragraphs (b) (i) and (iv) or (b) (i) and (v) apply,
it could be reasonably expected that the taxpayer would not have entered into the scheme but for the operation of sub-section (8a),
the Commissioner may apply this Division for the purposes of ascertaining the depreciation allowable in relation to the substituted
unit in relation to the taxpayer or a person referred to in sub-paragraph (c) (ii), as the case may be, as if—
(e) in a case to which sub-paragraph (b) (iv) applies—the taxpayer became the owner of the substituted unit in pursuance of a contract entered into on the date on which—
(i) in a case to which sub-paragraph (a) (i) applies— the taxpayer entered into the contract or arrangement for the acquisition of the original unit or commenced the construction of the original unit, as the case may be, in pursuance of which the taxpayer became the owner of the original unit for the purposes of sub-paragraph (a) (i);
(ii) in a case to which sub-paragraph (a) (ii) applies—the taxpayer entered into the contract or arrangement referred to in sub-paragraph (a) (ii); or
(iii) in a case to which sub-paragraph (a) (iii) applies—the taxpayer commenced the construction referred to in sub-paragraph (a) (iii); or
(f) in a case to which sub-paragraph (b) (v) applies—the person referred to in sub-paragraph (c) (ii) became the owner of the substituted unit in pursuance of a contract entered into on the date on which—
(i) in a case to which sub-paragraph (a) (i) applies—the taxpayer entered into the contract or arrangement for the acquisition of the original unit or commenced the construction of the original unit, as the case may be, in pursuance of which the taxpayer became the owner of the original unit for the purposes of sub-paragraph (a) (i);
(ii) in a case to which sub-paragraph (a) (ii) applies—the taxpayer entered into the contract or arrangement referred to in sub-paragraph (a) (ii); or
(iii) in a case to which sub-paragraph (a) (iii) applies—the taxpayer commenced the construction referred to in sub-paragraph (a) (iii).
“(8c) For the purposes of sub-sections (8a) and (8b), a taxpayer shall be taken to be the end-user of a unit of property if, under a scheme to which the taxpayer is a party—
(a) at a time when the unit of property is owned by a person other than the taxpayer, the unit is, or is to be, used (whether or not by that person), wholly or principally, in connection with—
(i) the production of goods for the taxpayer;
(ii) the supply of goods to the taxpayer; or
(iii) the provision of services to the taxpayer; and
(b) the taxpayer controls, or is able to control, directly or indirectly, the use of the property in or in connection with the production of the goods, the supply of the goods or the provision of the services, as the case may be.
“(8d) In this section—
‘goods’ includes whatever is capable of being owned or used;
‘lease’, in relation to a unit of property, includes—
(a) any scheme under which a right to use the unit of property is granted by the owner to another person; and
(b) any scheme under which a right to use the unit of property, being a right derived directly or indirectly from a right referred to in paragraph (a), is granted by a person to another person,
but does not include a hire-purchase agreement;
‘person’ includes a partnership and a person in the capacity of the
trustee of a trust estate;
‘scheme’ includes—
(a) any agreement, arrangement, understanding, promise or undertaking, whether express or implied and whether or not enforceable, or intended to be enforceable, by legal proceedings; and
(b) any scheme, plan, proposal, action, course of action or course of conduct, whether unilateral or otherwise.”; and
(d) by omitting from sub-section (9) “sub-sections (6), (7) and (8)” and substituting “sub-section (6), (7), (8), (8a), (8b), (8c) or (8d)”.
Special depreciation on property used for basic iron or steel production
14. Section 57ak of the Principal Act is amended by omitting from paragraph (1) (b) “1 July 1991” (twice occurring) and substituting “20 July 1982”.
15. (1) After section 57ak of the Principal Act the following section is inserted:
Special depreciation on property acquired or constructed after 19 July 1982
“57al. (1) Subject to sub-sections (2) and (7), this section applies to a unit of property in relation to a taxpayer in relation to a year of income if—
(a) depreciation is allowable to the taxpayer under section 54 in respect of the unit of property in relation to the year of income; and
(b) the unit of property—
(i) was acquired by the taxpayer under a contract entered into after 19 July 1982; or
(ii) was constructed by the taxpayer and commenced to be constructed after 19 July 1982.
“(2) This section does not apply in relation to a unit of property that is—
(a) a motor vehicle (including a vehicle known as a four-wheel drive vehicle) that is—
(i) a motor car, station wagon, panel van, utility truck or similar vehicle;
(ii) a motor cycle or similar vehicle; or
(iii) any other road vehicle designed to carry a load of less than 1 tonne or fewer than 9 passengers;
(b) an article being, or being a reproduction of, a painting, sculpture, drawing, engraving or photograph, or an article of a description, or having a use, similar to that of any of those articles;
(c) a structural improvement;
(d) a unit of property in respect of which section 57ah or 57aj applies; or
(e) a unit of property in respect of which, but for this section, the annual depreciation fixed under section 55, as increased by any amount that would, but for this section, be applicable under section 57ag, would be, or exceed, 33%.
“(3) Notwithstanding anything contained in sections 55, 56, 56a and 57, but subject to sub-sections 56 (2) and (3), the depreciation allowable under this Act in respect of a unit of property to which this section applies shall be ascertained in accordance with this section.
“(4) The depreciation allowable to a taxpayer under this Act in relation to a year of income in respect of a unit of property to which this section applies in relation to the year of income is—
(a) where, but for this section, the annual depreciation fixed under sub-section 55 (1), as increased by any amount that would, but for this section, be applicable under section 57ag, would be 20% or less—20% of the cost of the unit; and
(b) in any other case—331/3% of the cost of the unit.
“(5) Sub-sections 56 (1a), (1b), (1c) and (4) apply for the purposes of this section in like manner as those sub-sections apply for the purposes of section 56.
“(6) Sub-sections 122n (2), 123e (2) and 124an (2) apply in relation to a unit of property to which this section applies as if a reference in those sub-sections to section 56 included a reference to this section.
“(7) A taxpayer may elect, for the purpose of the calculation of depreciation allowable as a deduction to him under this Act, that this section shall not apply in relation to a unit of property to which this section would otherwise apply and, where an election is so made, this section does not apply in relation to that unit of property in relation to the taxpayer in relation to any year of income.
“(8) An election referred to in sub-section (7) in respect of a unit of property—
(a) shall be exercised by notice in writing to the Commissioner; and
(b) shall be lodged with the Commissioner on or before the date of lodgment of the return of income of the taxpayer for the first year of income in which depreciation calculated in accordance with this section would, but for sub-section (7), be allowable to the taxpayer in respect of the unit of property, or before such later date as the Commissioner allows.
“(9) Where the Commissioner is satisfied that—
(a) on or before 19 July 1982 a taxpayer—
(i) owned a unit of property;
(ii) entered into a contract or arrangement for the acquisition of a unit of property; or
(iii) commenced the construction of a unit of property,
(which unit of property is, in each case, referred to in this sub-section as the ‘original unit’);
(b) after 19 July 1982 and at a time when—
(i) in a case to which sub-paragraph (a) (i) applies—the taxpayer was the owner of the original unit;
(ii) in a case to which sub-paragraph (a) (ii) applies—the taxpayer was a party to the contract or arrangement or was, by reason of the original unit having been acquired in pursuance of that contract or arrangement, the owner of the original unit; or
(iii) in a case to which sub-paragraph (a) (iii) applies—the taxpayer had yet to complete the construction of the original unit or was, by reason of the original unit having been constructed by the taxpayer, the owner of the original unit,
the taxpayer entered into a scheme in pursuance of which—
(iv) the taxpayer became the owner of the original unit (otherwise than in pursuance of the contract or arrangement referred to in sub-paragraph (a) (ii) or, in a case to which sub-paragraph (a) (iii) applies, by reason of the unit having been constructed by the taxpayer); or
(v) the taxpayer became the lessee or end-user of the original unit;
(c) depreciation ascertained in accordance with this section in relation to the original unit would, but for this sub-section, be allowable to—
(i) in a case to which sub-paragraph (b) (iv) applies—the taxpayer; or
(ii) in a case to which sub-paragraph (b) (v) applies—a person who was the owner of the original unit at any time when the taxpayer was the lessee or end-user, as the case may be, of the original unit; and
(d) in a case to which sub-paragraph (b) (iv) applies—the taxpayer entered into the scheme for the purpose, or for purposes that included the purpose, of obtaining a deduction for depreciation ascertained in accordance with this section,
the Commissioner may apply this Division for the purposes of ascertaining the depreciation allowable in relation to the original unit in relation to the taxpayer or a person referred to in sub-paragraph (c) (ii), as the case may be, as if—
(e) in a case to which sub-paragraph (b) (iv) applies—the taxpayer became the owner of the original unit in pursuance of a contract entered into on the date on which—
(i) in a case to which sub-paragraph (a) (i) applies—the taxpayer entered into the contract or arrangement for the acquisition of the original unit or commenced the construction of the original unit, as the case may be, in pursuance of which the taxpayer became the owner of the original unit for the purposes of sub-paragraph (a) (i);
(ii) in a case to which sub-paragraph (a) (ii) applies—the taxpayer entered into the contract or arrangement referred to in sub-paragraph (a) (ii);or
(iii) in a case to which sub-paragraph (a) (iii) applies—the taxpayer commenced the construction referred to in sub-paragraph (a) (iii); or
(f) in a case to which sub-paragraph (b) (v) applies—the person referred to in sub-paragraph (c) (ii) became the owner of the original unit in pursuance of a contract entered into on the date on which—
(i) in a case to which sub-paragraph (a) (i) applies—the taxpayer entered into the contract or arrangement for the acquisition of the original unit or commenced the construction of the original unit, as the case may be, in pursuance of which the taxpayer became the owner of the original unit for the purposes of sub-paragraph (a) (i);
(ii) in a case to which sub-paragraph (a) (ii) applies—the taxpayer entered into the contract or arrangement referred to in sub-paragraph (a) (ii); or
(iii) in a case to which sub-paragraph (a) (iii) applies—the taxpayer commenced the construction referred to in sub-paragraph (a) (iii).
“(10) Where the Commissioner is satisfied that—
(a) on or before 19 July 1982 a taxpayer —
(i) owned a unit of property;
(ii) entered into a contract or arrangement for the acquisition of a unit of property; or
(iii) commenced the construction of a unit of property,
(which unit of property is, in each case, referred to in this sub-section as the ‘original unit’);
(b) after 19 July 1982 and at a time when—
(i) in a case to which sub-paragraph (a) (i) applies—the taxpayer was the owner of the original unit;
(ii) in a case to which sub-paragraph (a) (ii) applies—the taxpayer was a party to the contract or arrangement or was, by reason of the original unit having been acquired in pursuance of that contract or arrangement, the owner of the original unit; or
(iii) in a case to which sub-paragraph (a) (iii) applies—the taxpayer had yet to complete the construction of the original unit or was, by reason of the original unit having been constructed by the taxpayer, the owner of the original unit,
the taxpayer entered into a scheme in pursuance of which—
(iv) the taxpayer became the owner; or
(v) the taxpayer became the lessee or end-user,
of a unit of property (in this sub-section referred to as the ‘substituted unit’) identical with, or having a purpose similar to that of, the original unit and intended by the taxpayer to be in lieu of the original unit;
(c) depreciation ascertained in accordance with this section in relation to the substituted unit would, but for this sub-section, be allowable to—
(i) in a case to which sub-paragraph (b) (iv) applies—the taxpayer; or
(ii) in a case to which sub-paragraph (b) (v) applies—a person who was the owner of the substituted unit at any time when the taxpayer was the lessee or end-user, as the case may be, of the substituted unit; and
(d) any of the following conditions is satisfied, namely:
(i) in a case to which sub-paragraphs (b) (ii) and (iv) or (b) (iii) and (iv) apply, where the taxpayer was not the owner of the original unit at the time when he entered into the scheme—the taxpayer entered into the scheme for the purpose, or for purposes that included the purpose, of obtaining a deduction for depreciation ascertained in accordance with this section;
(ii) in a case to which sub-paragraphs (b) (ii) and (v) or (b) (iii) and (v) apply, where the taxpayer was not the owner of the original unit at the time when he entered into the scheme—the taxpayer entered into the scheme for the purpose, or for purposes that included the purpose, of benefiting, directly or indirectly, from the application of this section in relation to the substituted unit in relation to a person referred to in sub-paragraph (c) (ii); or
(iii) in a case to which—
(a) sub-paragraphs (b) (ii) and (iv), (b) (ii) and (v), (b) (iii) and (iv) or (b) (iii) and (v) apply, where the
taxpayer was the owner of the original unit at the time when he entered into the scheme; or
(b) sub-paragraphs (b) (i) and (iv) or (b) (i) and (v) apply,
it could be reasonably expected that the taxpayer would not have entered into the scheme but for the operation of sub-section (9),
the Commissioner may apply this Division for the purposes of ascertaining the depreciation allowable in relation to the substituted unit in relation to the taxpayer or a person referred to in sub-paragraph (c) (ii), as the case may be, as if—
(e) in a case to which sub-paragraph (b) (iv) applies—the taxpayer became the owner of the substituted unit in pursuance of a contract entered into on the date on which—
(i) in a case to which sub-paragraph (a) (i) applies—the taxpayer entered into the contract or arrangement for the acquisition of the original unit or commenced the construction of the original unit, as the case may be, in pursuance of which the taxpayer became the owner of the original unit for the purposes of sub-paragraph (a) (i);
(ii) in a case to which sub-paragraph (a) (ii) applies—the taxpayer entered into the contract or arrangement referred to in sub-paragraph (a) (ii); or
(iii) in a case to which sub-paragraph (a) (iii) applies—the taxpayer commenced the construction referred to in sub-paragraph (a) (iii); or
(f) in a case to which sub-paragraph (b) (v) applies—the person referred to in sub-paragraph (c) (ii) became the owner of the substituted unit in pursuance of a contract entered into on the date on which—
(i) in a case to which sub-paragraph (a) (i) applies—the taxpayer entered into the contract or arrangement for the acquisition of the original unit or commenced the construction of the original unit, as the case may be, in pursuance of which the taxpayer became the owner of the original unit for the purposes of sub-paragraph (a) (i);
(ii) in a case to which sub-paragraph (a) (ii) applies—the taxpayer entered into the contract or arrangement referred to in sub-paragraph (a) (ii); or
(iii) in a case to which sub-paragraph (a) (iii) applies—the taxpayer commenced the construction referred to in sub-paragraph (a) (iii).
“(11) For the purposes of sub-sections (9) and (10), a taxpayer shall be taken to be the end-user of a unit of property if, under a scheme to which the taxpayer is a party—
(a) at a time when the unit of property is owned by a person other than the taxpayer, the unit is, or is to be, used (whether or not by that person), wholly or principally, in connection with—
(i) the production of goods for the taxpayer;
(ii) the supply of goods to the taxpayer; or
(iii) the provision of services to the taxpayer; and
(b) the taxpayer controls, or is able to control, directly or indirectly, the use of the property in or in connection with the production of the goods, the supply of the goods or the provision of the services, as the case may be.
“(12) In this section—
‘goods’ includes whatever is capable of being owned or used;
‘lease’, in relation to a unit of property, includes—
(a) any scheme under which a right to use the unit of property is granted by the owner to another person; and
(b) any scheme under which a right to use the unit of property, being a right derived directly or indirectly from a right referred to in paragraph (a), is granted by a person to another person,
but does not include a hire-purchase agreement;
‘person’ includes a partnership and a person in the capacity of the trustee of a trust estate;
‘scheme’ includes—
(a) any agreement, arrangement, understanding, promise or undertaking, whether express or implied and whether or not enforceable, or intended to be enforceable, by legal proceedings; and
(b) any scheme, plan, proposal, action, course of action or course of conduct, whether unilateral or otherwise.
“(13) A reference in sub-section (9), (10), (11) or (12) to a unit of property shall be read as including a reference to a portion of a unit of property.
“(14) A reference in this section to the acquisition by a taxpayer of property shall be read as including a reference to the construction of the property for the taxpayer by another person or persons.”.
(2) In the application of section 57al of the Income Tax Assessment Act 1936 to a unit of property to which, but for the operation of paragraph 57ak (1) (b) of that Act, section 57ak of that Act would apply—
(a) the references in paragraphs 57al (9) (a) and (10) (a) of that Act to 19 July 1982 shall be read as references to 18 August 1981; and
(b) the references in paragraphs 57al (9) (b) and (10) (b) of that Act to 19 July 1982 shall be read as references to 18 May 1983.
Film losses
16. Section 80aaa of the Principal Act is amended by omitting from sub-paragraph (1) (c) (i) “section 124zaf” and substituting “sections 124zaf and 124zafa”.
Beneficiary not under any legal disability
17. Section 97 of the Principal Act is amended by omitting sub-section (2) and substituting the following sub-sections:
“(2) A reference in this section to income of a trust estate to which a beneficiary is presently entitled shall be read as not including a reference to income of a trust estate—
(a) to which a beneficiary is deemed to be presently entitled by virtue of the operation of sub-section 95a (2) where the beneficiary—
(i) is a natural person;
(ii) is a resident at the end of the year of income;
(iii) is not, in respect of that income, a beneficiary in the capacity of a trustee of another trust estate; and
(iv) is not a beneficiary to whom sub-section 97a (1) or (1a) applies in relation to the year of income; or
(b) to which a beneficiary is presently entitled where the beneficiary—
(i) is a non-resident at the end of the year of income;
(ii) is not a beneficiary to whom sub-section (3) of this section or sub-section 97a (1) or (1a) applies in relation to the year of income; and
(iii) is not, in respect of that income, a beneficiary in the capacity of a trustee of another trust estate.
“(3) Where—
(a) a beneficiary of a trust estate is presently entitled to a share of the income of the trust estate;
(b) the beneficiary is a non-resident at the end of the year of income; and
(c) the beneficiary is—
(i) a body, association, fund or organization the income of which is exempt from tax by virtue of the operation of section 23; or
(ii) an organization the income of which is exempt from tax by virtue of a regulation in force under the International Organizations (Privileges and Immunities) Act 1963,
that beneficiary is, for the purposes of the application of this Division in relation to that beneficiary in relation to that year of income, a beneficiary to whom this sub-section applies.”.
Liability of trustee
18. Section 98 of the Principal Act is amended by adding at the end thereof the following sub-sections:
“(3) Where a beneficiary of a trust estate who is presently entitled to a share of the income of the trust estate—
(a) is a company and is not, in respect of that share of the income of the trust estate, a beneficiary in the capacity of a trustee of another trust estate;
(b) is a non-resident at the end of the year of income; and
(c) is not—
(i) a beneficiary to whom sub-section 97a (1a) applies in relation to the year of income; or
(ii) a body, association, fund or organization referred to in sub-paragraph 97 (3) (c) (i) or (ii),
the trustee of the trust estate shall be assessed and is liable to pay tax in respect of—
(d) so much of that share of the net income of the trust estate as is attributable to a period when the beneficiary was a resident; and
(e) so much of that share of the net income of the trust estate as is attributable to a period when the beneficiary was not a resident and is also attributable to sources in Australia,
at the rate declared by the Parliament for the purposes of this sub-section.
