EXPLANATORY STATEMENT
STATUTORY RULES 1984 NO. 416
ISSUED BY THE AUTHORITY OF THE TREASURER
These regulations amending the Income Tax Regulations will prescribe new rules relating to the furnishing of partnership returns, replace an existing regulation that validates, and requires judicial notice to be taken of, the signature of the Commissioner, a Second Commissioner or a Deputy Commissioner of Taxation that is written, stamped or printed on a document, and provide a more appropriate scale of expenses for persons required to attend and give evidence before the Commissioner or a Board of Review.
Regulation 1 facilitates references to the Income Tax Regulations which are referred to as the “Principal Regulations”.
By regulation 2, regulation 13 of the Principal Regulations will be amended to require the partner resident in Australia who has the greater or greatest individual interest in the net income of the partnership or in the partnership loss, as the case may be, to make and furnish the partnership return of income. Where there are two or more such partners, or in cases where all partners have equal interests in the net income or partnership loss of the partnership, the return may be made and furnished by any one of those partners.
Regulation 3 will amend existing sub-regulation 39(3) which provides that the fees and travelling expenses paid to a person who is required to attend and give evidence before a Board of Review are to be calculated by reference to the Public Works Committee Regulations. The amounts payable to such persons will instead be calculated in accordance with the Seventh Schedule to the Principal Regulations which is being inserted by regulation 8.
Regulation 4 will amend existing sub-regulation 58R(4) which provides that the fees and travelling expenses paid to a person who is required to attend and give evidence before a Tax Agent’s Board are to be calculated by reference to the Public Works Committee Regulations. The amounts payable to such persons will instead be calculated in accordance with the Seventh Schedule to the Principal Regulations, which is being inserted by regulation 8.
Regulation 62 of the Principal Regulations provides that any document bearing the written, stamped or printed signature of the Commissioner, a Second Commissioner, a Deputy Commissioner or a prescribed delegate of the Commissioner is, unless the contrary is proved, deemed to have been duly signed by that person. Sub-regulation 62(2) requires judicial notice to be taken of every such signature.
Regulation 5 will repeal regulation 62 and insert a new regulation 62. New sub-regulation 62(1) will require that judicial notice be taken of the names and signatures of the Commissioner, a Second Commissioner, a Deputy Commissioner or a prescribed delegate of the Commissioner of Taxation. New sub-regulation 62(2) will provide that, in the absence of proof that it was issued without authority, any document bearing the written, printed or stamped name (including a facsimile of the signature) of the Commissioner, a Second Commissioner or a Deputy Commissioner is deemed to have been duly signed by that person.
Regulation 6 will repeal existing regulation 64 and substitute a new regulation 64 to prescribe the scale of expenses for persons required to attend and give evidence before the Commissioner under section 264 of the Income Tax Assessment Act 1936. The scale of fees will be that set out in the Seventh Schedule which is being inserted by regulation 8.
Regulation 7 makes a number of minor drafting amendments to Form 1 (Officer’s Oath of Secrecy) and Form 2 (Officer’s Declaration of Secrecy) in the First Schedule to the Principal Regulations to provide for those forms to be completed by persons other than those in the States of Australia - for example, persons in Australia’s Territories.
Regulation 8 will add a new Seventh Schedule to the Principal Regulations which will specify the Scale of Expenses for persons required to attend and give evidence before the Commissioner or a Board of Review. At present, the scale of such expenses is that prescribed in the Public Works Committee Regulations. By Items 1 and 2 of the new scale, a person attending before the Commissioner is entitled to an amount in relation to expenses which is calculated by reference to the relevant amounts specified in the High Court Rules. In addition to any amount to which the person may be entitled under Items 1 or 2, an expert witness is also entitled to a reasonable amount for qualifying to give that evidence - Item 3. Item 4 provides for the payment of reasonable amounts in respect of travelling expenses, meals and accommodation.
Overview
Statutory Rules 1984 No. 416, issued under the authority of the Treasurer, amends the Income Tax Regulations to introduce new rules for the submission of partnership returns, update the method of validating signatures on certain documents, and revise the scale of expenses for individuals required to attend and give evidence before the Commissioner or a Board of Review. This amendment is aimed at addressing specific administrative and procedural gaps within the existing tax regulation framework. The Parliament of Australia enacted these changes to improve the accuracy and efficiency of partnership tax returns, ensure the appropriate validation of official signatures, and provide a more equitable scale of expenses for those who must provide evidence in tax-related hearings. The policy objective behind these amendments is to enhance the administration of the income tax system by making it more responsive to current needs and practices.
