statutory rules 1971 No. 148(b)
Regulation 54ze of the Income Tax Regulations is repealed and the following regulation is inserted in its stead :—
Provisional tax for the year of income 1971-1972.
“ 54ze. For the purposes of sub-section (2.) of section 221yc of the Act, the extent to which, and manner in which, the provisional tax otherwise payable by a taxpayer in respect of the income of the year of income ending on the thirtieth day of June, 1972, is to be increased are as follows:—
(a) in a case where the provisional income of the taxpayer in respect of that year of income is equal to his taxable income for the year next preceding that year of income—the provisional tax otherwise payable by the taxpayer shall be increased by the amount, if any, by which the amount of income tax assessed, in accordance with the Income Tax Act 1970, in respect of the taxable income of that next preceding year is less than the amount of income tax that would have been assessed, in accordance with the Income Tax Act 1971, in respect of the taxable income of that next preceding year if the Income Tax Act 1971 had applied to the assessment of income tax in respect of the taxable income of that next preceding year; or
(b) in any other case—the provisional tax otherwise payable by the taxpayer shall be increased by the amount, if any, by which the amount of income tax that would have been assessed, in accordance with the Income Tax Act 1970, in respect of the taxable income of that next preceding year if the taxable income had been equal to the provisional income is less than the amount of income tax that would have been assessed, in accordance with the Income Tax Act 1971, in respect of the taxable income of that next preceding year—
(i) if the taxable income had been equal to the provisional income; and
(ii) if the Income Tax Act 1971 had applied to the assessment of income tax in respect of the taxable income of that next preceding year.”.
(b) Made under the Income Tax Assessment Act 1936-1971 on 18 November 1971; notified in the Commonwealth Gazette on 19 November 1971.
Overview
The statutory rules of 1971 No. 148, specifically Regulation 54ze, were enacted to address the need for adjustments in provisional tax payments for the income year ending on the thirtieth day of June 1972, in light of changes between the Income Tax Act 1970 and the Income Tax Act 1971. This regulation was made under the authority of the Income Tax Assessment Act 1936-1971 and was issued on 18 November 1971, with notification in the Commonwealth Gazette on 19 November 1971. The policy objective was to ensure that taxpayers who experienced changes in their provisional income relative to the previous year's taxable income would have their provisional tax liabilities adjusted accordingly, thereby preventing over or underpayment of tax due to legislative changes.
Scope and Application
The specified legislative instrument concerns Regulation 54ze of the Income Tax Regulations 1971, which pertains to the adjustment of provisional tax for the income year ending on 30 June 1972. This regulation applies to taxpayers who need to pay provisional tax in accordance with section 221yc of the Income Tax Assessment Act 1971. It provides a method for increasing the provisional tax payable based on the difference between the income tax assessed under the Income Tax Act 1970 and what would have been assessed under the Income Tax Act 1971. The regulation applies to both individuals and entities that are subject to the Income Tax Assessment Act 1971, and it is intended to ensure that provisional tax payments are adjusted to reflect changes in tax laws between the two years. The regulation does not explicitly state any exclusions or exemptions, but its application is contingent on the specific conditions outlined within the regulation itself. The regulation was made under the authority of the Income Tax Assessment Act 1936-1971 and was notified in the Commonwealth Gazette on 19 November 1971.
Key Provisions
The regulation outlined in statutory rules 1971 No. 148(b) involves a significant amendment to Regulation 54ze of the Income Tax Regulations, specifically concerning provisional tax for the year of income 1971-1972 (section 54ze). The regulation stipulates the method and extent of increasing provisional tax payable by taxpayers based on their provisional income and the taxable income of the preceding year. Under clause (a), if a taxpayer's provisional income for the year ending 30 June 1972 equals their taxable income for the preceding year, the provisional tax must be increased by the difference between the income tax assessed under the Income Tax Act 1970 and what it would have been if the Income Tax Act 1971 had applied. Under clause (b), in all other cases, the provisional tax is increased by the difference between the income tax that would have been assessed under the Income Tax Act 1970 if the taxable income had been equal to the provisional income and what it would have been if the Income Tax Act 1971 had applied.
This regulation imposes specific obligations on taxpayers to calculate their provisional tax by comparing their provisional income with the taxable income of the previous year and adjusting their tax liability accordingly. Taxpayers must ensure they consider the potential differences in tax assessments under the two Acts, the Income Tax Act 1970 and the Income Tax Act 1971, to accurately determine their provisional tax liability. They must also be prepared to provide detailed calculations and justifications if requested by the tax authorities to substantiate their provisional tax payments.
Failure to comply with the requirements set out in this regulation could result in financial penalties or legal consequences. The regulation does not explicitly state the penalties for non-compliance, but breaches of tax regulations typically lead to fines or additional tax liabilities. Taxpayers may also face interest charges on underpaid tax amounts. Under Australian tax law, serious or repeated non-compliance might attract more severe penalties, including criminal charges for willful or fraudulent understatement of tax liability. The maximum penalties would depend on the nature and extent of the breach, as outlined in the broader tax legislation.