“(4) Where—
(a) a beneficiary of a trust estate who is presently entitled to a share of the income of the trust estate—
(i) is not a company and is not, in respect of that share of the income of the trust estate, a beneficiary in the capacity of a trustee of another trust estate;
(ii) is a non-resident at the end of the year of income; and
(iii) is not a beneficiary to whom sub-section 97a (1) or (1a) applies in relation to the year of income; and
(b) the trustee of the trust estate is not assessed and is not liable to pay tax in pursuance of sub-section (1) or (2) in respect of any part of that share of the net income of the trust estate,
the trustee of the trust estate shall be assessed and is liable to pay tax in respect of—
(c) so much of that share of the net income of the trust estate as is attributable to a period when the beneficiary was a resident; and
(d) so much of that share of the net income of the trust estate as is attributable to a period when the beneficiary was not a resident and is also attributable to sources in Australia,
as if it were the income of an individual and were not subject to any deduction other than the concessional deductions (if any) that would have been allowable to the beneficiary if the beneficiary had been assessed in respect of the amount, or the sum of the amounts, applicable by virtue of paragraphs (c) and (d).”.
19. After section 98 of the Principal Act the following section is inserted:
Non-resident beneficiaries assessable in respect of certain income
“98a. (1) Where the trustee of a trust estate is assessed and is liable to pay tax in respect of the whole or a part of a share of the net income of a trust estate of a year of income in pursuance of sub-section 98 (3) or (4), the assessable income of the beneficiary who is presently entitled to that share of the income of the trust estate shall include—
(a) so much of the individual interest of the beneficiary in the net income of the trust estate as is attributable to a period when the beneficiary was a resident; and
(b) so much of the individual interest of the beneficiary in the net income of the trust estate as is attributable to a period when the beneficiary was not a resident and is also attributable to sources in Australia.
“(2) Where sub-section (1) applies in relation to a beneficiary in relation to a year of income—
(a) there shall be deducted from the income tax assessed against the beneficiary the amount (in this sub-section referred to as the ‘relevant amount’) of the tax paid by the trustee in respect of the beneficiary’s interest in the net income of the trust estate; and
(b) if the relevant amount is greater than the amount of the income tax assessed against the beneficiary—the Commissioner shall pay to the beneficiary an amount equal to the difference between those 2 amounts.”.
Purchase of mining or prospecting right or information
20. (1) Section 122b of the Principal Act is amended by omitting paragraph (2) (a) and substituting the following paragraph:
“(a) so much of the capital expenditure (other than expenditure on plant or expenditure of a kind referred to in section 122j or in section 123aa of the Income Tax Assessment Act 1936-1967) incurred by the vendor before the date of the transaction in relation to the area that is the subject of the right or to which the information relates as—
(i) to the extent to which that expenditure is not allowable (post 19 July 1982) capital expenditure within the meaning of section 122dg—would have been included in the residual previous capital expenditure, the residual capital expenditure, the residual (1 May 1981 to 18 August 1981) capital expenditure or the residual (19 August 1981 to 19 July 1982) capital expenditure of the vendor as at the end of the year of income of the vendor during which the transaction occurred but for the transaction and any later transaction in relation to that area; and
(ii) to the extent to which that expenditure is allowable (post 19 July 1982) capital expenditure within the meaning of section 122dg—
(a) has not been allowed and is not allowable as a deduction to the vendor under sub-section 122dg (2) in respect of a year of income of the vendor preceding the year of income during which the transaction occurred; and
(b) is attributable to an amount of expenditure incurred in relation to that area that has not been taken into account in determining an amount to be included in the allowable capital expenditure of a person under paragraph 122a (1) (d) in respect of a transaction entered into before the first-mentioned transaction;”.
(2) The amendment made by sub-section (1) applies to assessments in respect of income of the year of income that commenced on 1 July 1980 and of all subsequent years of income.
Deduction of residual previous capital expenditure
21. Section 122d of the Principal Act is amended by inserting in sub-section (3) “, 122dg” after “122df”.
Deduction of residual capital expenditure
22. Section 122db of the Principal Act is amended by inserting in sub-section (3) “, 122dg” after “122df”.
Residual (1 May 1981 to 18 August 1981) capital expenditure
23. (1) Section 122dc of the Principal Act is amended by omitting from sub-section (2) “(1) (c) (ii) (b)” and substituting “(1) (e) (ii) (b)”.
(2) The amendment made by sub-section (1) applies to assessments in respect of income of the year of income that commenced on 1 July 1980 and of all subsequent years of income.
Deduction of residual (1 May 1981 to 18 August 1981) capital expenditure
24. Section 122dd of the Principal Act is amended by inserting in sub-section (3) “, 122dg” after “122df”.
Residual (19 August 1981 to 19 July 1982) capital expenditure
25. Section 122de of the Principal Act is amended—
(a) by omitting sub-section (1) and substituting the following sub-section:
“(1) For the purposes of this Division, but subject to sub-section (2), the residual (19 August 1981 to 19 July 1982) capital expenditure of a taxpayer as at the end of a year of income (in this section referred to as the ‘relevant year of income’) shall be ascertained by deducting from the amount of allowable capital expenditure incurred by the
taxpayer after 18 August 1981 and before the end of the relevant year of income, being—
(a) expenditure incurred on or before 19 July 1982; or
(b) expenditure incurred after 19 July 1982—
(i) under a contract entered into on or before 19 July 1982; or
(ii) in respect of the construction of property by the taxpayer where that construction commenced on or before 19 July 1982,
but not being—
(c) expenditure incurred under a contract entered into on or before 18 August 1981; or
(d) expenditure incurred in respect of the construction of property by the taxpayer where that construction commenced on or before 18 August 1981,
the sum of—
(e) any part of that allowable capital expenditure that—
(i) has been allowed or is allowable as a deduction under section 122df from the assessable income of a year of income preceding the relevant year of income; or
(ii) was incurred on property (not being property in respect of which a notice has been duly given to the Commissioner under section 122b by the taxpayer and a person who acquired the property from the taxpayer)—
(a) that has been disposed of, lost or destroyed; or
(b) the use of which by the taxpayer for prescribed purposes has been otherwise terminated,
and has not been allowed and is not allowable as a deduction from the assessable income of any year of income that ended before the year of income in which the disposal, loss, destruction or termination of use took place; and
(f) so much of any amounts specified in notices duly given to the Commissioner under section 122b in relation to the acquisition from the taxpayer, during the relevant year of income or a preceding year of income, of a mining or prospecting right or mining or prospecting information as is attributable to expenditure that would, but for this paragraph, be included in the residual (19 August 1981 to 19 July 1982) capital expenditure of the taxpayer as at the end of the relevant year of income.”; and
(b) by omitting from sub-section (2) “(1) (c) (ii) (b) has, after 18 August 1981,” and substituting “(1) (e) (ii) (b) has, after 18 August 1981 and on or before 19 July 1982,”.
Deduction of residual (19 August 1981 to 19 July 1982) capital expenditure
26. Section 122df of the Principal Act is amended—
(a) by omitting “residual (post 18 August 1981) capital expenditure” (wherever occurring) and substituting “residual (19 August 1981 to 19 July 1982) capital expenditure”; and
(b) by inserting in sub-section (3) “122dg or” before “122j”.
27. After section 122df of the Principal Act the following section is inserted:
Deduction of allowable (post 19 July 1982) capital expenditure
“122dg. (1) In this section, ‘allowable (post 19 July 1982) capital expenditure’, in relation to a taxpayer, means allowable capital expenditure incurred by the taxpayer after 19 July 1982, not being expenditure incurred—
(a) under a contract entered into on or before 19 July 1982; or
(b) in respect of the construction of property by the taxpayer where that construction commenced on or before 19 July 1982.
“(2) Where, in a year of income, a taxpayer incurs allowable (post 19 July 1982) capital expenditure, an amount ascertained in accordance with this section is an allowable deduction in respect of that expenditure in respect of that year of income and in respect of all subsequent years of income.
“(3) Subject to sub-section (6), the deduction allowable under sub-section (2) in respect of a year of income (in this sub-section referred to as the ‘relevant year of income’) in respect of an amount of allowable (post 19 July 1982) capital expenditure incurred by a taxpayer is the amount ascertained by dividing the amount of that expenditure that is unrecouped as at the end of the relevant year of income by—
(a) a number equal to the difference between 10 and the number of years of income (if any) preceding the relevant year of income in respect of which a deduction has been allowed or is allowable, or, but for the operation of sub-section (6), would have been allowed or would be allowable, under sub-section (2) in respect of that amount of expenditure; or
(b) a number equal to the number of whole years in the estimated life of the mine or proposed mine on the mining property, or, if there is more than one such mine, of the mine that has the longer or longest estimated life, as at the end of the relevant year of income,
whichever number is the less.
“(4) For the purposes of sub-section (3), the amount of the allowable (post 19 July 1982) capital expenditure incurred by a taxpayer that is unrecouped as at the end of a year of income (in this sub-section referred to as
the ‘relevant year of income’) shall be ascertained by deducting from the amount of that allowable (post 19 July 1982) capital expenditure the sum of—
(a) any part of that allowable (post 19 July 1982) capital expenditure that—
(i) has been allowed or is allowable, or, but for the operation of sub-section (6), would have been allowed or would be allowable, as a deduction under sub-section (2) in respect of a year of income preceding the relevant year of income; or
(ii) was incurred on property (not being property in respect of which a notice has been duly given to the Commissioner under section 122b by the taxpayer and a person who acquired the property from the taxpayer)—
(a) that has been disposed of, lost or destroyed; or
(b) the use of which by the taxpayer for prescribed purposes has been otherwise terminated,
and has not been allowed and is not allowable as a deduction under sub-section (2) in respect of a year of income preceding the relevant year of income; and
(b) so much of any amounts specified in notices duly given to the Commissioner under section 122b in relation to the acquisition from the taxpayer, during the relevant year of income or a year of income preceding the relevant year of income, of a mining or prospecting right or mining or prospecting information as—
(i) is attributable to that allowable (post 19 July 1982) capital expenditure; and
(ii) has not been allowed and is not allowable as a deduction under sub-section (2) in respect of a year of income preceding the relevant year of income.
“(5) For the purposes of sub-paragraphs (4) (a) (ii) and (4) (b) (ii), an amount that would have been allowed or allowable as a deduction under sub-section (2) but for the operation of sub-section (6) shall be deemed to have been allowed or to be allowable as such a deduction.
“(6) The amount, or the total of the amounts, of the deduction or deductions allowable under sub-section (2) in respect of a year of income (including any amount that is deemed to be a deduction so allowable by virtue of sub-section (7)) shall not exceed an amount equal to so much of the assessable income of the year of income as remains after deducting all allowable deductions, other than deductions allowable under this section or under section 122j, and, where the total of the amounts of 2 or more deductions that would be allowable under this section but for this sub-section exceeds the maximum amount determined in accordance with this sub-section, those deductions shall be reduced respectively by amounts proportionate to those deductions and equal in total to the excess.
“(7) Subject to sub-sections (8) and (9), where the whole or a part of a deduction in respect of a year of income is disallowed under sub-section (6),
that whole or part shall be deemed to be a deduction that is allowable under sub-section (2) in respect of the next succeeding year of income.
“(8) Where—
(a) an amount of allowable (post 19 July 1982) capital expenditure was incurred by a taxpayer on property (not being property in respect of which a notice has been duly given to the Commissioner under section 122b) that, during a year of income, has been disposed of, lost or destroyed or the use of which by the taxpayer for prescribed purposes has been otherwise terminated; and
(b) the whole or a part of an amount (which whole or part is in this sub-section referred to as the ‘relevant amount’) in respect of which a deduction would, but for this sub-section, be allowable to the taxpayer in that year of income or in a succeeding year of income by virtue of the operation of sub-section (7) is attributable to the amount referred to in paragraph (a),
a deduction is not allowable to the taxpayer in respect of the relevant amount.
“(9) Where—
(a) an amount is specified in a notice duly given to the Commissioner under section 122b in relation to the acquisition from a taxpayer, during a year of income, of a mining or prospecting right or mining or prospecting information; and
(b) the whole or a part of an amount (which whole or part is in this sub-section referred to as the ‘relevant amount’) in respect of which a deduction would, but for this sub-section, be allowable to the taxpayer in that year of income or in a succeeding year of income by virtue of the operation of sub-section (7) is attributable to the amount referred to in paragraph (a),
a deduction is not allowable to the taxpayer in respect of the relevant amount.
“(10) Where—
(a) after 17 August 1976, a taxpayer has incurred allowable capital expenditure on property the use of which by the taxpayer for prescribed purposes has been terminated; and
(b) the property has, after 19 July 1982, come into use by the taxpayer for purposes for which allowable capital expenditure may be incurred,
so much of that first-mentioned expenditure as the Commissioner determines shall, for the purposes of this section, be deemed to have been incurred by the taxpayer on that property, on the day on which that property so came into use by the taxpayer, for the purposes for which that property so came into use.
“(11) Where, having regard to the information in his possession, the Commissioner is not satisfied that the estimated life of a mine or a proposed mine as made by the taxpayer is a reasonable estimate, the estimated life shall, for the purposes of paragraph (3) (b), be taken to be such period as the Commissioner considers reasonable.”.
Deductions not allowable under other provisions
28. Section 122n of the Principal Act is amended by inserting in sub-section (3) “, 122dg (6)” after “122df (3)”.
Election in relation to expenditure incurred after 17 August 1976
29. (1) Section 123bb of the Principal Act is amended by omitting from sub-section (3) “123b (2) (b)” and substituting “123b (1) (b)”.
(2) The amendment made by sub-section (1) applies to assessments in respect of income of the year of income in which 17 August 1976 occurred and of all subsequent years of income.
Purchase of prospecting or mining rights or information
30. (1) Section 124ab of the Principal Act is amended by omitting paragraph (3) (a) and substituting the following paragraph:
“(a) so much of the expenditure of a capital nature (other than expenditure on plant) incurred by the vendor before the date of the transaction in relation to the area that is the subject of the right or to which the information relates as—
(i) to the extent to which that expenditure is not allowable (post 19 July 1982) capital expenditure within the meaning of section 124adg—would have been included in the residual previous capital expenditure, the residual capital expenditure, the residual (1 May 1981 to 18 August 1981) capital expenditure or the residual (19 August 1981 to 19 July 1982) capital expenditure of the vendor as at the end of the year of income of the vendor during which the transaction occurred but for the transaction and any later transaction in relation to that area; and
(ii) to the extent to which that expenditure is allowable (post 19 July 1982) capital expenditure within the meaning of section 124adg—
(a) has not been allowed and is not allowable as a deduction to the vendor under sub-section 124adg (2) in respect of a year of income of the vendor preceding the year of income during which the transaction occurred; and
(b) is attributable to an amount of expenditure incurred in relation to that area that has not been taken into account in determining an amount to be included in the allowable capital expenditure of a person under paragraph 124aa (2) (b) in respect of a transaction entered into before the first-mentioned transaction;”.
(2) The amendment made by sub-section (1) applies to assessments in respect of income of the year of income that commenced on 1 July 1980 and of all subsequent years of income.
Deduction of residual previous capital expenditure
31. Section 124ad of the Principal Act is amended—
(a) by inserting in sub-section (3) “, section 124adg” after “section 124adf”; and
(b) by inserting in sub-section (4) “, section 124adg” after “section 124adf” (wherever occurring).
Deduction of residual capital expenditure
32. Section 124adb of the Principal Act is amended by inserting in sub-section (3) “, 124adg” after “124adf”.
Deduction of residual (1 May 1981 to 18 August 1981) capital expenditure
33. Section 124add of the Principal Act is amended by inserting in sub-section (3) “, section 124adg” after “section 124adf”.
Residual (19 August 1981 to 19 July 1982) capital expenditure
34. Section 124ade of the Principal Act is amended—
(a) by omitting sub-section (1) and substituting the following sub-section:
“(1) For the purposes of this Division, but subject to the succeeding provisions of this section, the residual (19 August 1981 to 19 July 1982) capital expenditure of a taxpayer as at the end of a year of income (in this section referred to as the ‘relevant year of income’) shall be ascertained by deducting from the sum of—
(a) the amount of allowable capital expenditure (other than allowable capital expenditure to which paragraph (b) applies) incurred by the taxpayer after 18 August 1981 and before the end of the relevant year of income, being—
(i) expenditure incurred on or before 19 July 1982; or
(ii) expenditure incurred after 19 July 1982—
(a) under a contract entered into on or before 19 July 1982; or
(b) in respect of the construction of property by the taxpayer where that construction commenced on or before 19 July 1982,
but not being—
(iii) expenditure incurred under a contract entered into on or before 18 August 1981; or
(iv) expenditure incurred in respect of the construction of property by the taxpayer where that construction commenced on or before 18 August 1981; and
(b) any amount of allowable capital expenditure that is deemed by sub-section (2) to have been incurred by the taxpayer after 18 August 1981 and on or before 19 July 1982,
the following amounts:
(c) any part of the expenditure included in that sum that—
(i) has been allowed or is allowable as a deduction under section 124adf from the assessable income of a year of income preceding the relevant year of income; or
(ii) was incurred on property (not being property in respect of which a notice has been duly given to the Commissioner under section 124ab by the taxpayer and a person who acquired the last-mentioned property from the taxpayer) that has been disposed of, lost or destroyed or the use of which by the taxpayer for the purposes of carrying on prescribed petroleum operations has been otherwise terminated, and has not been allowed and is not allowable as a deduction from the assessable income of any year of income that ended before the year of income in which the disposal, loss, destruction or termination of use took place; and
(d) the sum of so much of any amounts specified in notices duly given to the Commissioner under section 124ab in relation to the acquisition from the taxpayer, during the relevant year of income or a preceding year of income, of a petroleum prospecting or mining right or petroleum prospecting or mining information as is attributable to expenditure that would, but for this paragraph, be included in the residual (19 August 1981 to 19 July 1982) capital expenditure of the taxpayer as at the end of the relevant year of income.”; and
(b) by inserting in paragraph (2) (b) “and on or before 19 July 1982” after “18 August 1981”.
Deduction of residual (19 August 1981 to 19 July 1982) capital expenditure
35. Section 124adf of the Principal Act is amended—
(a) by omitting “residual (post 18 August 1981) capital expenditure” (wherever occurring) and substituting “residual (19 August 1981 to 19 July 1982) capital expenditure”; and
(b) by omitting from sub-section (3) “and section 124ah” and substituting “, section 124adg and section 124ah”.
