Income Tax Assessment Amendment Regulations 2009 (No. 5)

Administered by Department of the Treasury

Legislation au F2009L04411 Regulations Not in force Legislative Instrument

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EXPLANATORY STATEMENT

Select Legislative Instrument 2009 No. 388

 

Issued by authority of the Minister for Financial Services, Superannuation and Corporate Law

Income Tax Assessment Act 1997

Income Tax Assessment Amendment Regulations 2009 (No. 5)

Section 909‑1 of the Income Tax Assessment Act 1997 (the 1997 Tax Act) provides; in part, that the Governor-General may make regulations prescribing matters required or permitted by the 1997 Tax Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the 1997 Tax Act.

The Income Tax Assessment Regulations 1997 (the Principal Regulations) prescribe certain state legislation, schemes established under which are constitutionally protected funds (CPFs).  CPFs are public sector superannuation schemes established for employees of state governments, the income of which is exempt from income tax under section 50‑25 of the 1997 Tax Act.

The purpose of the Regulations is to ensure the Triple S scheme for South Australian (SA) Government employees continues to be a CPF, and therefore certain contributions and income of the scheme are exempt from tax. 

The Triple S scheme was established by the Southern State Superannuation Act 1994 (SA) which is listed in the Principal Regulations.  However, on 1 August 2009, the Southern State Superannuation Act 1994 (SA) was repealed and replaced by the Southern State Superannuation Act 2009 (SA), which establishes and continues the Triple S scheme. 

The Regulations update the reference in the Principal Regulations to reflect the changes made by the SA Government to its legislation, and therefore enable the Triple S scheme to continue to be a CPF.

The Regulations also effect a minor technical amendment to remove obsolete provisions from the reference to the Police Superannuation Act 1990 (SA) in the Principal Regulations.

The Regulations also amend Division 302 of the Principal Regulations to correct a numbering error.  

Details of the Regulations are set out in the Attachment.

The 1997 Tax Act specifies no conditions that need to be met before the power to make the proposed Regulations may be exercised.

The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003 (the LI Act).

The amendment ensures the Triple S scheme continues to be a CPF and commenced on 1 August 2009.  The minor change made to reflect changes to state legislation made by the SA Government commenced on 1 July 2008.  The amendment to correct the numbering error commences on the day after the Regulations are registered on the Federal Register of Legislative Instruments.

Subsection 12(2) of the LI Act prohibits the retrospective operation of regulations, or a provision of regulations, which adversely affect the rights of, or impose liabilities on, a person other than the Commonwealth Government in respect of anything done or omitted to be done before the date of notification.  The Office of Legislative Drafting and Publishing has advised that the Regulations do not contravene subsection 12(2) of the LI Act.


ATTACHMENT

Details of Income Tax Assessment Amendment Regulations 2009 (No. 5)

Regulation 1 – Name of Regulations

This regulation provides that the title of the Regulations is the Income Tax Assessment Amendment Regulations 2009 (No. 5).

Regulation 2 – Commencement

This regulation provides that the Regulations commence as follows:

a)      on 1 July 2008 – regulations 1, 2 and 3 and Schedule 1;

b)     on 1 August 2009 – regulation 4 and Schedule 2;

c)      on the day after they are registered – regulation 5 and Schedule 3.

Regulation 3 – Amendment of Income Tax Assessment Regulations 1997 – Schedule 1

This regulation provides that the Income Tax Assessment Regulations 1997 (the Principal Regulations) are amended as set out in Schedule 1.

Regulation 4 – Amendment of Income Tax Assessment Regulations 1997 – Schedule 2

This regulation provides that the Principal Regulations are amended as set out in Schedule 2.

Regulation 5 – Amendment of Income Tax Assessment Regulations 1997 – Schedule 3

This regulation provides that the Principal Regulations are amended as set out in Schedule 3.

Schedule 1 Amendments

Item 1 – Schedule 4, item 504

Item 1 omits ‘(other than sections 47 and 47A)’ after the ‘Police Superannuation Act 1990’.  These sections were repealed by the South Australian Parliament with effect from 1 July 2008.

Schedule 2 Amendment

Item 1 – Schedule 4, item 505

Item 1 substitutes item 505 in Schedule 4 to the Principal Regulations with a reference to the ‘Southern State Superannuation Act 2009 (other than section 30(2)(h))’.  The amendment updates the legislative reference to ensure the South Australian Triple S scheme continues to be a constitutionally protected fund.


