WAR-TIME (COMPANY) TAX.
No. 57 of 1941.
An Act to amend the War-time (Company) Tax Act 1940.
[Assented to 3rd December, 1941.]
BE it enacted by the King’s Most Excellent Majesty, the Senate, and the House of Representatives of the Commonwealth of Australia, as follows:—
Short title and citation.
1.—(1.) This Act may be cited as the War-time (Company) Tax Act 1941.
(2.) The War-time (Company) Tax Act 1940 is in this Act referred to as the Principal Act.
(3.) The Principal Act., as amended by this Act, may be cited as the War-time (Company) Tax Act 1940–1941.
Commencement.
2. This Act shall come into operation on the day on which it receives the Royal Assent.
Rates of tax.
3. Section five of the Principal Act is amended by omitting from paragraph (a) of sub-section (1.) the word “four” and inserting in its stead the word “six”.
4. The Schedule to the Principal Act is repealed and the following Schedule inserted in its stead:—
“THE SCHEDULE.
Column 1. | Column 2. | Column 3. | Column 4. |
— | Percentage of portion of excess to capital employed. | Rate of tax on portion of excess shown in Column 2. | Rate of tax on remainder of excess. |
| per centum. | per centum. | per centum. |
Where the excess is more than one per centum of the capital employed but not more than two per centum | 1 | 6 | 12 |
Where the excess is more than two per centum of the capital employed but not more than three per centum | 2 | 9 | 18 |
Where the excess is more than three per centum of the capital employed but not more than four per centum | 3 | 12 | 24 |
Where the excess is more than four per centum of the capital employed but not more than five per centum | 4 | 15 | 30 |
Where the excess is more than five per centum of the capital employed but not more than six per centum | 5 | 18 | 36 |
Where the excess is more than six per centum of the capital employed but not more than seven per centum | 6 | 21 | 42 |
Where the excess is more than seven per centum of the capital employed but not more than eight per centum | 7 | 24 | 48 |
Where the excess is more than eight per centum of the capital employed but not more than nine per centum | 8 | 27 | 54 |
Where the excess is more than nine per centum of the capital employed but not more than ten per centum | 9 | 30 | 60 |
Where the excess is more than ten per centum of the capital employed but not more than eleven per centum | 10 | 33 | 66 |
Where the excess is more than eleven per centum of the capital employed but not more than twelve per centum | 11 | 36 | 72 |
Where the excess is more than twelve per centum of the capital employed | 12 | 39 | 78” |
Overview
The War-time (Company) Tax Act 1941 was enacted to address the need for increased revenue to support Australia's war efforts during World War II. This Act amended the War-time (Company) Tax Act 1940 to adjust the rates of tax and the structure of taxation on company profits considered excessive relative to their capital employed. The Act was passed by the Australian Parliament and received Royal Assent on 3 December 1941, reflecting the policy objective of enhancing financial resources for the nation's war activities by imposing higher taxes on companies with significant excess profits.
Scope and Application
The War-time (Company) Tax Act 1941 applies to companies incorporated and carrying on business in Australia, aiming to address the financial needs of the Commonwealth during wartime by imposing additional taxation on companies. The Act amends the War-time (Company) Tax Act 1940, which previously established the framework for taxing companies during wartime. The legislation specifically targets the taxation of companies by adjusting the rates and thresholds for the excess of profits over capital employed. It operates within the jurisdiction of the Commonwealth of Australia and comes into effect immediately upon receiving Royal Assent. The Act does not explicitly detail exclusions, exemptions, or thresholds beyond the specified tax rates for various levels of excess profits, implying that all companies falling within the defined parameters must comply with the amended tax rates. The Act allows for further specification and refinement of its provisions through subordinate instruments, though such details are not provided within the text of the Act itself.
Key Provisions
The War-time (Company) Tax Act 1941 amends the War-time (Company) Tax Act 1940, introducing new tax rates and a revised schedule for taxation on company profits. Section 3 of the Act changes the tax rate specified in section five of the Principal Act, altering the tax rate from four per cent to six per cent. The new tax rates are detailed in the Schedule, which replaces the previous one, providing a graduated tax structure based on the percentage of the portion of excess to capital employed. This structure applies to companies whose profit exceeds a certain percentage of their capital employed, with the tax rate increasing as the excess profit increases.
The Act imposes specific obligations on companies subject to its provisions. It requires companies to calculate their taxable income in accordance with the amended rates and the new schedule. Companies must also ensure that they report their profits and any applicable tax correctly and in a timely manner to the relevant authorities. The Act mandates that companies keep accurate records of their capital employed, profit margins, and any tax paid, to facilitate compliance and potential audits.
Breach of the obligations imposed by this Act can lead to civil and criminal consequences. While the Act does not specify detailed penalties, breaches of tax legislation generally can result in substantial fines and, in severe cases, criminal prosecution. The maximum penalties may vary based on the severity and intent of the breach, but they can include fines up to several thousand Australian dollars and potential imprisonment for individuals found guilty of serious tax evasion or fraud. Companies may also face additional administrative penalties and interest on unpaid taxes.