36. After section 124adf of the Principal Act the following section is inserted:
Deduction of allowable (post 19 July 1982) capital expenditure
“124adg. (1) In this section, ‘allowable (post 19 July 1982) capital expenditure’, in relation to a taxpayer, means allowable capital expenditure incurred by the taxpayer after 19 July 1982, not being expenditure incurred—
(a) under a contract entered into on or before 19 July 1982; or
(b) in respect of the construction of property by the taxpayer where that construction commenced on or before 19 July 1982.
“(2) Where, in a year of income, a taxpayer incurs allowable (post 19 July 1982) capital expenditure, an amount ascertained in accordance with this section is an allowable deduction in respect of that expenditure in respect of that year of income and in respect of subsequent years of income.
“(3) Subject to sub-section (6), the deduction allowable under sub-section (2) in respect of a year of income (in this sub-section referred to as the ‘relevant year of income’) in respect of an amount of allowable (post 19 July 1982) capital expenditure incurred by a taxpayer is the amount ascertained by dividing the amount of that expenditure that is unrecouped as at the end of the relevant year of income by—
(a) a number equal to the difference between 10 and the number of years of income (if any) preceding the relevant year of income in respect of which a deduction has been allowed or is allowable, or, but for the operation of sub-section (6), would have been allowed or would be allowable, under sub-section (2) in respect of that amount of expenditure; or
(b) a number equal to the number of whole years in the estimated life of the petroleum field or proposed petroleum field as at the end of the relevant year of income,
whichever number is the less.
“(4) For the purposes of sub-section (3), the amount of the allowable (post 19 July 1982) capital expenditure incurred by a taxpayer that is unrecouped as at the end of a year of income (in this sub-section referred to as the ‘relevant year of income’) shall be ascertained by deducting from the amount of that allowable (post 19 July 1982) capital expenditure the sum of—
(a) any part of that allowable (post 19 July 1982) capital expenditure that—
(i) has been allowed or is allowable, or, but for the operation of sub-section (6), would have been allowed or would be allowable, as a deduction under sub-section (2) in respect of a year of income preceding the relevant year of income; or
(ii) was incurred on property (not being property in respect of which a notice has been duly given to the Commissioner under section 124ab by the taxpayer and a person who acquired the property from the taxpayer)—
(a) that has been disposed of, lost or destroyed; or
(b) the use of which by the taxpayer for the purposes of carrying on prescribed petroleum operations has been otherwise terminated,
and has not been allowed and is not allowable as a deduction under sub-section (2) in respect of a year of income preceding the relevant year of income; and
(b) so much of any amounts specified in notices duly given to the Commissioner under section 124ab in relation to the acquisition from the taxpayer, during the relevant year of income or a year of income preceding the relevant year of income, of a petroleum prospecting or mining right or petroleum prospecting or mining information as—
(i) is attributable to that allowable (post 19 July 1982) capital expenditure; and
(ii) has not been allowed and is not allowable as a deduction under sub-section (2) in respect of a year of income preceding the relevant year of income.
“(5) For the purposes of sub-paragraphs (4) (a) (ii) and (4) (b) (ii), an amount that would have been allowed or allowable as a deduction under sub-section (2) but for the operation of sub-section (6) shall be deemed to have been allowed or to be allowable as such a deduction.
“(6) The amount, or the total of the amounts, of the deduction or deductions allowable under sub-section (2) in respect of a year of income (including any amount that is deemed to be a deduction so allowable by virtue of sub-section (7)) shall not exceed an amount equal to so much of the assessable income of the year of income as remains after deducting all allowable deductions, other than deductions allowable under this section or under section 124ah, and, where the total of the amounts of 2 or more deductions that would be allowable under this section but for this sub-section exceeds the maximum amount determined in accordance with this sub-section, those deductions shall be reduced respectively by amounts proportionate to those deductions and equal in total to the excess.
“(7) Subject to sub-sections (8) and (9), where the whole or a part of a deduction in respect of a year of income is disallowed under sub-section (6), that whole or part shall be deemed to be a deduction that is allowable under sub-section (2) in respect of the next succeeding year of income.
“(8) Where—
(a) an amount of allowable (post 19 July 1982) capital expenditure was incurred by a taxpayer on property (not being property in respect of which a notice has been duly given to the Commissioner under section 124ab) that, during a year of income, has been disposed of, lost or destroyed or the use of which by the taxpayer for the purposes of carrying on prescribed petroleum operations has been otherwise terminated; and
(b) the whole or a part of an amount (which whole or part is in this sub-section referred to as the ‘relevant amount’) in respect of which a deduction would, but for this sub-section, be allowable to the taxpayer in that year of income or in a succeeding year of income by virtue of the operation of sub-section (7) is attributable to the amount referred to in paragraph (a),
a deduction is not allowable to the taxpayer in respect of the relevant amount.
“(9) Where—
(a) an amount is specified in a notice duly given to the Commissioner under section 124ab in relation to the acquisition from a taxpayer, during a year of income, of a petroleum prospecting or mining right or petroleum prospecting or mining information; and
(b) the whole or a part of an amount (which whole or part is in this sub-section referred to as the ‘relevant amount’) in respect of which a deduction would, but for this sub-section, be allowable to the taxpayer in that year of income or in a succeeding year of income by virtue of the operation of sub-section (7) is attributable to the amount referred to in paragraph (a),
a deduction is not allowable to the taxpayer in respect of the relevant amount.
“(10) Where—
(a) after 17 August 1976—
(i) a taxpayer has incurred allowable capital expenditure on property the use of which by the taxpayer for the purposes of carrying on prescribed petroleum operations has been terminated; or
(ii) a taxpayer has, otherwise than in carrying on prescribed petroleum operations, incurred expenditure of a capital nature on property, being expenditure that would have been allowable capital expenditure if it had been incurred in carrying on such operations; and
(b) the property has, after 19 July 1982, come into use by the taxpayer for purposes for which allowable capital expenditure may be incurred,
so much of the expenditure referred to in sub-paragraph (a) (i) or (ii), as the case may be, as the Commissioner determines shall, for the purposes of this section, be deemed to have been incurred by the taxpayer on that property, on the day on which that property so came into use by the taxpayer, for the purposes for which that property so came into use.
“(11) Where, having regard to the information in his possession, the Commissioner is not satisfied that the estimated life of a petroleum field or a proposed petroleum field as made by the taxpayer is a reasonable estimate, the estimated life shall, for the purposes of paragraph (3) (b), be taken to be such period as the Commissioner considers reasonable.”.
Deduction of unrecouped previous capital expenditure
37. Section 124af of the Principal Act is amended—
(a) by inserting in sub-section (1) “, 124adg” after “124adf”; and
(b) by inserting in sub-section (2) “, 124adg” after “124adf” (wherever occurring).
Exploration and prospecting expenditure
38. Section 124ah of the Principal Act is amended by inserting in sub-section (3) “124adg,” after “124adf,”.
Double deductions
39. Section 124an of the Principal Act is amended by inserting in sub-section (3) “124adg (6),” after “124adf (3),”.
Reduction of allowable deductions where certain declarations lodged
40. Section 124ar of the Principal Act is amended—
(a) by inserting “124adg,” after “124adf,” in paragraph (a) of the definition of “eligible petroleum deduction” in sub-section (1);
(b) by inserting “124adg,” after “124adf,” in paragraph (a) of the definition of “prescribed deduction” in sub-section (1); and
(c) by inserting “124adg,” after “124adf,” in paragraph (a) of the definition of “prescribed petroleum deduction” in sub-section (1).
Definitions
41. Section 124k of the Principal Act is amended by inserting in sub-paragraph (2) (b) (iv) “or 124zafa (1) (c)” after “124zaf (1) (c)”.
Application of Division where deduction allowable under section 124zaf or 124zafa
42. Section 124ka of the Principal Act is amended by inserting in paragraph (1) (b) “or 124zafa” after “124zaf”.
Disposal of unit of industrial property where deduction allowable under section 124zaf or 124zafa
43. Section 124wa of the Principal Act is amended—
(a) by inserting in paragraph (1) (c) “or 124zafa” after “124zaf”;
(b) by inserting in paragraph (4) (c) “or 124zafa” after “124zaf”; and
(c) by inserting in sub-section (7) “or 124zafa” after “124zaf”.
Interpretation
44. Section 124zaa of the Principal Act is amended—
(a) by inserting after the definition of “film” in sub-section (1) the following definitions:
“ ‘film account’, in relation to a film, means an account that has been opened in relation to the film in the Film Trust Fund;
“ ‘Film Trust Fund’ means the Australian Film Industry Trust Fund in the Trust Fund referred to in section 60 of the Audit Act 1901;”;
(b) by inserting after the definition of “qualifying Australian film” in sub-section (1) the following definition:
“ ‘relevant 24 month period’, in relation to a film, means the period of 24 months after the end of the financial year in which capital moneys were first expended in producing, or by way of contribution to the cost of producing, the film;”; and
(c) by adding at the end thereof the following sub-sections:
“(7) For the purposes of this Division, moneys withdrawn from a film account opened in relation to a film shall be taken to be dealt with in the prescribed manner if, and only if, the moneys are expended—
(a) in producing the film;
(b) in payment to the Commissioner in respect of amounts paid into the film account under paragraph 221zn (1) (e); or
(c) in payment by way of refund to a person of an amount deducted under paragraph 221zn (1) (a), being an amount to which sub-section 221zn (4) applies.
“(8) In the application of paragraph (7) (a) for the purposes of this Division, other than sections 124zag and 124zah, in determining whether moneys are expended in producing a film, sections 124zaj and 124zak shall be disregarded.
“(9) In determining for the purposes of the definition of ‘relevant 24 month period’ in sub-section (1) and for the purposes of section 124zada and sub-paragraph 124zafa (1) (d) (iv) the meaning of references to the expenditure of capital moneys in producing, or by way of contribution to the cost of producing, a film, sections 124zaj, 124zak, 124zal and 124zam shall be disregarded.
“(10) For the purposes of this Division—
(a) where a person pays moneys to another person and that other person pays the moneys into a film account—
(i) the first-mentioned person shall be deemed to have paid the moneys into that film account at the time when the moneys were paid to the other person; and
(ii) the other person shall be deemed not to have paid the moneys into the film account; and
(b) where a person withdraws moneys from a film account and pays the moneys to another person—
(i) the other person shall be deemed to have withdrawn the moneys from the film account at the time when the moneys were paid to that other person; and
(ii) the first-mentioned person shall be deemed not to have withdrawn the moneys from the film account.
45. After section 124zad of the Principal Act the following sections are inserted:
Declarations
“124zada. (1) Where—
(a) during a financial year (in this sub-section referred to as the ‘relevant financial year’) capital moneys are expended, under a contract entered into on or after 13 January 1983, by way of contribution to the cost of producing a film; and
(b) capital moneys have not been expended during any preceding financial year by way of contribution to the cost of producing the film,
a person may, after 30 June 1983 and before the expiration of 1 month after the end of the relevant financial year, or within such further time as the Commissioner allows, lodge with the Commissioner a declaration—
(c) that a contract for the production of the film has been entered into under which a person has, or persons have, agreed to expend an amount that is specified in the contract as the estimated cost of producing the film;
(d) specifying the items of expenditure that comprise the amount referred to in paragraph (c);
(e) that a film account (in this section referred to as the ‘relevant film account’) has been opened in relation to the film;
(f) specifying the following details:
(i) the total amount of moneys received, being capital moneys expended by persons by way of contribution to the cost of producing the film, during the period (in this sub-section referred to as the ‘relevant period’) commencing at the beginning of the relevant financial year and ending at the time the declaration is made;
(ii) the total amount of the moneys referred to in sub-paragraph (i) that were received before 1 July 1983;
(iii) the total amount of the moneys referred to in sub-paragraph (ii) that were, before 1 July 1983, paid into the relevant film account;
(iv) the total amount of the moneys referred to in sub-paragraph (ii), not including moneys to which sub-paragraph (iii) applies, that were, before 1 July 1983, expended in producing the film;
(v) the total amount of the moneys referred to in sub-paragraph (i) that were received after 30 June 1983 and were, upon receipt, paid into the relevant film account;
(vi) the total amount withdrawn from the relevant film account during the relevant period; and
(vii) the total amount of the moneys referred to in sub-paragraph (vi) that were, upon being withdrawn from the relevant film account, expended in producing the film;
(g) that all moneys, being capital moneys expended by persons by way of contribution to the cost of producing the film but not being exempt moneys, that are received after the time when the declaration is made will, upon their receipt, be paid into the relevant film account; and
(h) that all moneys withdrawn from the relevant film account after the time the declaration is made will, upon withdrawal, be dealt with in the prescribed manner or paid to persons as refunds of capital moneys expended by way of contribution to the cost of producing the film.
“(2) Where a person lodges a declaration in respect of a film under sub-section (1) or (5) and furnishes to the Commissioner such information in relation to the film as the Commissioner requires, the Commissioner shall decide whether the person making the declaration is, having regard to the role of the person in the production of the film, a person whom the Commissioner considers to be an appropriate person to make the declaration in respect of the film, and shall notify the person in writing of his decision.
“(3) Where—
(a) at any time after a person has lodged a declaration under sub-section (1) or (5) in respect of a film, any change occurs in the role of the person in the production of the film; and
(b) before the time when the change occurs—
(i) the person has not been notified of a decision of the Commissioner under sub-section (2) in relation to the declaration; or
(ii) the person has been notified under sub-section (2) of a decision of the Commissioner that the person is an appropriate person to make the declaration and has not been notified under sub-section (4) of a decision of the Commissioner in relation to the declaration,
the person shall, within 21 days after the change occurs, notify the Commissioner in writing of the change.
Penalty: $200.
“(4) Where, at any time (in this sub-section referred to as the ‘relevant time’) after the Commissioner has notified a person under sub-section (2) of his decision that the person is an appropriate person to make a declaration under sub-section (1) or (5) in respect of a film, the Commissioner, having regard to the role of the person in the production of the film, decides that, if the person were to make a declaration at the relevant time as to the matters specified in paragraphs (1) (g) and (h), the person would not be an appropriate person to make such a declaration, the Commissioner shall notify the person in writing of his decision.
“(5) Where—
(a) a declaration is lodged under sub-section (1) or under this sub-section by a person who has been notified by the Commissioner under sub-section (2) that the Commissioner considers the person to be an appropriate person to make the declaration; and
(b) the person dies or the Commissioner notifies the person under sub-section (4) of a decision of the Commissioner under that sub-section,
a person may lodge with the Commissioner, before the expiration of 1 month after the death or the notification under sub-section (4), as the case may be, or within such further time as the Commissioner allows, a declaration—
(c) that all moneys, being capital moneys expended by persons by way of contribution to the cost of producing the film but not being exempt
moneys, that are received after the time when the declaration is made will, upon their receipt, be paid into the relevant film account; and
(d) that all moneys withdrawn from the relevant film account after the time the declaration is made will, upon withdrawal, be dealt with in the prescribed manner or paid to persons as refunds of capital moneys expended by way of contribution to the cost of producing the film.
“(6) A reference in sub-sections (1) and (5) to exempt moneys is a reference to capital moneys that are contributed by a person who has been issued with a certificate under sub-section (7) in relation to the moneys.
“(7) The Commissioner shall, on application by a person who—
(a) has entered into a contract on or after 13 January 1983, or intends to enter into a contract, under which the person has agreed, or is to agree, to contribute capital moneys to the cost of producing a film; and
(b) has lodged an election in accordance with section 124zae in relation to the film,
issue to the person a certificate under this sub-section in relation to all capital moneys that the person may contribute to the cost of producing the film.
“(8) For the purposes of this Division, but subject to sub-section (9), a declaration made by a person under sub-section (1) shall be taken to be in force at all times after it is lodged with the Commissioner.
“(9) Where—
(a) a declaration in relation to a film is lodged under sub-section (1) or (5) by a person who has been notified by the Commissioner under sub-section (2) that the Commissioner considers the person to be an appropriate person to make the declaration;
(b) the person dies or the Commissioner notifies the person under sub-section (4) of a decision of the Commissioner under that sub-section; and
(c) a further declaration is not lodged under sub-section (5) in relation to the film by a person who is notified by the Commissioner under sub-section (2) that the person is considered by the Commissioner to be an appropriate person to lodge the declaration,
the following provisions have effect:
(d) where the declaration referred to in paragraph (a) was lodged under sub-section (1)—the declaration shall be taken, for the purposes of this Division, not to be, and never to have been, in force;
(e) where the declaration referred to in paragraph (a) was lodged under sub-section (5)—any declaration lodged under sub-section (1) in respect of the film that would, but for this sub-section, be in force shall be taken, for the purposes of this Division, not to be, and never to have been, in force.
“(10) A person who is notified of a decision of the Commissioner under sub-section (2) or (4) and is dissatisfied with the decision may, within 60 days
after receipt of the notification, post to, or lodge with, the Commissioner an objection in writing against the decision stating fully and in detail the grounds on which the person relies.
“(11) The provisions of Division 2 of Part V (other than section 185) apply in relation to an objection made under sub-section (10) in like manner as those provisions apply in relation to an objection against an assessment.
Notification regarding non-completion of film
“124zadb. Where—
(a) a person has lodged a declaration under sub-section 124zada (1) or (5) in respect of a film;
(b) the Commissioner has notified the person under sub-section 124zada (2) that the Commissioner considers the person to be an appropriate person to make the declaration and the Commissioner has not notified the person of a decision under sub-section 124zada (4) in relation to the declaration; and
(c) either of the following conditions is satisfied:
(i) at the time when the person was notified as mentioned in paragraph (b), the person was satisfied that the film would not be, or was unlikely to be, completed before the expiration of the relevant 24 month period; or
(ii) after the person was notified as mentioned in paragraph (b), the person becomes satisfied that the film will not be, or is unlikely to be, completed before the expiration of the relevant 24 month period,
the person shall, within 14 days after—
(d) in a case to which sub-paragraph (c) (i) applies—the day on which the person was notified as mentioned in paragraph (b); or
(e) in a case to which sub-paragraph (c) (ii) applies—the day on which the person becomes satisfied as mentioned in that sub-paragraph,
notify the Commissioner in writing that the person was so satisfied or became so satisfied, as the case may be.
Penalty: $200.”.
Election that Division not apply
46. Section 124zae of the Principal Act is amended—
(a) by omitting sub-section (1) and substituting the following sub-section:
“(1) A taxpayer may elect that this Division shall not apply in relation to the taxpayer in relation to a film and, where such an election is made, this Division does not apply in relation to the taxpayer in relation to that film.”; and
(b) by omitting from paragraph (2) (b) “section 124zaf” and substituting “sections 124zaf and 124zafa”.
