Income Tax Rates Amendment Act (No. 2) 1989

Administered by Department of the Treasury

Legislation au C2004A03854 Not in force Act

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No. 106 of 1989

An Act to amend the Income Tax Rates Act 1986, and for related purposes

[Assented to 30 June 1989]

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

Short title etc.

1. (1) This Act may be cited as the Income Tax Rates Amendment Act (No. 2) 1989.

(2) In this Act, “Principal Act” means the Income Tax Rates Act 19861.

Commencement

2. (1) Subject to this section, this Act commences on the day on which it receives the Royal Assent.

(2) Sections 5, 6, 7 and 9 commence, or shall be taken to have commenced, as the case requires, immediately after the commencement of the Income Tax Rates Amendment Act 1989.

Interpretation

3. Section 3 of the Principal Act is amended by inserting in subsection (1) the following definitions:

“ ‘AD/RLA component’ has the same meaning as in Division 8 of Part III of the Assessment Act;

‘CS/RA component’:

(a) in relation to a life assurance company—has the same meaning as in Division 8 of Part III of the Assessment Act; and

(b) in relation to a registered organization—has the same meaning as in Division 8a of Part III of the Assessment Act;

‘EIB component’ has the same meaning as in Division 8a of Part III of the Assessment Act;

‘life assurance company’ has the same meaning as in Division 8 of Part III of the Assessment Act;

‘NCS component’:

(a) in relation to a life assurance company—has the same meaning as in Division 8 of Part III of the Assessment Act; and

(b) in relation to a registered organization—has the same meaning as in Division 8a of Part III of the Assessment Act;

‘non-fund component’ has the same meaning as in Division 8 of Part III of the Assessment Act;”.

Rates of tax payable by companies

4. Section 23 of the Principal Act is amended:

(a) by omitting “or” from the end of paragraph (2) (a);

(b) by adding at the end of paragraph (2) (b) “or”;

“(c) a life assurance company;”;

(d) by inserting in subsection (3) “and is not a life assurance company” after “private company”;

(e) by omitting subsection (4) and substituting the following subsections:

“(4) The rates of tax in respect of the taxable income of a company that is a registered organization are:

(a) in respect of the CS/RA component—15%;

(b) in respect of the EIB component—30%; and

“(4a) The rates of tax in respect of the taxable income of a life assurance company are:

(a) in respect of the CS/RA component—15%;

(b) in respect of the AD/RLA component—39%;

(d) in respect of the NCS component—47%.

“(4b) For a life assurance company that is a private company, the rate of tax 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 is 50%.”.

Rates of tax payable by trustees of superannuation funds

5. Section 26 of the Principal Act is amended by omitting from paragraph (1) (b) and subsection (2) “49%” and substituting “47%”.

Rates of tax payable by trustees of approved deposit funds

6. Section 27 of the Principal Act is amended by omitting from paragraph (1) (b) and subsection (2) “49%” and substituting “47%”.

Rates of tax payable by trustees of pooled superannuation trusts

7. Section 27a of the Principal Act is amended by omitting from paragraph (b) “49%” and substituting “47%”.

Application and transitional—life assurance companies and registered organizations

8. (1) In this section:

“amended Act” means the Principal Act as amended by this Act;

“1 July 1988 year” means the year of income in which 1 July 1988 occurred.

(2) The amendments made by section 4 apply for the 1 July 1988 year and for all subsequent years of income.

(3) If any part of the 1 July 1988 year of a taxpayer, being a company that is a registered organization, occurs before 1 July 1988:

(a) in a case where the 1 July 1988 year of the taxpayer is the year of income commencing on 1 July 1987—subsection 23 (4) of the amended Act applies for the 1 July 1988 year of the taxpayer as if the following paragraph were inserted before paragraph 23 (4) (a):

“(aa) in respect of the pre-1 July 1988 component—20%;”; or

(b) in a case where the 1 July 1988 year of the taxpayer is the year of income commencing on 1 July 1988—subsection 23 (4) of the amended Act applies for the 1 July 1988 year of the taxpayer as if the following paragraph were inserted before paragraph 23 (4) (a):

“(aa) in respect of the pre-1 July 1988 component—30%;”.

(4) If any part of the 1 July 1988 year of a taxpayer, being a life assurance company, occurs before 1 July 1988:

(a) in a case where the 1 July 1988 year of the taxpayer is the year of income commencing on 1 July 1987—subsection 23 (4a) of the amended Act applies for the 1 July 1988 year of the taxpayer as if the following paragraph were inserted before paragraph 23 (4a) (a):

“(aa) in respect of the pre-1 July 1988 component—49%;”; or

(b) in a case where the 1 July 1988 year of the taxpayer is the year of income commencing on 1 July 1988—subsection 23 (4a) of the amended Act applies for the 1 July 1988 year of the taxpayer as if the following paragraph were inserted before paragraph 23 (4a) (a):

“(aa) in respect of the pre-1 July 1988 component—39%;”.

(5) In the application of subsection 23 (4) or (4a) of the amended Act for the year of income commencing on 1 July 1987 or the year of income commencing on 1 July 1988, the reference in the subsection concerned to 47% shall be read as a reference to 49%.

