Income Tax (Non-resident Dividends and Interest)
No. 87 of 1967
An Act to impose Income Tax upon certain Dividends and Interest derived by Non-residents.
[Assented to 8 November 1967]
BE it enacted by the Queen’s Most Excellent Majesty, the Senate, and the House of Representatives of the Commonwealth of Australia, as follows:—
Short title.
1. This Act may be cited as the Income Tax (Non-resident Dividends and Interest) Act 1967.
Commencement.
2. This Act shall come into operation on the first day of January, One thousand nine hundred and sixty-eight.
Repeal.
3.—(1.) The Income Tax (Non-resident Dividends) Act 1965 is repealed.
(2.) The Act repealed by the last preceding sub-section, and the Act repealed by that Act, continue in force for all purposes in connexion with income tax and social services contribution, and income tax, payable in accordance with section 128b of the Income Tax and Social Services Contribution Assessment Act 1936–1959, or of that Act as amended and in force at any time, in respect of income to which that section applied that was derived before the commencement of this Act.
Definition.
4. In this Act, “the Assessment Act” means the Income Tax Assessment Act 1936–1967.
Incorporation.
5. The Assessment Act is incorporated and shall be read as one with this Act.
Imposition of tax.
6. The tax known as income tax, to the extent that that tax is payable in accordance with section 128b of the Assessment Act, is imposed, and shall be levied and paid, upon income to which that section applies.
Rates of tax.
7. The rates of income tax imposed by this Act are—
(a) in respect of income to which sub-section (4.) of section 128b of the Assessment Act applies—thirty per centum; and
(b) in respect of income to which sub-section (5.) of that section applies—ten per centum.
Sections 104 and 221yb of Assessment Act.
8. For the purposes of sub-section (1.) of section 104, and sub-section (3.) of section 221yb, of the Assessment Act, this Act shall be deemed not to be an Act declaring rates of income tax.
Overview
The Income Tax (Non-resident Dividends and Interest) Act 1967 was enacted by the Parliament of Australia to address the gap in taxation of income derived by non-residents from dividends and interest. This Act was designed to ensure that non-residents who earn income from Australian sources are appropriately taxed. The Act repealed the previous Income Tax (Non-resident Dividends) Act 1965, incorporating its provisions to maintain continuity in the application of income tax and social services contributions for income derived prior to the commencement of this Act. The primary policy objective is to impose income tax on specified non-resident income in a manner consistent with the Income Tax Assessment Act 1936–1967.
Scope and Application
The Income Tax (Non-resident Dividends and Interest) Act 1967 applies to non-residents of Australia who derive income from dividends and interest within the nation. The act imposes income tax upon this specific income, which is levied and paid in accordance with the provisions outlined in section 128b of the Income Tax Assessment Act 1936–1967. The tax rates set by the act are 30% for income subject to sub-section (4) of section 128b, and 10% for income subject to sub-section (5) of that section. The act repeals the Income Tax (Non-resident Dividends) Act 1965 but continues to apply to certain purposes related to income tax and social services contributions payable before the commencement of the act. The Income Tax Assessment Act 1936–1967 is incorporated and read as one with this act, ensuring a cohesive legislative framework.
Key Provisions
The Income Tax (Non-resident Dividends and Interest) Act 1967 (sections 1-8) imposes income tax on non-residents earning dividends and interest within Australia. This Act came into operation on January 1, 1968, and it repealed the previous Income Tax (Non-resident Dividends) Act 1965 but continued to apply to income derived before its commencement (section 3). The Act defines key terms such as “the Assessment Act” which refers to the Income Tax Assessment Act 1936–1967, and it incorporates this Act to be read as one with the current legislation (sections 4 and 5). The Act imposes a tax on income derived by non-residents in accordance with section 128b of the Assessment Act (section 6). The specified tax rates are thirty per cent for income covered under subsection (4) of section 128b and ten per cent for income under subsection (5) of the same section (section 7).
The Act outlines obligations and requirements for non-residents earning income from dividends and interest within Australia. Non-residents must ensure compliance with the tax imposed under this Act, adhering to the specified rates and ensuring timely payment as per section 128b of the Assessment Act. Furthermore, the Act mandates that it should be deemed not to be an Act declaring rates of income tax for the purposes of subsection (1) of section 104 and subsection (3) of section 221yb of the Assessment Act (section 8). This ensures that the provisions of the Act are correctly interpreted within the broader legislative framework.
Breach of the obligations and requirements set out in this Act can lead to serious consequences. Non-compliance with the tax imposition can result in civil or criminal penalties. While the Act does not explicitly state penalties, breaches of income tax laws generally attract penalties under the Income Tax Assessment Act 1936–1967, which can include fines and, in severe cases, imprisonment. The specific penalties would depend on the nature and extent of the breach, as well as the provisions of the Assessment Act. It is important for non-residents to understand and fulfil their tax obligations to avoid these potential legal repercussions.