Deductions for capital expenditure under pre 13 January 1983 contracts
47. Section 124zaf of the Principal Act is amended by inserting in paragraphs (1) (a) and (2) (a) “and before 13 January 1983” after “28 May 1981”.
48. After section 124zaf of the Principal Act the following section is inserted:
Deductions for capital expenditure under post 12 January 1983 contracts
“124zafa. (1) Subject to this Subdivision, where—
(a) a taxpayer has, under a contract entered into on or after 13 January 1983, expended capital moneys in producing, or by way of contribution to the cost of producing, a film;
(b) at the time when the moneys were expended—
(i) the taxpayer was a resident; and
(ii) a provisional certificate or a final certificate was in force in relation to the film;
(c) the Commissioner is satisfied that, at the time when the moneys were expended—
(i) the taxpayer expected to become the first owner, or one of the first owners, of the copyright in the film when that copyright came into existence; and
(ii) the taxpayer intended to use that copyright, or the taxpayer’s interest in that copyright, as the case may be, for the purpose of producing assessable income from the exhibition of the film to the public in cinemas or by way of television broadcasting or from granting rights to exhibit the film to the public in cinemas or by way of television broadcasting; and
(d) in a case where the moneys were expended by the taxpayer by way of contribution to the cost of producing the film—
(i) if the moneys were contributed after 30 June 1983—the moneys were, upon contribution, deposited in a film account opened in relation to the film;
(ii) if the moneys were contributed before 1 July 1983—the moneys were—
(a) expended before 1 July 1983 in producing the film; or
(b) on or before 1 July 1983, paid into a film account opened in relation to the film;
(iii) there is in force a declaration lodged in respect of the film in accordance with sub-section 124zada (1) by a person who has been notified by the Commissioner under sub-section 124zada (2) that the person is considered by the Commissioner to be an appropriate person to lodge the declaration in respect of the film; and
(iv) before the end of the financial year in which capital moneys were first expended (whether by the taxpayer or by another person) in producing, or by way of contribution to the cost of producing, the film, the taxpayer entered into a contract under which the taxpayer, or the taxpayer and another person or other persons, were to expend an amount of capital moneys specified in the contract as the estimated cost of producing the film,
an amount equal to 150% of the amount of the moneys expended shall be allowed as a deduction in the assessment of the taxpayer in respect of income of the year of income in which the moneys were expended by the taxpayer.
“(2) Subject to sub-section (3), where a deduction has been allowed, or would, but for this sub-section, be allowable, from the assessable income of a taxpayer of a year of income under sub-section (1) in relation to capital moneys expended by the taxpayer in producing, or by way of contribution to the cost of producing, a film and the following conditions are not satisfied:
(a) before the expiration of the relevant 24 month period—
(i) the taxpayer has used the copyright in the film or the taxpayer’s interest in the copyright, as the case may be, for the purpose of producing assessable income from the exhibition of the film to the public in cinemas or by way of television broadcasting or from granting rights to exhibit the film to the public in cinemas or by way of television broadcasting; or
(ii) the taxpayer has derived assessable income under an agreement entered into before the copyright in the film came into existence under which the taxpayer agreed, upon the copyright coming into existence, to grant rights to another person to exhibit the film to the public in cinemas or by way of television broadcasting; and
(b) the taxpayer has, by reason of the moneys being expended, become the first owner, or one of the first owners, of the copyright in the film before the expiration of the relevant 24 month period,
the deduction shall, for the purposes of this Act, be deemed not to have been, or not to be, allowable, as the case may be.
“(3) Sub-section (2) does not apply in relation to a deduction that has been allowed, or is allowable, from the assessable income of a taxpayer of a year of income in relation to capital moneys expended by the taxpayer in producing, or by way of contribution to the cost of producing, a film where—
(a) the taxpayer dies before the expiration of the relevant 24 month period; and
(b) the Commissioner is satisfied that sub-section (2) would not have applied in relation to the deduction if the taxpayer had not died.
“(4) Where—
(a) by reason that the Commissioner is satisfied in accordance with paragraph (3) (b) that sub-section (2) would not have applied in
relation to a deduction if a taxpayer had not died, sub-section (2) would not, but for this sub-section, apply in relation to the deduction; and
(b) the Commissioner later becomes satisfied that sub-section (2) would have applied in relation to the deduction if the taxpayer had not died,
sub-section (2) shall, notwithstanding sub-section (3), apply in relation to the deduction.”.
Expenditure of contributions
49. Section 124zag of the Principal Act is amended by adding at the end thereof the following sub-section:
“(2) Where—
(a) but for this section and sections 124zal and 124zam, an amount (in this sub-section referred to as the ‘relevant amount’) would be taken for the purposes of this Division to have been expended by a taxpayer by way of contribution to the cost of producing a film; and
(b) the whole or a part of the relevant amount is included in an amount that was withdrawn from a film account opened in relation to the film and was not, upon withdrawal, dealt with in the prescribed manner,
the following provisions have effect:
(c) where the whole of the relevant amount was included in the amount withdrawn from the film account—no part of the relevant amount shall be taken for the purposes of this Division to have been expended by the taxpayer;
(d) where part only of the relevant amount was included in the amount withdrawn from the film account—the relevant amount shall be reduced by that part of the relevant amount that was so included.”.
50. After section 124zag of the Principal Act the following section is inserted:
Satisfaction of Commissioner as to the future application of certain provisions
“124zaga. (1) Where—
(a) the Commissioner is at any time satisfied that—
(i) sub-section 124zafa (2) will, at a later time, apply to deem a deduction not to have been, or not to be, allowable to a taxpayer in relation to capital moneys expended in producing, or by way of contribution to the cost of producing, a film; or
(ii) section 124zag will, at a later time, apply in respect of an amount, or part of an amount, that, but for that section and sections 124zal and 124zam, would be taken for the purposes of this Division to have been expended by a taxpayer by way of contribution to the cost of producing a film; or
(b) at a time after the Commissioner is satisfied in accordance with sub-paragraph (a) (i) or (ii), the Commissioner is satisfied that sub-section 124zafa (2) will not apply in relation to the deduction, or that section 124zag will not apply in relation to the amount or the part of the amount,
the following provisions have effect:
(c) in a case to which paragraph (a) applies—sub-section 124zafa (2) or section 124zag, as the case may be, shall, for the purposes of this Subdivision, be taken to apply, and always to have applied, in relation to the deduction or in relation to the amount or the part of the amount, as the case may be; and
(d) in a case to which paragraph (b) applies—sub-section 124zafa (2) or section 124zag, as the case may be, shall, for the purposes of this Subdivision, be taken not to apply, and never to have applied, in relation to the deduction, or in relation to the amount of the part of the amount, as the case may be.
“(2) Where, at any time after the making of an assessment in relation to a taxpayer, being an assessment in the making of which sub-section 124zafa (2) or section 124zag has been applied by reason that the Commissioner was satisfied in accordance with sub-paragraph (1) (a) (i) or (ii) of this section, the taxpayer considers that the Commissioner ought to be satisfied in accordance with paragraph (1) (b) of this section that sub-section 124zafa (2) or section 124zag, as the case may be, will not apply, the taxpayer may post to, or lodge with, the Commissioner a request in writing for an amendment of the assessment to give effect to sub-section (1).
“(3) The Commissioner shall consider the request and shall serve on the taxpayer, by post or otherwise, a written notice of his decision on the request.
“(4) If the taxpayer is dissatisfied with the Commissioner’s decision on the request, the taxpayer may, within 60 days after service on the taxpayer of notice of the decision of the Commissioner, post to, or lodge with, the Commissioner an objection in writing against the decision stating fully and in detail the grounds on which the taxpayer relies.
“(5) The provisions of Division 2 of Part V (other than section 185) apply in relation to an objection made under sub-section (4) in like manner as those provisions apply in relation to an objection against an assessment.”.
Allocation of contributions expended
51. Section 124zah of the Principal Act is amended—
(a) by inserting after sub-section (1) the following sub-section:
“(1a) Where—
(a) a taxpayer has expended capital moneys by way of contribution to the cost of producing a film;
(b) an amount of moneys is withdrawn from a film account opened in relation to the film, being a film account into which the moneys expended by the taxpayer have been paid; and
(c) the amount withdrawn from the film account was not, upon withdrawal, dealt with in the prescribed manner,
then, for the purposes of this Division, so much (if any) of the moneys expended by the taxpayer as the Commissioner determines shall be taken to be included in the amount withdrawn from the film account.”; and
(b) by omitting from sub-section (2) “sub-section (1)” and substituting “this section”.
Variation of contracts
52. Section 124zan of the Principal Act is amended—
(a) by inserting in paragraph (b) “and before 13 January 1983” after “date”; and
(b) by adding at the end thereof the following sub-section:
“(2) Where the Commissioner is satisfied that—
(a) a contract or arrangement was entered into by a taxpayer before 13 January 1983 in pursuance of which the taxpayer was to expend capital moneys in producing, or by way of contribution to the cost of producing, a film (in this sub-section referred to as the ‘original film’);
(b) on or after that date, the taxpayer entered into a contract (whether with the same or another person) in pursuance of which the taxpayer was to expend capital moneys in producing, or by way of contribution to the cost of producing, the original film or another film;
(c) the expenditure by the taxpayer of some or all of the capital moneys that were to be expended in pursuance of the contract referred to in paragraph (b) was to be in lieu of the expenditure by the taxpayer of some or all of the capital moneys that were to be expended by the taxpayer in pursuance of the contract or arrangement referred to in paragraph (a); and
(d) the taxpayer entered into the contract referred to in paragraph (b) for the purpose, or for purposes that included the purpose, of obtaining a deduction under this Subdivision in accordance with section 124zafa,
the Commissioner may, for the purposes of the application of this Subdivision in relation to the capital moneys expended by the taxpayer in pursuance of the contract referred to in paragraph (b), treat that contract as if it had been entered into on the date on which the contract referred to in paragraph (a) was entered into.”.
Limitation of deductibility of revenue expenses
53. Section 124zao of the Principal Act is amended by inserting in paragraph (1) (a) “or 124zafa” after “124zaf”.
54. After Division 10c of Part III of the Principal Act the following Division is inserted:
“Division 10d—Deductions for Capital Expenditure on certain Income-Producing Buildings
Interpretation
“124zf. (1) In this Division, unless the contrary intention appears—
‘construct’ includes make;
‘eligible building’ means a building in respect of which there is an amount, or there are amounts, of qualifying expenditure;
‘residential accommodation’ includes short-term accommodation for travellers and other short-term accommodation of a residential nature.
“(2) For the purposes of the application of this Division in determining the amount of a 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, a reference in this Division, in relation to that amount of qualifying expenditure, to the prescribed part shall be read as a reference to the part of the building to which that amount of qualifying expenditure is attributable.
“(3) Subject to sub-section (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, a person who owned the prescribed part or a part of the prescribed part at a particular time shall be taken to have dealt with the prescribed part or the part of the prescribed part, as the case may be, in the prescribed manner at that time if, at that time, the person used the whole or a part of the prescribed part or of that part of the prescribed part, as the case may be, for the purpose of producing assessable income.
“(4) For the purposes of this Division, 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 a building, for the purpose of producing assessable income if, at that time, the property—
(a) was used or available for use (whether by that person or by another person or persons) wholly or principally for, or in association with, residential accommodation; or
(b) was used or for use (whether by that person or by another person or persons) wholly or principally for exhibition or display in connection with—
(i) the sale of the whole or any part of that or any other building; or
(ii) the lease of the whole or any part of that or any other building for use (whether by that person or by another person or persons) wholly or principally for, or in association with, residential accommodation.
“(5) For the purposes of this Division, where, at a particular time, the whole or a part of a building—
(a) is for use, or is used for the provision of a facility of a kind not commonly provided in a hotel, motel or guest house in Australia; and
(b) would, but for the operation of sub-section 124za (10) or (11), as the case may be, be taken to be dealt with in the prescribed manner for the purposes of Division 10c,
it shall be taken not to be used or available for use at that time for, or in association with, residential accommodation.
“(6) For the purposes of this Division, where property, being the whole or a part of a building—
(a) is, at a particular time, part of a person’s home or used or for use wholly or principally for the purpose of operating hotel, motel or guest house; and
(b) would, but for this sub-section, be taken not to be, at that time, used or for use wholly or principally for, or in association with, residential accommodation,
the property shall, subject to sub-section (5), be taken to be, at that time, used or for use wholly or principally for, or in association with, residential accommodation.
“(7) For the purposes of this Division, an eligible building or part of an eligible building shall not be taken not to have been used or available for use for a particular purpose, or in a particular manner, at a particular time if—
(a) its use for that purpose or in that manner had, at that time, ceased, by reason only of a temporary cessation of use of the building or a part of the building by reason of the construction of an extension, alteration or improvement, or the making of repairs, to the building, or
(b) it was, at that time—
(i) maintained ready for use for that purpose or in that manner; and
(ii) not used or for use for any other purpose or in any other manner,
and its use or intended use for that purpose or in that manner had not been abandoned.
“(8) For the purposes of this Division, a person shall be taken to be an eligible lessee in relation to an amount of qualifying expenditure in respect of an
eligible building at a particular time (in this sub-section referred to as the ‘relevant time’) if—
(a) the person—
(i) was, at the relevant time, the lessee of the whole, or of a part, of the part of the building to which the expenditure is attributable;
(ii) incurred that amount of qualifying expenditure in respect of the eligible building; and
(iii) was, at all times after the completion of the relevant construction, and before the relevant time, the lessee of the whole, or of a part, of the part of the building to which that expenditure is attributable; or
(b) the person was, at the relevant time, the lessee of the whole, or of a part, of the part of the building to which the qualifying expenditure is attributable and obtained the lease of that part of the building, or of a part of that part of the building, by assignment from a person who, immediately before the assignment, was an eligible lessee in relation to that amount of qualifying expenditure by virtue of the application of paragraph (a) or by virtue of a previous application of this paragraph.
“(9) References in this Division to a person shall be read as including references to a partnership or a person in the capacity of a trustee.
“(10) For the purposes of the application of this Division in determining the amount of a deduction allowable under section 124zh or 124zk in respect of an amount of qualifying expenditure, a person who owned the whole or a part of the prescribed part shall not be taken to have dealt with any part of the prescribed part in the prescribed manner at any time before the date on which the relevant construction was completed.
“(11) For the purposes of this Division, the residual capital expenditure in relation to an amount of qualifying expenditure in respect of an eligible building at any time (in this sub-section referred to as the ‘relevant time’) is the amount (if any) ascertained by deducting from that amount of qualifying expenditure the amount or the sum of the amounts that, in respect of the period commencing on the day on which the prescribed part was first used by any person for any purpose after completion of the relevant construction and ending at the relevant time, would have been allowed, or would be allowable, to a taxpayer as a deduction or deductions under section 124zh if—
(a) the taxpayer were the owner of the eligible building during the whole of that period;
(b) the taxpayer had dealt with the prescribed part in the prescribed manner during the whole of that period; and
(c) section 124zj were not applicable in relation to that deduction or any of those deductions, as the case may be.
“(12) For the purposes of the application of this Division in determining the amount of a deduction allowable under section 124zh or 124zk in respect of an amount of qualifying expenditure in respect of a building, a person who,
at a particular time (in this sub-section referred to as the ‘relevant time’), is an eligible lessee in relation to that amount of qualifying expenditure shall, subject to sub-section (15), be taken at the relevant time to be the owner of so much of the building as satisfies the following conditions, namely:
(a) is leased by the person at that time;
(b) is a part of the building to which the whole or a part of the amount of qualifying expenditure is attributable; and
(c) was, at all times after the completion of the relevant construction and before the relevant time, leased and was not, at any time after completion of the relevant construction and before the relevant time, leased by a person who was not an eligible lessee in relation to that amount of qualifying expenditure.
“(13) Where, for the purposes of the application of this Division in determining the amount of a deduction allowable under section 124zh or 124zk in respect of an amount of qualifying expenditure, a person is deemed by sub-section (12) to be the owner of a building or of a part of a building at a particular time, no other person shall be taken to be the owner of the building or of that part of the building, as the case may be, at that time, for the purposes of the application of the provisions of this Division in determining the amount of a deduction allowable under section 124zh or 124zk in respect of that amount of qualifying expenditure.
“(14) In this Division, a reference, in relation to an amount of qualifying expenditure, to the relevant construction shall be read as a reference to the construction of the building, or of the extension, alteration or improvement, as the case may be, to which the amount of qualifying expenditure is attributable.
“(15) Where—
(a) during the whole or a part of a year of income (which whole or part, as the case may be, is in this sub-section referred to as the ‘relevant period’) a taxpayer was the owner of a particular part (in this sub-section referred to as the ‘relevant part’) of the prescribed part in relation to an amount of qualifying expenditure; and
(b) during a part only of the relevant period the taxpayer was also the owner of another part of that prescribed part,
then, for the purposes of the application of this Division in relation to the taxpayer in relation to the relevant part (other than an application of this Division in relation to the whole of the prescribed part or in relation to a part of the prescribed part of which the relevant part is only a part), the taxpayer shall not be taken to have been the owner of the relevant part at any time during the part of the relevant period referred to in paragraph (b).
Qualifying expenditure
“124zg. (1) Subject to this section, where—
(a) 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;
(b) at the time when that expenditure was incurred—
(i) the building or the extension, alteration or improvement, as the case may be, was to be owned or leased by that person; or
(ii) 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;
(c) the building or the extension, alteration or improvement, as the case may be, commenced to be constructed after 19 July 1982 and construction of the building or of that extension, alteration or improvement, as the case may be, has been completed; and
(d) at the time of completion of construction of the building, or of the extension, alteration or improvement, as the case may be—
(i) 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 or was for disposal by that person to another person for use by that other person for the purpose of producing income; 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 or disposal by that person as described in sub-sub-paragraph (a); or
(ii) 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 or disposal by that person as described in sub-sub-paragraph (i) (a); 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 or disposal by that person as described in sub-sub-paragraph (i) (a),
then, for the purposes of this Division—
(e) 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
(f) 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.
“(2) For the purposes of paragraph (1) (d)—
(a) a building, or an extension, alteration or improvement to a building; or
(b) any part of a building, or of an extension, alteration or improvement to a building,
shall not be taken to be for use by a person for the purpose of producing income if the building, extension, alteration or improvement, or the part of the building, extension, alteration or improvement, as the case may be, was for use (whether by that person or by another person or persons) wholly or principally—
(c) for, or in association with, residential accommodation; or
(d) for exhibition or display in connection with—
(i) the sale of the whole or any part of that or any other building; or
(ii) the lease of the whole or any part of that or any other building for use (whether by that person or by another person or persons) wholly or principally for, or in association with, residential accommodation.