(6) In the application of subsection 23 (4) or (4a) of the amended Act for the year of income commencing on 1 July 1989, the reference in the subsection concerned to 47% shall be read as a reference to 48%.

(7) In the application of subsection 23 (4) of the amended Act for the year of income commencing on 1 July 1987, the reference in that subsection to 30% shall be read as a reference to 20%.

(8) In the application of subsection 23 (4a) of the amended Act for the year of income commencing on 1 July 1987, each reference in that subsection to 39% shall be read as a reference to 49%.

Application and transitional—superannuation funds, approved deposit funds and pooled superannuation trusts

9. (1) In this section:

“amended Act” means the Principal Act as amended by this Act.

(2) The amendments made by sections 5, 6 and 7 apply for the year of income commencing on 1 July 1989 and for all subsequent years of income.

(3) In the application of section 26, 27 or 27a of the amended Act for the year of income commencing on 1 July 1989, each reference in the section concerned to 47% shall be read as a reference to 48%.

note

1. No. 107, 1986, as amended. For previous amendments, see Nos. 60 and 138, 1987; Nos. 11, 78 and 118, 1988; and No. 70, 1989.

[Minister’s second reading speech made in—

House of Representatives on 4 May 1989

Senate on 23 May 1989]

Overview

The Income Tax Rates Amendment Act (No. 2) 1989 was enacted by the Commonwealth Parliament to amend the Income Tax Rates Act 1986. The Act was introduced to address the need for adjustments to the rates of tax applicable to various entities, including companies, trustees of superannuation funds, and trustees of approved deposit funds and pooled superannuation trusts. The policy objective was to revise the tax rates to ensure that the taxation system was fair and efficient. The Act came into effect on the day it received Royal Assent, with specific provisions applying from the income year starting 1 July 1988 and subsequent years for companies, and from the income year starting 1 July 1989 for superannuation, approved deposit funds, and pooled superannuation trusts. This legislation amends the tax rates for different categories of entities by introducing new tax components and adjusting the applicable rates. For companies, particularly life assurance companies and registered organizations, the Act specifies new tax rates for various components of their income. Similarly, it revises the tax rates for trustees of superannuation funds, approved deposit funds, and pooled superannuation trusts, reducing the general tax rate from 49% to 47%. The transitional provisions ensure that the changes are applied appropriately across different income years, maintaining consistency and fairness in the application of the new tax rates.

Scope and Application

The Income Tax Rates Amendment Act (No. 2) 1989 applies to the entities and conduct outlined in the Income Tax Rates Act 1986, which it amends. Specifically, it alters the rates of tax payable by companies, including registered organizations, life assurance companies, and trustees of superannuation funds, approved deposit funds, and pooled superannuation trusts. The amendments apply nationally, as the Act is a Commonwealth legislation. It does not explicitly state any exclusions or exemptions but implies that the changes pertain only to the specified entities and their respective taxable incomes. The Act's application is further clarified through transitional provisions that address how the amendments apply to specific years of income, ensuring a smooth transition to the new tax rates. The Act's provisions are further extended or restricted through subordinate instruments as necessary, allowing for adjustments and clarifications in its implementation.

Key Provisions

The Income Tax Rates Amendment Act (No. 2) 1989 primarily focuses on amending the Income Tax Rates Act 1986. Section 4 of this Act introduces new tax rates for companies that are registered organizations and life assurance companies, effective from the 1 July 1988 year. Specifically, section 4 outlines the tax rates for the CS/RA component, EIB component, AD/RLA component, non-fund component, and NCS component of these companies (subsections 4, 4a, and 4b). Additionally, section 5 reduces the tax rate for trustees of superannuation funds from 49% to 47%, as do sections 6 and 7 for trustees of approved deposit funds and pooled superannuation trusts, respectively. The obligations imposed by the Act on the relevant entities include the calculation and payment of taxes according to the newly specified rates. For example, registered organizations and life assurance companies must determine their tax liabilities based on the new rates specified in section 4. Trustees of superannuation funds, approved deposit funds, and pooled superannuation trusts must also adjust their tax calculations to reflect the reduced rate of 47%, as outlined in sections 5, 6, and 7. The Act also includes transitional provisions for the application of the new tax rates. Section 8 specifies transitional rules for registered organizations and life assurance companies, ensuring that the new rates apply correctly for the 1 July 1988 year and subsequent years. This section also provides adjustments for tax rates during the transitional period, ensuring a smooth transition to the new rates. Similarly, section 9 details transitional rules for superannuation funds, approved deposit funds, and pooled superannuation trusts, applying from the year of income commencing on 1 July 1989. In terms of penalties and consequences for non-compliance, while the Act itself does not explicitly state penalties, the general provisions of the Income Tax Assessment Act 1936 and 1997 would apply. These include fines and potential criminal charges for wilful neglect or intentional disregard of tax obligations. The severity of the penalties can vary based on the nature and extent of the non-compliance, but can include significant monetary fines and imprisonment for serious offences.

Area of Law: Taxation Law
Instrument: Act
Concepts: Definitions & Interpretation; Commencement Provisions; Repeal & Amendment; Offence Provisions; Compliance Obligations

Interactions

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.

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