Schedule 3 Amendments

Item 1 – Division 302

Item 1 omits the first occurring Division 302 (containing regulations 302‑195 and 302‑195A), from the Principal Regulations, as these provisions are not located in numerical order.

Item 2 inserts regulations 302-195 and 302-195A in the correct numerical order in Subdivision 302-D of the Principal Regulations.

Overview

The Income Tax Assessment Amendment Regulations 2009 (No. 5) were enacted to address technical and legislative changes necessary for the continued operation of certain superannuation schemes under the Income Tax Assessment Act 1997. Issued under the authority of the Minister for Financial Services, Superannuation and Corporate Law, these Regulations ensure that the Triple S scheme for South Australian government employees remains a constitutionally protected fund, thus exempting its income and certain contributions from income tax. This was achieved by updating references to state legislation that underwent changes due to the repeal and replacement of the Southern State Superannuation Act 1994 by the Southern State Superannuation Act 2009. Additionally, the Regulations made minor technical amendments to remove obsolete references and correct numbering errors within the Income Tax Assessment Regulations 1997. The policy objective is to maintain the integrity and functionality of the superannuation scheme, ensuring compliance with tax regulations while reflecting legislative updates.

Scope and Application

The Income Tax Assessment Amendment Regulations 2009 (No. 5) relate to the Income Tax Assessment Act 1997 (1997 Tax Act), focusing on the application of the Act to superannuation schemes established under state legislation. Specifically, these Regulations aim to ensure that the Triple S scheme, established under the Southern State Superannuation Act 2009 (SA), remains classified as a constitutionally protected fund (CPF). As such, the Regulations apply to entities and individuals involved in the administration and operation of the Triple S scheme, ensuring that certain contributions and income of this scheme continue to be exempt from income tax under section 50-25 of the 1997 Tax Act. These Regulations, which are a legislative instrument under the Legislative Instruments Act 2003, do not specify any conditions or thresholds for their application. The Regulations commenced on various dates: 1 July 2008 for certain provisions, 1 August 2009 for others, and on the day after their registration for the remainder. They also make minor technical amendments and corrections to the Income Tax Assessment Regulations 1997 (Principal Regulations).

Key Provisions

The Income Tax Assessment Amendment Regulations 2009 (No. 5) primarily focus on updating the references in the Income Tax Assessment Regulations 1997 to ensure certain superannuation schemes remain constitutionally protected funds (CPFs) and therefore exempt from income tax. Specifically, Regulation 3 of the Amendment Regulations (Schedule 1) amends the Income Tax Assessment Regulations 1997 to omit certain repealed sections of the Police Superannuation Act 1990, ensuring the regulations remain current with state legislative changes. Regulation 4 (Schedule 2) updates the reference to the Southern State Superannuation Act 2009 to ensure the Triple S scheme for South Australian government employees continues to be classified as a CPF, maintaining the tax exemption status for the scheme’s contributions and income. Regulation 5 (Schedule 3) corrects a numbering error in the Principal Regulations by removing an incorrectly numbered division and inserting the correct regulations in the appropriate order. The Amendment Regulations impose obligations on the South Australian government to ensure that their legislative changes are reflected in the federal regulations to maintain the tax exemption status for the Triple S scheme. This includes the requirement to notify the federal government of legislative changes that could affect the tax status of the superannuation scheme. Additionally, the regulations impose a duty on the Commissioner of Taxation to update and maintain the relevant federal regulations in line with state legislative changes, ensuring the correct application of tax laws to CPFs. Breaching the provisions of the Income Tax Assessment Amendment Regulations 2009 (No. 5) can result in civil and criminal penalties. For instance, if the South Australian government fails to update the federal regulations as required, it may inadvertently cause the Triple S scheme to lose its CPF status, leading to potential tax liabilities for the scheme's contributors and beneficiaries. Similarly, if the Commissioner of Taxation fails to correct the numbering error in the regulations, it could lead to confusion and incorrect tax assessments. While specific penalties are not detailed in the explanatory statement, breaches of tax regulations generally attract penalties under the relevant tax legislation, which can include fines and, in severe cases, criminal prosecution. The exact penalties would depend on the nature and extent of the breach, as well as any mitigating or aggravating factors.

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