“(3) References in sub-section (1) to expenditure of a capital nature incurred in respect of the construction of a building or of an extension, alteration or improvement to a building shall be read as not including references to expenditure in respect of any property in respect of which depreciation is allowable, or would be allowable if the property were for use for the purpose of producing assessable income, under section 54 or 57ae or expenditure in respect of which a deduction is allowable, or would be allowable if the property were for use for the purpose of producing assessable income, under section 73a, 75b or 124ja or Division 10, 10aaa or 10aa.
“(4) Where there is an amount of qualifying expenditure in respect of a building or part of a building (which building or part of a building is in this sub-section referred to as the ‘relevant building’), no part of that amount, or of any amount incurred by a person in acquiring any part of the relevant building to which that amount of qualifying expenditure is attributable, shall be an allowable deduction, or be taken into account in ascertaining the amount of an allowable deduction, from the assessable income of any person of any year of income under a provision of this Act other than this Division.
Deductions in respect of qualifying expenditure
“124zh. (1) Subject to this section and section 124zj, where—
(a) there is an amount of qualifying expenditure in respect of a building; and
(b) during the whole of a year of income, a taxpayer—
(i) was the owner of the prescribed part and dealt with the prescribed part in the prescribed manner; or
(ii) was the owner of a part of the prescribed part and dealt with that part of the prescribed part in the prescribed manner,
the taxpayer is entitled to a deduction, in his assessment in respect of income of that year of income, of an amount equal to—
(c) in a case to which sub-paragraph (b) (i) applies—2½% of the amount of qualifying expenditure; and
(d) in a case to which sub-paragraph (b) (ii) applies—so much of the amount calculated in accordance with paragraph (c) as the Commissioner determines, having regard to the extent to which the amount of qualifying expenditure is attributable to the part of the prescribed part referred to in that sub-paragraph.
“(2) Subject to this section and section 124zj, where—
(a) there is an amount of qualifying expenditure in respect of a building; and
(b) during a part only of a year of income, a taxpayer—
(i) was the owner of the prescribed part and dealt with the prescribed part in the prescribed manner; or
(ii) was the owner of a part of the prescribed part and dealt with that part of the prescribed part in the prescribed manner,
the taxpayer is entitled to a deduction, in his assessment in respect of income of that year of income, of an amount equal to—
(c) in a case to which sub-paragraph (b) (i) applies—2½% of so much of that amount of qualifying expenditure as bears to that amount the same proportion as the number of whole days in that part of the year of income bears to the number of days in the year of income; and
(d) in a case to which sub-paragraph (b) (ii) applies—so much of the amount calculated in accordance with paragraph (c) as the Commissioner determines, having regard to the extent to which the amount of qualifying expenditure is attributable to the part of the prescribed part referred to in that sub-paragraph.
“(3) For the purposes of determining the amount of a deduction allowable to a taxpayer under this section in respect of an amount of qualifying expenditure in respect of an eligible building, the taxpayer shall be taken not to have dealt with any part of the prescribed part in the prescribed manner at any time after the expiration of the period of 40 years commencing on the day on which the prescribed part was first used by any person for any purpose after completion of the relevant construction.
Reduction of deductions
“124zj. (1) Where—
(a) apart from this sub-section, a deduction would be allowable to a taxpayer under section 124zh in respect of an amount of qualifying expenditure in relation to the use of the prescribed part or a part (in this sub-section referred to as the ‘relevant part’) of the prescribed part during a year of income or a part of a year of income; and
(b) during the whole or a part of the year of income, or of that part of the year of income, as the case may be—
(i) any part of the prescribed part or of the relevant part, as the case may be, was not used for the purpose of producing assessable income; or
(ii) the prescribed part or the relevant part, as the case may be, was used by the taxpayer only partly for the purpose of producing assessable income,
the amount of the deduction shall be reduced by such amount as the Commissioner considers fair and reasonable.
“(2) Where—
(a) by reason of the destruction of an eligible building or a part of an eligible building, a deduction (in this sub-section referred to as the ‘relevant deduction’) is allowable in respect of the whole or a part of the residual capital expenditure in relation to an amount of qualifying expenditure in respect of the eligible building; and
(b) in respect of any part of the period commencing on the day on which the prescribed part was first used by any person for any purpose after completion of the relevant construction and ending immediately before the time of destruction—
(i) a deduction has not been allowed and is not allowable under section 124zh to any person in respect of that amount of qualifying expenditure; or
(ii) a deduction that has been allowed or is allowable under section 124zh to any person in respect of that amount of qualifying expenditure has been reduced, or is liable to be reduced, by virtue of the application of sub-section (1) of this section,
the relevant deduction shall be reduced by such amount as the Commissioner considers fair and reasonable.
Deduction in respect of destruction of building
“124zk. (1) Subject to this section and section 124zj, where—
(a) there is an amount of qualifying expenditure in respect of a building;
(b) during a year of income, the prescribed part is destroyed;
(c) immediately before the destruction, a taxpayer owned the prescribed part or a part (in this sub-section referred to as the ‘relevant part’) of the prescribed part;
(d) at any time before the destruction, the taxpayer dealt with the prescribed part or the relevant part, as the case may be, in the prescribed manner;
(e) if the taxpayer did not deal with the prescribed part or the relevant part, as the case may be, in the prescribed manner immediately before the time of the destruction, no part of the prescribed part or of the relevant part, as the case may be, that, at the time (in this paragraph referred to as the ‘relevant time’) when the prescribed part or the
relevant part, as the case may be, was last dealt with in the prescribed manner, was used for the purpose of producing assessable income was used by any person for any purpose after the relevant time and before the time of the destruction;
(f) in a case where the taxpayer owned the whole of the prescribed part immediately before the time of the destruction, the residual capital expenditure at that time in relation to the amount of qualifying expenditure exceeds the amount (if any) received or receivable by the taxpayer (under a policy of insurance or otherwise) in respect of the destruction of the prescribed part; and
(g) in a case where the taxpayer owned a part only of the prescribed part immediately before the time of the destruction, so much of the residual capital expenditure at that time in relation to the amount of qualifying expenditure as is attributable to the relevant part exceeds the amount (if any) received or receivable by the taxpayer (under a policy of insurance or otherwise) in respect of the destruction of the relevant part,
the taxpayer is entitled, in his assessment in respect of income of the year of income, to a deduction of an amount equal to—
(h) in a case to which paragraph (f) applies—the excess referred to in that paragraph; and
(j) in a case to which paragraph (g) applies—the excess referred to in that paragraph.
“(2) Subject to this section and section 124zj, where—
(a) there is an amount of qualifying expenditure in respect of a building;
(b) during a year of income, a part (in this sub-section referred to as the ‘destroyed part’) of the prescribed part is destroyed;
(c) immediately before the destruction, a taxpayer owned the destroyed part or a part (in this sub-section referred to as the ‘relevant part’) of the destroyed part;
(d) at any time before the destruction, the taxpayer dealt with the destroyed part or the relevant part, as the case may be, in the prescribed manner;
(e) if the taxpayer did not deal with the destroyed part or the relevant part, as the case may be, in the prescribed manner immediately before the time of the destruction, no part of the destroyed part or of the relevant part, as the case may be, that, at the time (in this paragraph referred to as the ‘relevant time’) when the destroyed part or the relevant part, as the case may be, was last dealt with in the prescribed manner, was used for the purpose of producing assessable income was used by any person for any purpose after the relevant time and before the time of the destruction;
(f) in a case where the taxpayer owned the whole of the destroyed part immediately before the time of the destruction, so much of the residual capital expenditure at that time in relation to the amount of qualifying
expenditure as is attributable to the destroyed part exceeds the amount (if any) received or receivable by the taxpayer (under a policy of insurance or otherwise) in respect of the destruction of the destroyed part; and
(g) in a case where the taxpayer owned a part only of the destroyed part immediately before the time of the destruction, so much of the residual capital expenditure at that time in relation to the amount of qualifying expenditure as is attributable to the relevant part exceeds the amount (if any) received or receivable by the taxpayer (under a policy of insurance or otherwise) in respect of the destruction of the relevant part,
the taxpayer is entitled, in his assessment in respect of income of the year of income, to a deduction of an amount equal to—
(h) in a case to which paragraph (f) applies—the excess referred to in that paragraph; and
(j) in a case to which paragraph (g) applies—the excess referred to in that paragraph.
“(3) Where—
(a) a building or a part of a building is destroyed; and
(b) an amount is received or receivable by a person who, immediately before the time of the destruction, owned the whole or a part of the building in respect of the disposal of any property (in this sub-section referred to as the ‘relevant property’) that, immediately before the destruction, formed part of the building or of that part of the building, as the case may be, that was destroyed,
the amount so received or receivable, reduced by any demolition costs incurred in respect of the relevant property, shall be taken to be an amount received or receivable by the person in respect of the destruction of the property of which the relevant property so formed part.
“(4) Where—
(a) an amount is received or receivable by a person under a policy of insurance or otherwise in respect of the destruction of property; and
(b) it is required to be determined for the purposes of this Division how much of the amount received or receivable was received or is receivable in respect of part of the property referred to in paragraph (a),
so much of the amount referred to in paragraph (a) as, in the opinion of the Commissioner, relates to the part of the property referred to in paragraph (b) shall be taken to have been received or to be receivable, as the case may be, by the person in respect of the part of the property referred to in paragraph (b).”.
Rebate of tax for certain primary producers
55. Section 156 of the Principal Act is amended—
(a) by omitting from paragraph (5) (a) “section 98” and substituting “sub-section 98 (1) or (2)”; and
(b) by omitting from sub-section (6) “section 98” and substituting “sub-section 98 (1) or (2)”.
Amount of instalment of tax
56. Section 221ae of the Principal Act is amended by omitting from sub-section (3) “or Division 18 of Part III” and substituting “, sub-section 98a (2), Division 18 of Part III or Division 3a of this Part,”.
Estimated income tax
57. Section 221ag of the Principal Act is amended by omitting from sub-section (8) “under Division 18 of Part III” and substituting “sub-section 98a (2), Division 18 of Part III or Division 3a of this Part,”.
Interpretation
58. (1) Section 221a of the Principal Act is amended—
(a) by omitting paragraph (a) of the definition of “salary or wages” in sub-section (1) and substituting the following paragraph:
“(a) under a contract that is wholly or principally for the labour of the person to whom the payments are made, where—
(i) the person making the payments under the contract is not a natural person; or
(ii) the payments under the contract are not wholly or principally of a private or domestic nature;”;
(b) by adding at the end of the definition of “salary or wages” in sub-section (1) “or prescribed payments within the meaning of Division 3a”; and
(c) by omitting sub-section (2) and substituting the following sub-section:
“(2) For the purposes of the definition of ‘salary or wages’ in sub-section (1) —
(a) where an amount to which section 26ad applies is paid to a person, an amount equal to the amount, or the sum of the amounts, that will, by the application of that section in relation to the payment, be included in the assessable income of the person to whom the payment is made shall be taken to be an assessable retirement amount;
(b) a payment made to a person under a contract that is wholly or principally for the labour of any person shall be taken to be a payment made under a contract that is wholly or principally for the labour of the person to whom the payment is made if—
(i) in the case of a payment that is made in respect of labour that has been performed, in whole or in part, before the time when the payment is made—the whole or principal part of the labour that was performed before the time when the payment is made was performed by the person to whom the payment is made; and
(ii) in the case of a payment that is made in respect of labour the whole of which is to be performed after the time when the payment is made—the person making the payment can reasonably be expected to believe that the person to whom the payment is made will perform the whole or principal part of the labour in respect of which the payment is made;
(c) a reference to a contract that is wholly or principally for the labour of a person shall be read as including a reference to a contract that is wholly or principally—
(i) for the performance or presentation by a person of, or the participation by a person in, any music, play, dance, entertainment, address, sport, display, promotional activity, exhibition, or any similar activity (being a similar activity that involves the exercise by the person of intellectual, artistic, musical, physical or other personal skills) or for the performance of any services in connection with any such activity; or
(ii) for the performance of services by a person in, or in connection with, the making of any film, tape or disc or of a television or radio broadcast; and
(d) a payment made by a natural person shall, without limiting the generality of the definition, be taken not to be of a private or domestic nature if it is made by the person in his capacity as trustee of a trust estate or as a member of a religious, charitable, social, cultural, recreational or other organization or body.”.
(2) The amendments made by this section apply in relation to payments made on or after 1 September 1983.
Employer not accounting for deductions
59. Section 221p of the Principal Act is amended by omitting sub-section (2) and substituting the following sub-section:
“(2) Notwithstanding anything contained in any other law of the Commonwealth, or in any law of a State or of the Northern Territory—
(a) an amount payable to the Commissioner by a trustee in pursuance of this section has priority over all other debts (other than amounts payable under sub-section 221yhj (3)), whether preferential, secured or unsecured; and
(b) where an amount is payable by a trustee to the Commissioner under sub-section 221yhj (3), an amount payable by the trustee in pursuance of this section ranks equally with the amount payable under sub-section 221yhj (3) in priority to all other debts, whether preferential, secured or unsecured.”.
Interpretation
60. Section 221ya of the Principal Act is amended—
(a) by inserting after the definition of “estimated taxable income” in sub-section (1) the following definition:
“ ‘prescribed payment’ means a prescribed payment as defined in section 221yha;”;
(b) by inserting in paragraph (5) (b) “or 124zafa” after “124zaf”;
(c) by omitting from paragraph (5) (d) “section 124zaf” and substituting “sections 124zaf and 124zafa”; and
(d) by omitting from paragraph (5) (e) “section 124zaf” and substituting “sections 124zaf and 124zafa”.
Amount of provisional tax
61. Section 221yc of the Principal Act is amended—
(a) by inserting in sub-section (1a) “, or prescribed payments” after “wages”; and
(b) by adding at the end of sub-section (5) “, less the amount that the Commissioner estimates will be the sum of any amounts deducted under Division 3a from prescribed payments that have been, or will be, made to the taxpayer during the year of income.”.
Provisional tax on estimated income
62. Section 221yda of the Principal Act is amended—
(a) by inserting after sub-paragraph (1) (d) (i) the following sub-paragraph:
“(ia) prescribed payments;”;
(b) by inserting after paragraph 221yda (1) (d) the following paragraph:
“(daa) the amount included in the estimated taxable income that represents prescribed payments from which deductions have been, and will be, made in accordance with Division 3a;”;
(c) by inserting after paragraph (1) (e) the following word and paragraph:
“; and (f) the amount of the deductions that have been, and will be, made under Division 3a from prescribed payments that have been, and will be, made to him during the year of income,”;
(d) by inserting in sub-paragraph (2) (a) (i) “of prescribed payments,” after “wages,”; and
(e) by omitting paragraph (2) (b) and substituting the following word and paragraph:
“and (b) by deducting from the amount calculated in accordance with paragraph (a) so much of the estimated amounts of deductions referred to in paragraphs (1) (e) and (f), as shown in the statement, as is estimated by the
Commissioner to represent deductions that have been, and will be, made in accordance with sections 221c and 221d, or Division 3a, as the case may be.”.
Additional tax where income underestimated
63. Section 221ydb of the Principal Act is amended by omitting paragraph (1a) (b) and substituting the following paragraph:
“(b) the reference in paragraph (a) of that sub-section to the amount of the provisional tax payable in respect of the estimated taxable income shall, in the case of a taxpayer whose income of the year of income includes salary or wages, or prescribed payments, be read as a reference to an amount equal to the sum of that provisional tax and—
(i) where the income of the taxpayer of the year of income includes salary or wages and sub-paragraph (iii) does not apply—the amount of the deductions made from that salary or wages in accordance with sections 221c and 221d, a State income tax law or section 78 of the Income Tax (Arrangements with the States) Act 1978;
(ii) where the income of the taxpayer of the year of income includes prescribed payments and sub-paragraph (iii) does not apply—the amount of any deductions made under Division 3a from those prescribed payments; and
(iii) where the income of the taxpayer of the year of income includes salary or wages and prescribed payments—the amounts that, but for this sub-paragraph, would be applicable under sub-paragraphs (i) and (ii) in relation to the salary or wages and the prescribed payments.”.
Reduction of provisional tax
64. Section 221ydc of the Principal Act is amended by inserting in sub-section (1) “, sub-section 98a (2)” after “section 45”.
65. After section 221yh of the Principal Act the following Division is inserted:
“Division 3a—Collection of tax in respect of certain payments for work
Interpretation
“221yha. (1) In this Division, unless the contrary intention appears—
‘construction permit’ means a permit or other approval that is required by a law of the Commonwealth, a State or a Territory in connection with the undertaking or carrying out of a construction project;
‘construction project’ means—
(a) the construction, erection, installation, alteration, modification, repair or improvement of a structure;
(b) the demolition, destruction, dismantling or removal of a structure; or
(c) the undertaking of earthworks or the clearing of land, and includes—
(d) the installation in, or in connection with, a structure of a system of, or device for, heating, insulation, lighting, air-conditioning, ventilation, power supply, drainage, sanitation, water supply, security or fire protection;
(e) the painting or decorating of a structure;
(f) landscape gardening; and
(g) such other activities in relation to structures or land as may be prescribed for the purposes of this definition;
‘contract’ means a contract, whether express or implied, whether or not in writing and whether or not enforceable, or intended to be enforceable, by legal proceedings;
‘deduction exemption certificate’ means a certificate issued by the Commissioner under section 221yhq;
‘deduction form’, in relation to a prescribed payment, means a document in a form that is published by the Commissioner in the Gazette for the purposes of this definition and is applicable to the period within which the prescribed payment is made;
‘deduction variation certificate’ means a certificate issued by the Commissioner under section 221yhp;
‘government body’ means the Commonwealth, a State or the Northern Territory, or an authority of the Commonwealth, of a State or of the Northern Territory;
‘householder notification form’ means a document in a form published by the Commissioner in the Gazette for the purposes of this definition;
‘issuing authority’ means a person or body that issues construction permits;
‘month’ means any of the 12 months of the year;
‘payee’ means a person who receives, or is entitled to receive, a prescribed payment under a contract;
‘paying authority’ means a person who makes, or is liable to make, a prescribed payment;
‘paying authority notification form’ means a document in a form published by the Commissioner in the Gazette for the purposes of this definition;
‘payment’ means a payment that is made, or is liable to be made, under a contract the performance of which, in whole or in part, involves the performance of work (whether or not by the person to whom the payment is made or is liable to be made), but does not include—
(a) a payment of salary or wages within the meaning of section 221a, other than salary or wages to which paragraph (a) of the definition of “salary or wages” in sub-section 221a (1) applies; or
(b) a payment of exempt income;
‘person’ includes a company and a government body;
‘prescribed certificate’ means a deduction exemption certificate, a reporting exemption certificate or a deduction variation certificate;
‘prescribed payment’ means a payment of a kind declared by the regulations to be a prescribed payment for the purposes of this Division;
‘reconciliation form’, in relation to prescribed payments made by an eligible paying authority during a month, means a document in a form that is published by the Commissioner in the Gazette for the purposes of this definition and is applicable to the period within which the month occurs;
‘reporting exemption certificate’ means a certificate issued by the Commissioner under section 221yhr;
‘structure’ includes a part of a structure;
‘work’ includes—
(a) services; and
(b) work of a professional, technical, skilled or artistic kind,
and, without limiting the generality of the foregoing, includes activities of a kind referred to in sub-paragraph 221a (2) (c) (i) or (ii);
“(2) Where—
(a) each of 2 or more activities would, but for this sub-section, constitute a construction project; and
(b) the activities are so related that, taken together, they are reasonably capable of being regarded as a single activity,
the activities shall, for the purposes of the application of this Division, be taken to be a single construction project and not to constitute separate construction projects.