Scope and Application
The Statutory Rules issued under the authority of the Treasurer, specifically Statutory Rules 1984 No. 416, amend the Income Tax Regulations to introduce new rules concerning the furnishing of partnership returns, modify the scale of expenses for individuals required to attend and give evidence before the Commissioner or a Board of Review, and adjust the validation and judicial notice requirements for the signatures of certain tax officials. These regulations apply to partnerships and individuals required to attend and give evidence in tax-related proceedings within Australia, including its territories. The scope of these regulations extends to all partners within a partnership who are residents of Australia, particularly those with the greatest interest in the partnership's net income or loss, as well as to any person mandated to provide evidence before the Commissioner or a Board of Review. The regulations also affect the scale of expenses payable to such individuals, shifting the basis for calculation from the Public Works Committee Regulations to the newly introduced Seventh Schedule. Furthermore, they modify the process for judicial recognition of the signatures of the Commissioner, a Second Commissioner, a Deputy Commissioner, or a prescribed delegate of the Commissioner, altering the method of signature validation and the circumstances under which a signature is deemed duly executed.
Key Provisions
The main operative sections of these regulations, as detailed in the explanatory statement, include amendments to the Income Tax Regulations (referred to as the "Principal Regulations") concerning the furnishing of partnership returns, the calculation of expenses for witnesses, and the validation of signatures of certain tax officials. Regulation 2 modifies the Principal Regulations to specify that the partner with the greatest individual interest in the partnership's net income or loss must make and furnish the partnership return of income. If there are multiple partners with equal interests or the greatest interest cannot be determined, any of those partners may submit the return. Regulation 3 and Regulation 4 shift the basis for calculating fees and travelling expenses for persons required to attend and give evidence before a Board of Review or a Tax Agent’s Board from the Public Works Committee Regulations to a new Seventh Schedule inserted by Regulation 8. Regulation 5 updates the validation of signatures of the Commissioner, a Second Commissioner, a Deputy Commissioner, or a prescribed delegate of the Commissioner, replacing the requirement that judicial notice be taken of their signatures with a provision that their names or facsimile signatures are deemed duly signed unless proven otherwise. Regulation 6 substitutes a new regulation 64 to set the scale of expenses for persons attending before the Commissioner, aligning with the new Seventh Schedule. Regulation 7 makes minor amendments to forms in the First Schedule to the Principal Regulations to include persons in Australia’s Territories. Finally, Regulation 8 introduces a new Seventh Schedule specifying the scale of expenses for witnesses, based on the High Court Rules, including allowances for expert witnesses and travelling expenses.
The obligations imposed on the parties governed by these regulations include the requirement for the partner with the greatest interest in the partnership's net income or loss to furnish the partnership return. This places a clear responsibility on identifying the correct partner to submit the return, particularly in cases with multiple partners or equal interests. For witnesses required to attend and give evidence, the regulations shift the basis of their fee and expense calculations from the Public Works Committee Regulations to the new Seventh Schedule. This change necessitates that the fees and expenses be calculated in accordance with the specified scale detailed in the Seventh Schedule. The new provisions regarding the validation of signatures of tax officials require that their names or facsimile signatures on documents are deemed valid unless proven otherwise, simplifying the process of validating such documents.
Breaches of these regulations may result in various civil and criminal consequences. While the regulations themselves do not explicitly state penalties for non-compliance, the underlying Income Tax Assessment Act 1936 and associated legislation would typically apply. For instance, failure to furnish a partnership return or providing incorrect information could result in penalties under the Income Tax Assessment Act, which may include fines and other civil penalties. Non-compliance with obligations regarding the calculation of expenses for witnesses could also lead to disputes or claims for improper reimbursement, potentially resulting in legal action. The new provisions regarding the validation of signatures are designed to streamline processes and reduce administrative burdens, but any misuse or fraudulent use of these signatures could lead to criminal charges under relevant fraud statutes, with penalties including fines and imprisonment.