Income Tax (Companies and Superannuation Funds) Act 1978

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INCOME TAX (COMPANIES AND SUPERANNUATION FUNDS) ACT 1978

No. 126 of 1978

An Act to impose a tax upon incomes of companies and superannuation funds.

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

Short title

1. This Act may be cited as the Income Tax (Companies and Superannuation Funds) Act 1978.

Commencement

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

Interpretation

3. (1) In this Act, unless the contrary intention appears—

“Assessment Act” means the Income Tax Assessment Act 1936;

“friendly society dispensary” means a friendly society dispensary to which Division 9a of Part III of the Assessment Act applies;

“investment income” has the same meaning as in Division 9b of Part III of the Assessment Act;

“non-profit company” means—

(a) a company that is not carried on for the purposes of profit or gain to its individual members and is, by the terms of the company’s constituent document, prohibited from making any distribution, whether in money, property or otherwise, to its members; or

(b) a friendly society dispensary;

“superannuation fund” means a provident, benefit, superannuation or retirement fund;

“tax” means income tax referred to in sub-section 5(1).

(2) In this Act, a reference to investment income or taxable income shall be read as a reference to investment income or taxable income, as the case may be, of the year of income.

Incorporation

4. The Assessment Act is incorporated, and shall be read as one, with this Act.

Imposition of income tax

5. (1) Income tax is imposed in accordance with this Act and at the rates declared in this Act.

(2) This Act does not impose tax payable in accordance with section 128b or 136a of the Assessment Act.

(3) This Act does not impose tax payable by—

(a) a natural person (other than a person in the capacity of a trustee of a superannuation fund); or

(b) a company in the capacity of a trustee (other than a company in the capacity of a trustee of a superannuation fund).

(4) This Act does not impose tax upon the taxable income of a nonprofit company where that taxable income does not exceed $416.

Rates of tax payable by companies

6. (1) The rates of tax payable by a company, other than a company in the capacity of a trustee, are as set out in the following provisions of this section.

(2) The rate of tax in respect of the taxable income of a company not being—

(a) a private company; or

(b) a non-profit company that is a friendly society dispensary, is 46%.

(3) In the case of a company that is a private company, the rates of tax are—

(a) in respect of the taxable income—46%; and

(b) in respect of the undistributed amount in respect of which the company is liable under section 104 of the Assessment Act to pay additional tax—50%.

(4) The rate of tax in respect of the taxable income of a non-profit company that is a friendly society dispensary is 41%.

(5) Where the taxable income of a non-profit company other than a friendly society dispensary does not exceed $2,542, the amount of tax payable by the company shall not exceed 55% of the amount by which the taxable income exceeds $416 less any rebate or credit to which the company is entitled.

(6) Where the taxable income of a non-profit company that is a friendly society dispensary does not exceed $2,311, the amount of tax payable by the company shall not exceed 50% of the amount by which the taxable income exceeds $416 less any rebate or credit to which the company is entitled.

Rates of tax payable by trustees of superannuation funds

7. (1) The rate of tax payable by a trustee of a superannuation fund in respect of the taxable income of the fund in respect of which the trustee is liable, in pursuance of section 121ca or 121cb of the Assessment Act, to be assessed and to pay tax is 50%.

(2) The rate of tax payable by a trustee of a superannuation fund in respect of investment income of the fund in respect of which the trustee is liable, in pursuance of section 121d of the Assessment Act, to be assessed and to pay tax is 46%.

(3) The rate of tax payable by a trustee of a superannuation fund in respect of the taxable income of the fund in respect of which the trustee is liable, in pursuance of section 121da of the Assessment Act, to be assessed and to pay tax is 61.5%.

Adjustment where amount to be paid by, or refunded to, taxpayer would not exceed 49 cents

8. (1) This section applies for the purposes of the making of an assessment of tax under this Act in respect of the income of a taxpayer of a year of income where, upon the making of the assessment and the serving of notice of the assessment upon the taxpayer, there would, but for this section, be a net amount of not more than 49 cents payable by the Commissioner to the taxpayer, or by the taxpayer to the Commissioner, under the law relating to income tax, after taking into account all liabilities of the taxpayer, and all rebates and credits allowable to the taxpayer, under that law.

(2) Where this section applies in relation to the making of an assessment—

(a) if the amount of not more than 49 cents would be an amount payable to the taxpayer—additional tax equal to that amount is imposed by this Act in respect of the income of the taxpayer of the year of income; and

(b) if the amount of not more than 49 cents would be an amount payable to the Commissioner—the amount that, but for this section, would be the amount of income tax imposed by this Act in respect of the income of the taxpayer of the year of income, before the allowance of any rebates to which the taxpayer is entitled, is reduced by so much of that amount of not more than 49 cents as does not exceed the amount calculated by deducting the amount of any such rebates from the amount that is to be so reduced.