“(3) Where—
(a) a natural person enters into a contract or contracts for the undertaking or carrying out of a construction project by another person;
(b) the payments to be made by the natural person under the contract or contracts are wholly or principally of a private or domestic nature; and
(c) the cost of the construction project, including the cost of—
(i) goods or materials used in, or forming part of, the construction project; and
(ii) surveying, design or other activities preliminary to the construction project,
may reasonably be expected to exceed $10,000,
the natural person is, for the purposes of this Division, a householder in relation to any prescribed payment that is made, or is liable to be made, by the natural person under the contract or contracts.
“(4) For the purposes of this Division, a person who is a paying authority in relation to a prescribed payment is an eligible paying authority in relation to the prescribed payment if—
(a) the person is not a natural person; or
(b) the person is a natural person and—
(i) the person is a householder in relation to the payment; or
(ii) the payment is not wholly or principally of a private or domestic nature.
“(5) Without limiting, the generality of sub-sections (3) and (4), a prescribed payment made by a natural person shall be taken not to be of a private or domestic nature if it is made by the person in his capacity as trustee of a trust estate or as a member of a religious, charitable, social, cultural, recreational or other organization or body.
“(6) For the purposes of this Division, a payee shall be taken to have properly furnished a deduction form to an eligible paying authority in relation to a prescribed payment if—
(a) in a case where the prescribed payment is not the first prescribed payment made to the payee by the eligible paying authority during the month in which the prescribed payment is made—the payee has, before the time of making of the first prescribed payment made to the payee by the eligible paying authority during that month, but not earlier than 7 days before the commencement of that month, completed in respect of that month the part of a deduction form applicable to the payee and delivered the form to the eligible paying authority; and
(b) in any other case—the payee has, before the time of making of the prescribed payment but not earlier than 7 days before the commencement of the month in which the prescribed payment is made, completed in respect of that month the part of a deduction form applicable to the payee and delivered the form to the eligible paying authority.
Provision of information to Commissioner
“221yhb. (1) Subject to sub-section (3), where a person—
(a) is, on 1 September 1983, an eligible paying authority, other than a householder, in relation to a prescribed payment that is liable to be made under a contract; or
(b) after 1 September 1983, enters into a contract under which the person is liable to make a prescribed payment in relation to which the person is an eligible paying authority other than a householder,
the person shall, in relation to the prescribed payment, furnish to the Commissioner, before 15 September 1983 or within 14 days after the person enters into the contract, as the case may be, a paying authority notification form.
“(2) Where, before 1 September 1983, a person is of the opinion that, on 1 September 1983, the person will be a person to whom paragraph (1) (a) applies, the person may, before 1 September 1983, furnish to the Commissioner a paying authority notification form.
“(3) A person is not required under sub-section (1) to furnish a paying authority notification form to the Commissioner if the person has previously furnished a paying authority notification form to the Commissioner under that sub-section or under sub-section (2).
“(4) Subject to sub-section (6), where a person is, on 1 September 1983, a householder in relation to a prescribed payment or prescribed payments liable to be made by the person under a contract or contracts for the undertaking or carrying out of a construction project, the person shall furnish to the Commissioner, before 15 September 1983, a householder notification form in relation to the construction project.
“(5) Where, before 1 September 1983, a person is of the opinion that, on 1 September 1983, the person will be a person to whom sub-section (4) applies in relation to a construction project, the person may, before 1 September 1983, furnish to the Commissioner a householder notification form in relation to that construction project.
“(6) A person is not required under sub-section (4) to furnish a householder notification form to the Commissioner in relation to a construction project if the person has previously furnished a householder notification form to the Commissioner under sub-section (5) in relation to that construction project.
“(7) Subject to sub-section (8), where—
(a) after 1 September 1983, a person enters into a contract for the undertaking or carrying out of a construction project, or part of a construction project, by another person; and
(b) the person is a householder in relation to a prescribed payment or prescribed payments that the person is liable to make under the contract,
the person shall, within 14 days after the contract is entered into, furnish to the Commissioner a householder notification form in relation to the construction project.
“(8) A person is not required under sub-section (7) to furnish a householder notification form to the Commissioner in relation to a construction project if the person has previously furnished a householder notification form to the Commissioner under sub-section (4), (5) or (7) in relation to the construction project.
“(9) Where sub-section (4), (5) or (7) applies in relation to a person in relation to a construction project that is completed on or after 1 September 1983, the person shall, within 14 days after the completion of the construction project, give notice in writing to the Commissioner of the completion of the construction project.
“(10) Where, on or after 1 September 1983, an issuing authority issues a construction permit in respect of a construction project, the issuing authority shall, in relation to the construction project and within 14 days after the end of the month in which it issues the permit, or within such further period as the Commissioner allows, furnish to the Commissioner such information as the Commissioner, by notice published in the Gazette, requires for the purposes of this sub-section.
“(11) Where a person other than a government body fails to comply with any of the requirements of this section (other than sub-section (10)) within the period within which the requirement is required to be complied with, the following provisions have effect:
(a) the person is guilty of an offence punishable, on conviction, by a fine not exceeding $50;
(b) the obligation to comply with the requirement continues, notwithstanding that that period has expired, until the requirement is complied with;
(c) the person is guilty of a separate and further offence in respect of each day during which the failure to comply with the requirement continues, being a day after the expiration of that period; and
(d) the penalty applicable to each such separate and further offence is a fine not exceeding $50.
Duties of payees
“221yhc. (1) Subject to section 221yhr, a person who becomes entitled to receive a prescribed payment from an eligible paying authority shall, before the prescribed payment is made but not earlier than 7 days before the commencement of the month in which the prescribed payment is made, complete in respect of the month the part of a deduction form applicable to the payee and deliver the form to the eligible paying authority.
“(2) Where a person becomes entitled to receive 2 or more prescribed payments from the same eligible paying authority during any month, the person is not required to comply with sub-section (1) in relation to the second or any subsequent prescribed payment to be made to the person by the eligible paying authority during the month.
“(3) A person, other than a government body, who contravenes sub-section (1) is guilty of an offence punishable, on conviction, by a fine not exceeding $50.
“(4) This section does not apply in relation to a prescribed payment made before 1 September 1983.
Duties of eligible paying authorities
“221yhd. (1) A person who is an eligible paying authority in relation to a prescribed payment or prescribed payments that the person is liable to make during a month (in this sub-section referred to as the ‘relevant month’) shall—
(a) subject to section 221yhq, deduct the relevant amount from each prescribed payment in relation to which the person is not a householder; and
(b) subject to sub-sections (2) and (3) and section 221yhr, within 14 days after the end of the relevant month—
(i) in relation to each payee who has properly furnished a deduction form to the eligible paying authority in relation to prescribed payments made or liable to be made to the payee
during the relevant month—complete the part of the deduction form applicable to the paying authority;
(ii) in relation to each payee in relation to whom sub-paragraph (i) does not apply—complete in respect of the relevant month the part of a deduction form applicable to the eligible paying authority and so much of the part applicable to the payee as the eligible paying authority is able to complete;
(iii) complete a reconciliation form in relation to all prescribed payments made by the eligible paying authority during the relevant month;
(iv) if no amount has been deducted under paragraph (a) from any prescribed payment made by the eligible paying authority during the relevant month—forward to the Commissioner the deduction forms together with the reconciliation form;
(v) in a case to which sub-paragraph (iv) does not apply—
(a) pay to the Commissioner all amounts deducted under paragraph (a) from prescribed payments made by the eligible paying authority during the relevant month; and
(b) at the time of making the payment referred to in sub-sub-paragraph (a), forward to the Commissioner the deduction forms and reconciliation form completed in respect of the relevant month; and
(vi) deliver to each payee a copy of the deduction form completed by the eligible paying authority in accordance with sub-paragraph (i) or (ii) in relation to the payee in respect of the relevant month.
“(2) The Commissioner may, in such instances and to such extent as he thinks fit, by notice in writing served on an eligible paying authority—
(a) extend the period within which the requirements of paragraph (1) (b) are required to be complied with; or
(b) vary the requirements of paragraph (1) (b) in their application in relation to the eligible paying authority in relation to prescribed payments to which section 221yhq applies.
“(3) An eligible paying authority, other than a government body, that contravenes or fails to comply with a requirement of sub-section (1) (including a requirement as varied under sub-section (2)) is guilty of an offence punishable, on conviction, by—
(a) in a case to which paragraph (1) (a) applies—a fine not exceeding $1,000;
(b) in a case to which sub-sub-paragraph (1) (b) (v) (a) applies—
(i) in the case of an individual—a fine not exceeding $5,000 or imprisonment for a period not exceeding 12 months, or both; and
(ii) in any other case—a fine not exceeding $25,000; or
(c) in any other case—a fine not exceeding $2,000.
“(4) Where a person is convicted of an offence to which paragraph (3) (a) applies in relation to an amount required to be deducted from a prescribed payment, the court may, in addition to imposing a penalty under sub-section (3) in respect of the offence, order the person to pay to the Commissioner as a penalty a sum not exceeding the amount required to be deducted.
“(5) In sub-section (1), ‘relevant amount’, in relation to a deduction that is to be made from a prescribed payment by an eligible paying authority to a payee, means—
(a) where the payee has properly furnished a deduction form to the eligible paying authority in relation to the prescribed payment—
(i) in a case to which neither sub-paragraph (ii) nor sub-paragraph (iii) applies—the amount determined in accordance with regulations for the purposes of this sub-paragraph in relation to prescribed payments or prescribed payments of a class that includes the prescribed payment;
(ii) where—
(a) the payment is made to the payee in person;
(b) the payee has, in the deduction form, declared that a deduction variation certificate is in force varying the amount otherwise to be deducted from the prescribed payment under regulations for the purposes of sub-paragraph (i);
(c) the payee has produced a deduction variation certificate varying the amount otherwise to be deducted from the prescribed payment under regulations for the purposes of sub-paragraph (i); and
(d) the eligible paying authority has no reasonable grounds for believing that the deduction variation certificate has been revoked,
the amount to be deducted under those regulations as varied as mentioned in sub-sub-paragraph (c); or
(iii) where—
(a) the payment is not made to the payee in person; and
(b) the payee has, in the deduction form, declared that a deduction variation certificate is in force varying, as specified in the declaration, the amount otherwise to be deducted from the prescribed payment under regulations for the purposes of sub-paragraph (i),
the amount to be deducted under the regulations, varied as specified in the declaration; or
(b) in any other case—the amount that would be applicable under sub-paragraph (a) (i) if that sub-paragraph were applicable in relation
to the prescribed payment, increased by an amount equal to 15% of the prescribed payment.
“(6) This section does not apply in relation to a prescribed payment made before 1 September 1983.
Deduction forms to be forwarded to Commissioner
“221yhe. (1) A payee shall forward to the Commissioner with the return to be furnished by the payee under section 161 in relation to a year of income any deduction form delivered to the payee under sub-paragraph 221yhd (1) (b) (vi) that relates to prescribed payments made to the payee during the year of income.
“(2) A person, other than a government body, who fails to comply with the requirements of sub-section (1) is guilty of an offence punishable, on conviction, by a fine not exceeding $1,000.
Credits in respect of deductions from prescribed payments
“221yhf. (1) Subject to sub-sections (4) and (5), where—
(a) the Commissioner receives a deduction form or deduction forms in relation to deductions made in a year of income from prescribed payments to a person, not being a partnership or the trustee of a trust estate; and
(b) an assessment has been made of the tax payable, or the Commissioner is satisfied that no tax is payable, by the person in relation to the year of income,
the person is entitled to a credit of an amount equal to the amount of the deductions recorded in the form or forms.
“(2) Subject to sub-sections (4) and (5), where—
(a) the Commissioner receives a deduction form or deduction forms in relation to deductions made in a year of income from prescribed payments to a partnership;
(b) the return of income of the partnership in relation to the year of income has been furnished to the Commissioner; and
(c) an assessment has been made of the tax payable, or the Commissioner is satisfied that no tax is payable, in relation to the year of income by a partner in the partnership whose individual interest in the net income or partnership loss of the partnership is wholly or partly attributable to the prescribed payments,
the partner is entitled to a credit of an amount equal to so much of the sum of the deductions as bears to that sum the same proportion as so much of that individual interest as is attributable to the prescribed payments bears to so much of the net income or partnership loss as is attributable to the prescribed payments.
“(3) Subject to sub-sections (4) and (5), the following provisions have effect where the Commissioner receives a deduction form or deduction forms in
relation to deductions made in a year of income from prescribed payments made to the trustee of a trust estate:
(a) where—
(i) a share of the net income of the. trust estate is included in the assessable income of a beneficiary in the trust estate under section 97, being a share that is wholly or partly attributable to the prescribed payments; and
(ii) an assessment has been made of the tax payable, or the Commissioner is satisfied that no tax is payable, by the beneficiary in relation to the year of income,
the beneficiary is entitled to a credit of an amount equal to so much of the sum of the deductions as bears to that sum the same proportion as so much of that share of the net income of the trust estate as is attributable to the prescribed payments bears to so much of the net income of the trust estate as is attributable to the prescribed payments;
(b) where—
(i) the trustee is liable to be assessed under section 98 in respect of a share of the net income of the trust estate to which a beneficiary is presently entitled, being a share that is wholly or partly attributable to the prescribed payments; and
(ii) an assessment has been made of the tax payable, or the Commissioner is satisfied that no tax is payable, by the trustee in respect of that share,
the trustee is entitled to a credit of an amount equal to so much of the sum of the deductions as bears to that sum the same proportion as so much of that share of the net income of the trust estate as is attributable to the prescribed payments bears to so much of the net income of the trust estate as is attributable to the prescribed payments;
(c) where—
(i) the trustee is liable to be assessed under section 99 or 99a in respect of the net income, or a part of the net income, of the trust estate and that net income or part is wholly or partly attributable to the prescribed payments; and
(ii) an assessment has been made of the tax payable, or the Commissioner is satisfied that no tax is payable, by the trustee under those sections in respect of that net income or part,
the trustee is entitled to a credit of an amount equal to so much of the sum of the deductions as bears to that sum the same proportion as so much of the net income or part of the net income in respect of which the trustee is so liable to be assessed as is attributable to the prescribed payments bears to so much of the net income of the trust estate as is attributable to the prescribed payments.
“(4) Sub-sections (1), (2) and (3) do not apply where the Commissioner is satisfied that a deduction form received by him records, as a deduction from a
prescribed payment, an amount that was not deducted from a prescribed payment.
“(5) Where, in relation to a deduction that the Commissioner is satisfied was made from a prescribed payment—
(a) a deduction form has not been received by the Commissioner; or
(b) the Commissioner is satisfied that particulars contained in a deduction form received by him in relation to the deduction (including particulars relating to the payee in relation to the prescribed payment from which the deduction was made) are incorrect,
sub-sections (1), (2) and (3) of this section apply as if the Commissioner had received a deduction form in relation to the deduction that recorded particulars in relation to the deduction that the Commissioner is satisfied are correct.
“(6) Where a person has become entitled to a credit under sub-section (5) in relation to an amount deducted from a prescribed payment in a case to which paragraph (5) (a) applies, the person is not entitled to receive any further credit on receipt by the Commissioner of a deduction form in relation to that amount.
Application of credits
“221yhg. (1) Subject to this section, the amount of a credit to which a person is entitled by virtue of this Division is a debt due and payable to that person by the Commissioner on behalf of the Commonwealth.
“(2) Where, in a case to which neither sub-section (3) nor (4) applies, a person is entitled to a credit under section 221yhf, the Commissioner shall—
(a) if the amount of the credit does not exceed the tax payable by the person under an assessment in relation to the year of income in which the deductions to which the credit relates were made—apply the amount of the credit in payment or part payment of that tax; and
(b) if the amount of the credit exceeds the tax payable—apply—
(i) so much of the amount of the credit as does not exceed the tax in payment of the tax; and
(ii) so much of the excess as does not exceed the amount of any other tax payable by the person in payment or part payment of that other tax.
“(3) Where the trustee of a trust estate is entitled to a credit under paragraph 221yhf (3) (b) in relation to a share of a beneficiary of the net income of the trust estate of a year of income, the Commissioner shall—
(a) if the amount of the credit does not exceed the tax payable in respect of that share—apply the amount of the credit in payment or part payment of that tax; and
(b) if the amount of the credit exceeds the tax payable in respect of that share—apply—
(i) so much of the amount of the credit as does not exceed the tax payable in respect of that share in payment of the tax; and
(ii) so much of the excess as does not exceed the amount of any tax payable by the trustee under section 98 in respect of a share of the beneficiary of the net income of the trust estate of any other year of income in payment or part payment of that other tax.
“(4) Where the trustee of a trust estate is entitled to a credit under paragraph 221yhf (3) (c) in relation to the net income or a part of the net income of the trust estate, the Commissioner shall—
(a) if the amount of the credit does not exceed the tax payable under section 99 or 99a in respect of that net income or part—apply the amount of the credit in payment or part payment of that tax; and
(b) if the amount of the credit exceeds the tax payable under section 99 or 99a in respect of that net income or part—apply—
(i) so much of the amount of the credit as does not exceed that tax in payment of that tax; and
(ii) so much of the excess as does not exceed the amount of any tax payable by the trustee under section 99 or 99a in respect of the net income or a part of the net income of the trust estate of any other year of income in payment or part payment of that other tax.
“(5) Where, under sub-section (2), (3) or (4), the Commissioner has applied an amount of a credit in payment of an amount of tax payable by a person, the person shall be deemed to have paid the amount so applied in payment of the tax and at the time at which it was so applied or at such earlier time as the Commissioner determines.
“(6) Where the amount, or the sum of the amounts, applied or paid by the Commissioner as a credit to which a person is entitled under this Division exceeds the amount of the credit to which the person is so entitled, the Commissioner may recover the amount of the excess as if it were income tax due and payable by that person.
“(7) In this section—
(a) a reference to tax payable by a person other than a trustee is a reference to an amount payable by the person to the Commonwealth under, or by virtue of, this Act;
(b) a reference to tax payable by the trustee of a trust estate in respect of a share of a beneficiary of the net income of the trust estate of a year of income is a reference to any amount payable by the trustee to the Commonwealth under, or by virtue of, this Act in relation to the beneficiary in relation to the year of income; and
(c) a reference to tax payable by the trustee of a trust estate under section 99 or 99a in respect of the net income or a part of the net income of the trust estate of a year of income is a reference to any amount payable by the trustee to the Commonwealth under, or by virtue of, this Act in relation to the trust estate in relation to the year of income, not being
an amount payable by the trustee in relation to a particular beneficiary.
Failure to make deductions from prescribed payments
“221yhh. (1) Where an eligible paying authority other than a government body fails, at the time of making a prescribed payment to a payee, to deduct from the payment the amount required to be deducted under this Division, the eligible paying authority is liable to pay to the Commissioner, by way of penalty—
(a) an amount (in this section referred to as the ‘undeducted amount’) equal to the amount that the eligible paying authority failed to deduct; and
(b) an amount equal to 20% per annum of so much of the undeducted amount as remains unpaid, computed from the expiration of the period within which the amount that the eligible paying authority failed to deduct would have been required to be paid to the Commissioner.
“(2) Where an eligible paying authority, being a government body other than the Commonwealth, fails, at the time of making a prescribed payment to a payee, to deduct from the payment the amount required to be deducted under this Division, the eligible paying authority is liable to pay to the Commissioner, by way of penalty, an amount equal to 20% per annum of the undeducted amount in respect of the period commencing on the expiration of the period within which the amount that the eligible paying authority failed to deduct would have been required to be paid to the Commissioner and ending on the day on which the whole of the amount payable by the eligible paying authority under this sub-section in respect of the undeducted amount is paid.
“(3) If in any case in which a person is liable to pay an amount to the Commissioner under sub-section (1), a prosecution for an offence against this Division is instituted in respect of the same subject matter, the amount shall not be payable unless and until the prosecution is withdrawn.
Failure to pay amounts deducted to Commissioner
“221yhj. (1) Where an amount payable to the Commissioner by an eligible paying authority other than the Commonwealth under sub-paragraph 221yhd (1) (b) (v) remains unpaid after the expiration of the period within which it is required to be paid—
(a) the amount continues to be payable by the eligible paying authority to the Commissioner; and
(b) the eligible paying authority is liable to pay to the Commissioner, by way of penalty—
(i) in the case of an eligible paying authority being a government body—an amount at the rate of 20% per annum on any amount referred to in paragraph (a) remaining unpaid, computed from the expiration of that period; and
(ii) in any other case—
(a) an amount equal to 20% of the amount referred to in paragraph (a); and
(b) an amount at the rate of 20% per annum on any amount referred to in paragraph (a) or sub-sub-paragraph (a) remaining unpaid, computed from the expiration of that period.
“(2) If in any case in which a person is liable to pay an amount to the Commissioner under sub-sub-paragraph (1) (b) (ii) (a), a prosecution for an offence against this Division is instituted in respect of the same subject matter, the amount shall not be payable unless and until the prosecution is withdrawn.
“(3) Where—
(a) an amount deducted from a prescribed payment is payable to the Commissioner under this Division by a person; and
(b) the property of that person has become vested in, or the control of the property of that person has passed to, a trustee,
the trustee is liable to pay the amount to the Commissioner.
“(4) Notwithstanding anything contained in any other law of the Commonwealth, or in any law of a State or of the Northern Territory—
(a) an amount payable to the Commissioner by a trustee under sub-section (3) has priority over all other debts (other than amounts payable under sub-section 221p (1)), whether preferential, secured or unsecured; and
(b) where an amount is payable by a trustee to the Commissioner under sub-section 221p (1), an amount payable by the trustee under sub-section (3) of this section ranks equally with the amount payable under sub-section 221p (1) in priority to all other debts, whether preferential, secured or unsecured.
“(5) Where a trustee, being a trustee of an estate of a bankrupt or the liquidator of a company that is being wound up, is liable to pay an amount to the Commissioner under this section, sub-section (4) does not have the effect that the amount is payable in priority to any costs, charges or expenses of the administration of the estate or of the winding up of the company (including costs of a creditor or other person upon whose petition the sequestration order or the winding up order (if any) was made and remuneration of the trustee) that are lawfully payable out of the assets of the estate or of the company except where, in the case of the winding up of a company, the Crown in right of a State or of the Northern Territory or any other creditor is entitled to the payment of a debt by the liquidator, in priority to all or any of those costs, charges and expenses and has not waived that priority.
Failure to furnish deduction form, &c.
“221yhk. (1) Where—
(a) a person who is an eligible paying authority in relation to a prescribed payment but is not a government body fails, within the required time, to forward a deduction form to the Commissioner, in accordance with sub-paragraph 221yhd (1) (b) (iv) or sub-sub-paragraph 221yhd (1) (b) (v) (b) (including that sub-paragraph or sub-sub-paragraph, as the case may be, as varied under sub-section 221yhd (2)), in relation to a prescribed payment; and
(b) the person is a householder in relation to the prescribed payment or is required, by sub-section 221yhq (9) not to make a deduction from the prescribed payment,
the person is liable to pay to the Commissioner, by way of penalty—
(c) where the person is a householder in relation to the prescribed payment and paragraph (d) does not apply—the amount that the person would be required to pay to the Commissioner in respect of the prescribed payment under paragraphs 221yhh (1) (a) and (b) if the person—
(i) were not a householder;
(ii) were required to deduct from the prescribed payment an amount determined in accordance with sub-paragraph 221yhd (5) (a) (i); and
(iii) had failed to deduct that amount;
(d) where the person is a householder in relation to the prescribed payment and, at the time when the prescribed payment was made, there was in force a deduction exemption certificate issued to the payee and applicable to the time when the payment was made—$50; and
(e) in any other case—$50.
“(2) If in any case in which a person is liable to pay an amount to the Commissioner under sub-section (1), a prosecution for an offence against this Division is instituted in respect of the same subject matter, the amount shall not be payable unless and until the prosecution is withdrawn.
Remission of certain amounts
“221yhl. (1) Where an amount (in this section referred to as the ‘late payment penalty’) is payable by a person under paragraph 221yhh (1) (b), sub-paragraph 221yhj (1) (b) (i) or sub-sub-paragraph 221yhj (1) (b) (ii) (b), in relation to another amount that has not been paid (in this section referred to as the ‘principal amount’) and—
(a) the Commissioner is satisfied that—
(i) the circumstances that contributed to the delay in payment of the principal amount were not due to, or caused directly or indirectly by, an act or omission of the person; and
(ii) the person has taken reasonable action to mitigate, or mitigate the effects of, those circumstances;
(b) the Commissioner is satisfied that—
(i) the circumstances that contributed to the delay in payment of the principal amount were due to, or caused directly or indirectly by, an act or omission of the person;
(ii) the person has taken reasonable action to mitigate, or mitigate the effects of, those circumstances; and
(iii) having regard to the nature of those circumstances, it would be fair and reasonable to remit the late payment penalty or part of the late payment penalty; or
(c) the Commissioner is satisfied that there are special circumstances by reason of which it would be fair and reasonable to remit the late payment penalty or part of the late payment penalty,
the Commissioner may remit the late payment penalty or part of the late payment penalty.
“(2) The Commissioner may, in any case, for reasons that he thinks sufficient, remit the whole or any part of any amount payable by a person under paragraph 221yhh (1) (a), sub-sub-paragraph 221yhj (1) (b) (ii) (a) or sub-section 221yhk (1).
“(3) Where the Commissioner makes a decision to remit part only of an amount payable as mentioned in sub-section (2), or not to remit any part of such an amount, the Commissioner shall give notice in writing of his decision to the person by whom the amount is, or but for the remission would be, payable.
Persons discharged from liability in respect of deductions
“221yhm. Where a person has made a deduction from a prescribed payment and that deduction was made, or purports to have been made, for the purposes of section 221yhd, the person is, by force of this section, discharged from all liability to pay or account for the deduction to any person other than the Commissioner.
Recovery of amounts by Commissioner
“221yhn. (1) An amount payable to the Commissioner under this Division by a person other than the Commonwealth is a debt due to the Commonwealth and payable to the Commissioner and—
(a) that amount may by sued for and recovered in a court of competent jurisdiction by the Commissioner or a Deputy Commissioner suing in his official name; or
(b) a court before which proceedings are taken against that person for an offence against a provision of this Division may order that person to pay that amount to the Commissioner.
“(2) The provisions of section 243 apply in proceedings for the recovery of an amount payable to the Commissioner under this Division in like manner as those provisions apply in proceedings by the Crown for the recovery of a pecuniary penalty under this Act.
“(3) The provisions of section 249 apply to an order for the payment of a sum of money to the Commissioner made under paragraph (1) (b) of this section or sub-section 221yhd (4) in like manner as those provisions apply to an order for the payment of a sum of money to the Commissioner made under Part VII.
“(4) Where—
(a) 2 or more amounts payable to the Commissioner by a person would, but for this sub-section, be debts due to the Commonwealth under sub-section (1);
(b) an amount (in this sub-section referred to as the ‘relevant payment’) is paid to the Commissioner in respect of one or more of those amounts; and
(c) the sum of the amounts payable exceeds the relevant payment,
the Commissioner may, notwithstanding any direction to the contrary by or on behalf of the person by whom the amounts are payable or the person making the relevant payment, apply the relevant payment in partial discharge of the sum of the amounts payable and recover as a debt due to the Commonwealth the amount by which the sum of the amounts payable exceeds the relevant payment.
Payments into and out of Consolidated Revenue Fund
“221yho. (1) All moneys received by the Commissioner in pursuance of this Division shall be paid into the Consolidated Revenue Fund.
“(2) An amount that the Commissioner is liable to pay in pursuance of this Division is payable out of the Consolidated Revenue Fund, which, to the necessary extent, is appropriated accordingly.
Deduction variation certificates
“221yhp. (1) Subject to this section, on application in writing by a person, in a form approved by the Commissioner for the purposes of this section, the Commissioner may issue to the person a deduction variation certificate under this section in relation to a year of income or a part of a year of income.
“(2) The Commissioner shall not issue a deduction variation certificate to a person in relation to a year of income or a part of a year of income unless he is satisfied that, because special circumstances exist in relation to the person in relation to the year of income, or the part of the year of income, as the case may be, the amount otherwise to be deducted from prescribed payments to the person under regulations for the purposes of sub-paragraph 221yhd(5) (a) (i) should be reduced.
“(3) Subject to section 221yhs, a deduction variation certificate remains in force during the period specified in the certificate as the period during which the certificate remains in force.
Deduction exemption certificates
“221yhq. (1) Subject to this section, on application in writing by a person, in a form approved by the Commissioner for the purposes of this section, the Commissioner may issue a deduction exemption certificate under this section to the person in relation to a specified period.
“(2) Subject to sub-sections (4) and (5), the Commissioner shall not issue a deduction exemption certificate to a person (in this sub-section referred to as the ‘applicant’) unless the Commissioner is satisfied that there is no reasonable likelihood that tax will be payable by the applicant in relation to the year of income to which the certificate, if issued, will relate or the following conditions are satisfied:
(a) the Commissioner is satisfied—
(i) that the applicant has, for a period (in this paragraph referred to as the ‘relevant period’) of 3 years immediately preceding the date of the application, been regularly engaged in carrying on business in Australia;
(ii) that, during the relevant period, the applicant has, in relation to each business carried on by the applicant during the relevant period—
(a) maintained such accounting and taxation records in relation to the business as correctly record and explain the transactions and financial position of the business;
(b) conducted the business at or from established premises that were advertised to the public as being premises from which the business was carried on; and
(c) conducted all financial transactions relating to the business through a bank account or bank accounts that was or were separate from any private or domestic account maintained by the applicant;
(iii) that, during the relevant period, the applicant has satisfactorily complied with his obligations under Acts administered by the Commissioner; and
(iv) that, during the period to which the certificate, if issued, will relate—
(a) the applicant will regularly be engaged in carrying on business in Australia;
(b) the conditions specified in sub-sub-paragraphs (ii) (a) to (c) will be satisfied in relation to each business that might be carried on by the applicant during that period; and
(c) the applicant will satisfactorily comply with his obligations under Acts administered by the Commissioner;
(b) if the applicant kept taxation and accounting records in relation to the year of income in relation to which the applicant last furnished a return of income under section 161 and the records—
(i) include a balance sheet; and
(ii) have been audited by a person who, in the opinion of the Commissioner, is competent and qualified to audit the records,
the applicant has furnished to the Commissioner a declaration by a prescribed person that the prescribed person has examined the records and has satisfied himself that the return of income accurately discloses the assessable income and allowable deductions of the applicant in respect of that year of income;
(c) if the applicant is a company, partnership or trustee of a trust estate and is not required to furnish a declaration in accordance with paragraph (b) in relation to the year of income in relation to which the applicant last furnished a return of income under section 161—the applicant has furnished to the Commissioner—
(i) a statement setting out details of all property (including money) acquired or disposed of by the applicant during that year of income;
(ii) a statement reconciling the details specified in accordance with sub-paragraph (i) with the assessable income and allowable deductions specified in the return of income; and
(iii) a declaration by a prescribed person that the prescribed person has examined the statements prepared in accordance with sub-paragraphs (i) and (ii) and has satisfied himself that the return of income accurately discloses the assessable income and allowable deductions of the applicant in respect of that year of income;
(d) if the applicant is not a company, partnership or trustee of a trust estate and is not required to furnish a declaration in accordance with paragraph (b) in relation to the year of income in relation to which the applicant last furnished a return of income under section 161—the applicant has furnished to the Commissioner—
(i) a statement setting out details of all property (including money) acquired or disposed of by the applicant during that year of income (including details relating to acquisitions or disposals of a private or domestic nature);
(ii) a statement reconciling the details specified in accordance with sub-paragraph (i) with the assessable income and allowable deductions specified in the return of income; and
(iii) a declaration by a prescribed person that the prescribed person has examined the statements prepared in accordance with sub-paragraphs (i) and (ii) and has satisfied himself that the return of income accurately discloses the assessable income and allowable deductions of the applicant in respect of that year of income; and
(e) where paragraph (c) or (d) applies in relation to the applicant and the Commissioner requires any statements or declarations of the kind referred to in those paragraphs in relation to an associate of the applicant—the applicant or the associate has furnished to the Commissioner those statements or declarations.
“(3) For the purposes of sub-section (2) —
(a) a reference to the Commissioner being satisfied that there is no reasonable likelihood that tax will be payable in relation to a year of income by an applicant for a deduction exemption certificate shall, in the case of an applicant being a partnership or the trustee of a trust estate, be read as a reference to the Commissioner being satisfied that there is no reasonable likelihood that there will be any net income of the partnership or trust estate, as the case may be, in relation to the year of income;
(b) a reference to a prescribed person is a reference to—
(i) a person who is a registered tax agent within the meaning of Part VIIa; or
(ii) a person who, in the opinion of the Commissioner, is competent and qualified to furnish a declaration required by that sub-section; and
(c) a reference to an associate of a person (in this paragraph referred to as the ‘relevant person’) is a reference to—
(i) where the relevant person is a company (including a company in the capacity of trustee of a trust estate)—any person who is a director of, or shareholder in, the company;
(ii) where the relevant person is a partnership—any of the partners in the partnership; and
(iii) in any other case—any relative of the relevant person.
“(4) Where—
(a) a person meets the requirements of sub-paragraph (2) (a) (iv) but fails to meet one or more of the requirements of sub-paragraphs (2) (a) (i), (ii) and (iii); and
(b) the Commissioner, having regard to—
(i) the purposes of this Division;
(ii) the special circumstances (if any) that exist or existed in relation to the person; and
(iii) such other matters (if any) as he thinks fit,
is of the opinion that it would be unreasonable not to issue a deduction exemption certificate to the person,
the Commissioner may issue a deduction exemption certificate to the person.
“(5) The special circumstances to which the Commissioner may have regard in the application of sub-section (4) in relation to a person being a company, a partnership or the trustee of a trust estate include—
(a) in the case of a company being a private company in relation to the year of income next preceding the year of income to which, or to part
of which, the certificate, if issued, will relate—the extent to which the requirements of sub-paragraphs (2) (a) (i), (ii) and (iii) have been complied with in relation to any businesses carried on by directors of, or shareholders in, the company;
(b) in the case of a company to which paragraph (a) does not apply—the extent to which the requirements of sub-paragraphs (2) (a) (i), (ii) and (iii) have been complied with in relation to any businesses carried on by directors of the company;
(c) in the case of a partnership—the extent to which the requirements of sub-paragraphs (2) (a) (i), (ii) and (iii) have been complied with in relation to any businesses carried on by partners in the partnership; or
(d) in the case of a trustee of a trust estate—the extent to which the requirements of sub-paragraphs (2) (a) (i), (ii) and (iii) have been complied with in relation to any businesses (not including the business of the trust estate) carried on by the trustee.
“(6) For the purposes of the application of sub-section (5) in relation to an application for a deduction exemption certificate, a person shall be deemed to have fully complied with the requirements of sub-paragraphs (2) (a) (i), (ii) and (iii) in relation to all businesses carried on by the person at any time before the date of the application for the certificate if, on the date f the application, the person was the holder of a deduction exemption certificate that was in force.
“(7) In the application of sub-paragraph (2) (a) (i) in relation to a person in the capacity of trustee of a trust estate, the reference to the person having been regularly engaged in carrying on business in Australia shall be read as a reference to the person having been regularly engaged in carrying on the business of the trust estate in Australia.
“(8) Subject to section 221yhs, a deduction exemption certificate remains in force during the period specified in the certificate as the period during which the certificate remains in force.
“(9) Where a payee has properly furnished a deduction form to an eligible paying authority in relation to a prescribed payment and—
(a) if the payment is to be made to the payee in person—
(i) the payee has declared in the deduction form that a deduction exemption certificate has been issued to the payee in respect of the period specified in the declaration and has not been revoked;
(ii) the payee has produced to the eligible paying authority a deduction exemption certificate issued to the payee and applicable to the time when the payment is to be made; and
(iii) the eligible paying authority has no reasonable grounds for believing that the deduction exemption certificate has been revoked; or
(b) if the payment is not to be made to the payee in person—the payee has declared in the deduction form that a deduction exemption certificate
has been issued to the payee in respect of the period specified in the declaration and has not been revoked,
the eligible paying authority shall not make any deduction from the prescribed payment under paragraph 221yhd (1) (a).