(3) A reference in this section to a liability of the taxpayer shall be read as including a reference to a liability in respect of income tax notified to the taxpayer by the Commissioner, notwithstanding that the amount of the liability has not become due and payable.

(4) For the purposes of any calculation under the law relating to income tax that depends upon the amount of tax paid or payable by, or assessed in respect of the income of, a taxpayer, the tax assessed and payable under an assessment in relation to which this section applies shall be deemed to be the tax that would have been so assessed and payable if this section had not applied.

Levy of tax

9. (1) The tax imposed by this Act is levied, and shall be paid, for the financial year that commenced on 1 July 1978.

(2) Until the Parliament otherwise provides, the tax imposed by this Act is also levied, and shall be paid, for the financial year commencing on 1 July 1979.

 

(3) For the purposes of its application in accordance with subsection (2), this Act has effect as if the reference in sub-section 7(3) to 61.5% were a reference to 60%.


Act to be deemed to be the Act declaring rates of income tax

10. For the purposes of sub-section 104(1) of the Assessment Act, this Act shall be deemed to be the Act declaring the rates of income tax payable for the financial year that commenced on 1 July 1978.

Instalments of tax

11. Instalments of tax are payable by a company, in accordance with the provisions of Division 1a of Part VI of the Assessment Act, in respect of the year of income that commenced on 1 July 1978.

 

Overview

The Income Tax (Companies and Superannuation Funds) Act 1978 was enacted to impose a tax on the income of companies and superannuation funds. This Act, which was passed by the Queen, and the Senate and House of Representatives of the Commonwealth of Australia, was introduced to fill a specific gap in the taxation framework by addressing the income tax liabilities of companies and superannuation funds, which were not comprehensively covered under other tax legislation. The policy objective of this Act is to ensure that the income derived by companies and superannuation funds is taxed at appropriate rates, thereby contributing to the revenue of the Commonwealth. The Act incorporates the Income Tax Assessment Act 1936, which serves as a foundational piece of tax legislation, and it delineates specific tax rates for various types of companies and superannuation funds, excluding natural persons and companies acting as trustees of superannuation funds from its purview where certain conditions apply.

Scope and Application

The Income Tax (Companies and Superannuation Funds) Act 1978 applies to the imposition of income tax on companies and superannuation funds, and excludes natural persons, except those acting as trustees of superannuation funds, and companies acting in that capacity. This Act applies to companies generally, excluding those that are non-profit entities where their taxable income does not exceed $416, and sets out specific tax rates for private companies, non-profit companies, and companies acting as trustees of superannuation funds. It incorporates the Income Tax Assessment Act 1936 and sets specific tax rates for companies and superannuation funds, varying by entity type and income level. The tax imposed by this Act is levied for the financial year commencing on 1 July 1978, with an additional levy for the financial year commencing on 1 July 1979 unless otherwise specified by Parliament. The Act also adjusts tax liabilities where the amount payable or receivable would otherwise be 49 cents or less, and mandates that the Act is deemed to be the one declaring the rates of income tax for the specified financial year.

Key Provisions

The Income Tax (Companies and Superannuation Funds) Act 1978 (C2004A01925) imposes a tax on the income of companies and superannuation funds, setting forth the rates and conditions under which this tax is levied. Key provisions include the imposition of income tax on companies at varying rates, depending on their type and taxable income (section 5), as well as specific rates for trustees of superannuation funds (section 7). Notably, the Act exempts natural persons, companies acting as trustees (except for superannuation funds), and non-profit companies with income below a specified threshold from its tax imposition (section 5(3) and (4)). Entities governed by the Act, such as companies and trustees of superannuation funds, must comply with the specified rates of tax, which vary based on the type and income of the entity (sections 6 and 7). Companies must ensure they are correctly classified and apply the appropriate tax rate to their taxable income. Trustees of superannuation funds must adhere to the tax rates set for different types of income within the funds. Additionally, the Act incorporates the Income Tax Assessment Act 1936, thereby integrating the provisions of that Act into the tax obligations of companies and superannuation funds (section 4). Failure to comply with the requirements of the Act may result in various consequences. While the Act does not explicitly detail specific offences or penalties, non-compliance with tax laws generally can lead to civil and criminal penalties under other relevant legislation, such as the Income Tax Assessment Act 1997. Potential penalties may include fines and imprisonment, depending on the severity and intent of the non-compliance. Additionally, companies and trustees may face financial penalties for underpayment or non-payment of tax, as well as interest on the unpaid tax.

Legal classification tags

Area of Law
Taxation Law
Instrument
Act
Concepts
Definitions & Interpretation
Commencement Provisions
Offence Provisions
Rates of Tax
Adjustment of Tax Amounts

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.