Reporting exemption certificates
“221yhr. (1) Where—
(a) an application in writing, in a form approved by the Commissioner for the purposes of this section, is made jointly to the Commissioner by an eligible paying authority and a payee with whom the eligible paying authority has entered into a contract under which the eligible paying authority is liable to make prescribed payments to the payee;
(b) a deduction exemption certificate issued to the payee is in force; and
(c) the Commissioner is satisfied that special circumstances exist in relation to the eligible paying authority and the payee,
the Commissioner may issue to the eligible paying authority and the payee jointly a reporting exemption certificate under this section in relation to prescribed payments under the contract.
“(2) Subject to section 221yhs, the reporting exemption certificate remains in force while there is in force a deduction exemption certificate issued to the payee.
“(3) Sections 221yhc and 221yhd do not apply in relation to prescribed payments in relation to which a reporting exemption certificate is in force.
Revocation of certificates
“221yhs. (1) The Commissioner may, at any time, revoke a prescribed certificate, and where he does so, he shall, in writing, notify the person or persons to whom the certificate was issued of the revocation.
“(2) A person who is notified by the Commissioner under sub-section (1) of the revocation of a certificate shall, within 14 days after he receives the notification, return the certificate to the Commissioner.
Penalty: $500.
“(3) If—
(a) a person (in this sub-section referred to as the ‘payee’) to whom a deduction variation certificate or a deduction exemption certificate has been issued properly furnishes to an eligible paying authority in relation to a prescribed payment a deduction form in which the payee has made a declaration in relation to the certificate as mentioned in paragraph 221yhd (5) (a) or sub-section 221yhq (9);
(b) after the payee furnishes the deduction form to the eligible paying authority and before the prescribed payment is made, the payee receives notification under sub-section (1) of the revocation of the certificate; and
(c) the payee does not notify the eligible paying authority of the revocation before the prescribed payment is made,
the payee is guilty of an offence punishable, on conviction, by a fine not exceeding $2,000.
Notification and review of decisions
“221yht. (1) Where the Commissioner makes a decision on an application under section 221yhp, 221yhq or 221yhr, the Commissioner shall give notice in writing of his decision to the applicant.
“(2) Where a person who has been notified of a decision of the Commissioner made under section 221yhl (other than sub-section (1)) or section 221yhp, 221yhq, 221yhr or 221yhs is dissatisfied with the decision, the person may, within 60 days after service on the person of notice of the decision of the Commissioner, post to, or lodge with, the Commissioner an objection in writing against the decision stating fully and in detail the grounds on which the person relies.
“(3) The provisions of Division 2 of Part V (other than section 185) apply in relation to an objection made under sub-section (2) in like manner as those provisions apply in relation to an objection against an assessment.
Offences
“221yhu. A person shall not—
(a) endeavour to obtain, for his own advantage or benefit, credit with respect to, or payment of, the amount of a deduction made from a prescribed payment made to another person;
(b) present, for the purpose of obtaining credit, payment or other benefit, a deduction form, or document purporting to be a deduction form, other than a deduction form duly delivered to him;
(c) alter a prescribed certificate or produce to an eligible paying authority a deduction exemption certificate or a deduction variation certificate that has been altered without the authority of the Commissioner;
(d) without lawful excuse, have in his possession a forgery or colourable imitation of a prescribed certificate;
(e) falsely pretend to be the person named in a deduction exemption certificate or a deduction variation certificate; or
(f) by the production of a document other than a prescribed certificate issued to him that is for the time being in force, cause an eligible paying authority to refrain from making a deduction from a prescribed payment or to make a deduction from a prescribed payment of an amount less than the amount applicable under the regulations in relation to the prescribed payment.
Penalty: $5,000 or imprisonment for 12 months, or both.
Time for prosecutions
“221yhv. A prosecution for an offence against this Division may be commenced at any time.
Joinder of charges under this Division
“221yhw. (1) Charges against the same person for any number of offences against this Division may be joined in one complaint if those charges are founded on the same facts or form, or are part of, a series of offences of the same or a similar character.
“(2) Where more than one charge is included in the same complaint in pursuance of sub-section (1), particulars of each offence charged shall be set out in a separate paragraph.
“(3) All charges so joined shall be tried together unless the court considers it just that any charge should be tried separately and makes an order to that effect.
“(4) If a person is found guilty of more than one offence, the court may, if it thinks fit, impose one penalty in respect of all offences of which the person has been found guilty, but that penalty shall not exceed the sum of the maximum penalties that could be imposed if penalties were imposed for each offence separately.
Power of Commissioner to obtain information
“221yhx. Section 264 applies, for the purposes of this Division, as if the reference in paragraph (1) (b) of that section to a person’s income or assessment were a reference to a matter relevant to the administration or operation of this Division.
Declarations
“221yhy. Any form that is approved, or published in the Gazette, by the Commissioner for the purposes of this Division may be required to contain a declaration by the person using the form.
Special provisions relating to partnerships
“221yhz. (1) Subject to this section, this Division applies in relation to the making and receipt of prescribed payments by a partnership as if the partnership were a person.
“(2) Where, but for this sub-section, an obligation would be imposed on a partnership by virtue of the operation of sub-section (1), the obligation may be discharged by any of the partners.
“(3) Where, by virtue of the operation of sub-section (1), an amount is payable under this Division by a partnership, the partners are jointly and severally liable to pay that amount.
“(4) Where, by virtue of the operation of sub-section (1), an offence against this Division is deemed to have been committed by a partnership, that offence shall be deemed to have been committed by each of the partners.”.
66. After Division 5 of Part VI of the Principal Act the following Division is inserted:
“Division 6—Deductions from certain withdrawals from Australian Film Industry Trust Fund accounts
Interpretation
“221zm. Except in so far as the contrary intention appears, an expression that is used in this Division and in Division 10ba of Part III has, in this Division, the same meaning as in Division 10ba, whether or not the expression is defined in, or a particular meaning is assigned to the expression by, Division 10ba.
Deductions from certain withdrawals from film accounts
“221zn. (1) Where a person withdraws an amount of money (in this sub-section referred to as the ‘relevant amount’) from a film account and the amount is not, upon withdrawal, dealt with in the prescribed manner, the person shall—
(a) if the relevant amount is, upon withdrawal, to be paid to a person as a refund of capital moneys expended by way of contribution to the cost of producing the film—upon withdrawal deduct from the relevant amount an amount equal to—
(i) if the person to whom the refund is to be made is a company, other than a company in the capacity of trustee of a trust estate—69% of the relevant amount; and
(ii) in any other case—90% of the relevant amount;
(b) if paragraph (a) does not apply in relation to the relevant amount—upon withdrawal deduct from the relevant amount an amount equal to 90% of the relevant amount;
(c) pay the amount deducted under paragraph (a) or (b) to the Commissioner within 21 days after withdrawing the relevant amount;
(d) forward to the Commissioner, together with the payment referred to in paragraph (c), a statement in respect of the payment, in a form approved by the Commissioner and signed by the person; and
(e) if the amount deducted under paragraph (a) or (b) is not paid to the Commissioner upon being deducted—upon the deduction being made, pay the amount deducted into the film account.
“(2) Where a person (in this sub-section referred to as the ‘account operator’) makes a deduction in accordance with paragraph (1) (a) from an amount withdrawn from a film account for refund to a person (in this sub-section referred to as the ‘contributor’), the contributor may, within 7 days after the amount is withdrawn, apply in writing to the Commissioner for a certificate under sub-section (3) exempting the account operator from the requirement of sub-section (1) to pay the amount deducted to the Commissioner.
“(3) The Commissioner shall, if he is satisfied that no deduction has been allowed under section 124zafa to the contributor in respect of any part of the amount expended by the contributor that, by virtue of section 124zah, is taken to be included in the amount withdrawn from the film account, issue to the contributor a certificate under this sub-section in relation to the amount deducted.
“(4) Where the certificate is presented to the account operator—
(a) the account operator is not required to pay the amount deducted to the Commissioner; and
(b) the contributor is not entitled to a credit under section 221zs in respect of the amount deducted.
“(5) A person who fails to comply with the requirements of sub-section (1) is guilty of an offence punishable upon conviction by—
(a) in the case of a failure to comply with the requirements of paragraph (1) (c)—a fine not exceeding $1,000 or imprisonment for a period not exceeding 6 months; and
(b) in any other case—a fine not exceeding $200.
“(6) In determining for the purposes of this section whether capital moneys have been expended by a taxpayer by way of contribution to the cost of producing a film, sections 124zag, 124zal and 124zam shall be disregarded.
Liability of person who fails to make deduction
“221zo. (1) Subject to sub-section (2), where a person fails to deduct an amount required to be deducted under this Division from an amount (in this sub-section referred to as the ‘withdrawn amount’) withdrawn from a film account, the person is liable, in addition to any other penalty to which the person may be liable, to pay to the Commissioner—
(a) an amount (in this sub-section referred to as the ‘undeducted amount’) equal to the amount that the person failed to deduct; and
(b) an amount equal to 10% per annum of so much of the undeducted amount as remains unpaid, computed from the expiration of the period of 21 days after the withdrawn amount was withdrawn from the film account.
“(2) Where the Commissioner becomes aware that a person has failed to deduct an amount required to be deducted under this Division from an amount withdrawn from a film account, the Commissioner shall notify the person in writing of the amount that was required to be deducted.
“(3) An amount that a person is liable to pay under paragraph (1) (a) in relation to an amount withdrawn from a film account ceases to be payable upon the expiration of 60 days after the person receives a notice from the Commissioner under sub-section (2) in relation to the amount withdrawn.
“(4) Where a person has become entitled to a credit under section 221zs in relation to an amount paid to the Commissioner under paragraph (1) (a) by another person (in this sub-section referred to as the ‘relevant person’)—
(a) the Commissioner shall, on application by the relevant person, notify the relevant person of the identity of the person who has become entitled to the credit and of the amount of the credit; and
(b) the relevant person may recover as a debt, from the person who became entitled to the credit, an amount equal to the amount of the credit.
Liability of person who fails to remit deduction
“221zp. Where an amount payable to the Commissioner by a person under paragraph 221zn (1) (c) remains unpaid after the expiration of the period before the expiration of which it is required by that paragraph to be paid—
(a) that amount continues to be payable by that person to the Commissioner; and
(b) an additional amount is, in addition to any other penalty to which that person may be liable, payable by that person to the Commissioner at the rate of 20% per annum on the amount unpaid, computed from the expiration of that period.
Remission of certain amounts
“221zq. Where an amount (in this section referred to as the ‘late payment amount’) is payable under paragraph 221zo (1) (b) or an additional amount (in this section also referred to as the ‘late payment amount’) is payable under paragraph 221zp (b) in relation to an amount (in this section referred to as the ‘principal amount’) payable to the Commissioner and—
(a) the Commissioner is satisfied that—
(i) the circumstances that contributed to the delay in payment of the principal amount were not due to, or caused directly or indirectly by, an act or omission of the person; and
(ii) the person has taken reasonable action to mitigate, or mitigate the effects of, those circumstances;
(b) the Commissioner is satisfied that—
(i) the circumstances that contributed to the delay in payment of the principal amount were due to, or caused directly or indirectly by, an act or omission of the person;
(ii) the person has taken reasonable action to mitigate, or mitigate the effects of, those circumstances; and
(iii) having regard to the nature of those circumstances, it would be fair and reasonable to remit the late payment amount or part of the late payment amount; or
(c) the Commissioner is satisfied that there are special circumstances by reason of which it would be fair and reasonable to remit the late payment amount or part of the late payment amount,
the Commissioner may remit the late payment amount or part of the late payment amount.
Recovery of amounts by Commissioner
“221zr. (1) An amount payable to the Commissioner under this Division by a person is a debt due to the Commonwealth and payable to the Commissioner and—
(a) that amount may be sued for and recovered in a court of competent jurisdiction by the Commissioner or a Deputy Commissioner suing in his official name; or
(b) a court before which proceedings are taken against that person for an offence against a provision of this Division may order that person to pay that amount to the Commissioner.
“(2) The provisions of section 243 apply in proceedings for the recovery of an amount payable to the Commissioner under this Division in like manner as those provisions apply in proceedings by the Crown for the recovery of a pecuniary penalty under this Act.
“(3) The provisions of section 249 apply to an order for the payment of a sum of money to the Commissioner made under paragraph (1) (b) of this section in like manner as those provisions apply to an order for the payment of a sum of money to the Commissioner made under Part VII.
Entitlement to credits in respect of deductions
“221zs. (1) Where—
(a) a deduction is made under sub-section 221zn (1) from a refund made to a person; or
(b) an amount is paid to the Commissioner under paragraph 221zo (1) (a) in relation to an amount that was required to be deducted from an amount refunded to a person,
the person is entitled to a credit of an amount equal to the deduction or the amount paid to the Commissioner, as the case may be.
“(2) Where, in a case to which sub-section (1) does not apply—
(a) a deduction is made under sub-section 221zn (1) from an amount (in this sub-section referred to as the ‘withdrawn amount’) withdrawn from a film account or an amount is paid to the Commissioner under paragraph 221zo (1) (a) in relation to an amount that was required to be deducted from an amount (in this sub-section also referred to as the ‘withdrawn amount’) withdrawn from a film account; and
(b) the Commissioner has determined under section 124zah that an amount (in this sub-section referred to as the ‘contribution amount’) of moneys expended by a person is to be taken to be included in the withdrawn amount,
the person is entitled to a credit of an amount equal to so much of the deduction or of the amount paid to the Commissioner, as the case may be, as bears to the amount of the deduction or the amount paid to the Commissioner, as the case may be, the same proportion as the contribution amount bears to the withdrawn amount.
Application of credits
“221zt. (1) Subject to this section, the amount of a credit to which a person is entitled by virtue of this Division is a debt due and payable to the person by the Commissioner on behalf of the Commonwealth.
“(2) Where a person is entitled to a credit in respect of an amount withdrawn from a film account and no deduction has been allowed in any assessment of the person in respect of the amount expended by the person that,
by virtue of section 124zah, is taken to be included in the amount withdrawn, the Commissioner shall apply the credit in total or partial discharge of any liability to the Commonwealth of the person, being a liability arising under, or by virtue of, this Act or any other Act of which the Commissioner has the general administration.
“(3) Where a person is entitled to a credit in respect of an amount withdrawn from a film account and a deduction has been allowed in an assessment of the person in respect of an amount expended by the person that, by virtue of section 124zah, is taken to be included in the amount withdrawn—
(a) the Commissioner is not required to apply the credit until the assessment has been amended to disallow the deduction; and
(b) when the assessment has been amended to disallow the deduction, the Commissioner shall apply the credit successively—
(i) in payment of any tax payable under the amended assessment; and
(ii) in total or partial discharge of any other liability to the Commonwealth of the person, being a liability arising under, or by virtue of, this Act or any other Act of which the Commissioner has the general administration.
“(4) Where the amount, or the sum of the amounts, applied or paid by the Commissioner as a credit to which a person is entitled under this Division exceeds the amount of the credit to which the person is so entitled, the Commissioner may recover the amount of the excess as if it were income tax due and payable by that person.
Persons discharged from liability in respect of deductions from refunds
“221zu. (1) Subject to sub-section (2), where a person makes, or purports to make, a deduction under sub-section 221zn (1), the person is, by force of this section, discharged from all liability to pay or account for the deduction to any person other than the Commissioner.
“(2) Sub-section (1) ceases to apply in relation to a deduction that was made, or purports to have been made, under paragraph 221zn (1) (a) if, before the amount deducted is paid to the Commissioner, a certificate under sub-section 221zn (3) in relation to the amount deducted is produced to the person who made the deduction.
Payments into and out of Consolidated Revenue Fund
“221zv. (1) All moneys received by the Commissioner in pursuance of this Division shall be paid into the Consolidated Revenue Fund.
“(2) An amount that the Commissioner is liable to pay in pursuance of this Division is payable out of the Consolidated Revenue Fund, which, to the necessary extent, is appropriated accordingly.
Time for prosecutions
“221zw. A prosecution for an offence against a provision of this Division may be commenced at any time.
Joinder of charges under this Division
“221zx. (1) Charges against the same person for any number of offences against this Division may be joined in one complaint if those charges are founded on the same facts or form, or are part of, a series of offences of the same or a similar character.
“(2) Where more than one charge is included in the same complaint in pursuance of sub-section (1), particulars of each offence charged shall be set out in a separate paragraph.
“(3) All charges so joined shall be tried together unless the court considers it just that any charge should be tried separately and makes an order to that effect.
“(4) If a person is found guilty of more than one offence, the court may, if it thinks fit, impose one penalty in respect of all offences of which the person has been found guilty, but that penalty shall not exceed the sum of the maximum penalties that could be imposed if penalties were imposed for each offence separately.”.
Application of trust amendments
67. (1) Subject to this section, the amendments made by sections 17, 18 and 19 apply in relation to income of a trust estate of the year of income of the trust estate in which 18 May 1983 occurred and of all subsequent years of income.
(2) Where—
(a) but for this sub-section, a trustee of a trust estate would be assessed and liable to pay tax in pursuance of sub-section 98 (3) or (4) of the Principal Act as amended by this Act in respect of the net income or a part of the net income of the trust estate of the year of income of the trust estate in which 18 May 1983 occurred (which income is in this sub-section referred to as the “relevant trust income”); and
(b) the whole or a part of the relevant trust income was paid to, or applied for the benefit of, a beneficiary of the trust estate before that date,
the trustee shall be assessed and is liable to pay tax in pursuance of that sub-section in respect of so much only of the relevant trust income as was not paid to, or applied for the benefit of, a beneficiary of the trust estate before that date.
(3) Where—
(a) income of a trust estate of the year of income of the trust estate in which 18 May 1983 occurred was paid to, or applied for the benefit of, a beneficiary of the trust estate before that date; and
(b) but for sub-section (2), the trustee of the trust estate would have been assessed and liable to pay tax in respect of that income,
the assessable income of the beneficiary of the year of income shall include any part of the net income of the trust estate of the year of income in which that date occurred that was paid to, or applied for the benefit of, the beneficiary (whether before or after that date).
(4) Where sub-section (3) applies in relation to a beneficiary in relation to a year of income, there shall be deducted from the income tax assessed against the beneficiary the tax paid or payable by the trustee in respect of the beneficiary’s interest in the net income of the trust estate.
Amendment of assessments
68. Nothing in section 170 of the Income Tax Assessment Act 1936 prevents the amendment of an assessment made before the commencement of this section for the purpose of giving effect to any of the amendments made by this Act.
NOTE
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; and Nos. 29, 38, 39, 76, 80, 106 and 123, 1982.