WAR-TIME (COMPANY) TAX ASSESSMENT.
No. 21 of 1943.
An Act to amend the War-time (Company) Tax Assessment Act 1940-1942.
[Assented to 1st April, 1943.]
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 Assessment Act 1943.
(2.) The War-time (Company) Tax Assessment Act 1940–1942, as amended by this Act, may be cited as the War-time (Company) Tax Assessment Act 1940–1943.
Commencement.
2. This Act shall come into operation on the day on which it receives the Royal Assent.
Definitions.
3. Section three of the War-time (Company) Tax Assessment Act 1940–1942 is amended—
(a) by omitting from paragraph (d) of the definition of “taxable profit” the word “and” (second occurring); and
(b) by adding at the end of that definition the following word and paragraph:—
“; and (f) so much of any interest derived from any securities to which section twenty of the Commonwealth Debt Conversion Act 1931 applies or from any loan to which sub-section (2.) of section fifty-two b of the Commonwealth Inscribed Stock Act 1911–1940 applies, as is included in that taxable income;”.
4. After section eighteen of the War-time (Company) Tax Assessment Act 1940–1942, the following section is inserted in Part III.:—
Limitation of liability in certain cases.
“18a. Notwithstanding anything contained in paragraph (f) of the definition of ‘taxable profit’ in section three of this Act, or in paragraph (v) of sub-section (1.) of section twenty-four of this Act, a company shall not be liable to pay any greater amount of war-time (company) tax than the amount which it would have been liable to pay if—
(a) the interest specified in paragraph (f) of that definition were not deducted but were treated as income other than interest as specified in that paragraph; and
(b) the capital specified in paragraph (v) of sub-section (1.) of section twenty-four were not deducted in accordance with that section.”.
Ascertainment of capital.
5. Section twenty-four of the War-time (Company) Tax Assessment Act 1940–1942 is amended—
(a) by omitting from paragraph (iii) of sub-section (1.) the word “and”; and
(b) by adding at the end of that sub-section the following word and paragraph:—
“; and (v) any capital, averaged over the accounting period, invested in any securities to which section twenty of the Commonwealth Debt Conversion Act 1931 applies, or in any loan to which sub-section (2.) of section fifty-two b of the Commonwealth Inscribed Stock Act 1911–1940 applies.”.
Application of amendments.
6. The amendments effected by this Act shall apply to all assessments for the financial year which commenced on the first day of July, One thousand nine hundred and forty-two, and all subsequent years.
Overview
The War-time (Company) Tax Assessment Act 1943 was enacted by the Commonwealth Parliament to amend the War-time (Company) Tax Assessment Act 1940–1942, addressing specific taxation issues that arose during wartime. The Act aimed to adjust the definition of taxable profit and limit the liability of companies in relation to certain interests and capital. The policy objective was to ensure that companies were not overburdened by tax liabilities during a period of national crisis.
The Act came into operation immediately upon receiving Royal Assent, ensuring swift implementation of the necessary changes to wartime tax assessment. It modified the definition of taxable profit to include specific interests derived from securities and loans, while also providing a limitation on liability for companies, ensuring they were not taxed beyond a certain amount. The amendments applied to assessments starting from the financial year commencing on 1 July 1942, and all subsequent years.
Scope and Application
The War-time (Company) Tax Assessment Act 1943 is a piece of Australian Commonwealth legislation that amends the War-time (Company) Tax Assessment Act 1940-1942. This Act applies to companies, specifically targeting their taxable income and war-time tax liabilities. The amendments introduced by this Act are effective for assessments of the financial year that began on 1 July 1942 and all subsequent years. The Act includes modifications to the definition of "taxable profit" to explicitly include interest derived from specific securities and loans, as well as adjustments to how capital is ascertained for tax purposes. This Act restricts the liability of companies by limiting the amount of war-time tax they can be required to pay, ensuring it does not exceed what they would have owed if certain interest and capital deductions were not applied. The scope of this Act is national, as it pertains to the Commonwealth of Australia and its tax regulations during wartime.
Key Provisions
The War-time (Company) Tax Assessment Act 1943 (sections 1-6) introduces amendments to the existing War-time (Company) Tax Assessment Act 1940-1942, updating it to the War-time (Company) Tax Assessment Act 1940-1943. The Act comes into operation on the day it receives Royal Assent (section 2). Key amendments include redefining "taxable profit" to include certain interests derived from securities and loans (section 3). Additionally, a new section is inserted (section 18a) to limit a company's liability to pay war-time tax, ensuring they are not liable for more than they would have been if specific interests and capital were not deducted. The ascertainment of capital is also amended to include certain investments in securities and loans (section 5). These changes apply to all assessments for the financial year commencing 1 July 1942, and all subsequent years (section 6).
The War-time (Company) Tax Assessment Act 1943 imposes several obligations on companies, primarily concerning the calculation and payment of war-time tax. Companies must now include specific interests from securities and loans in their taxable profits (section 3). The Act also mandates that companies must not be liable for more than a certain amount of war-time tax, regardless of whether these interests and capital are deducted (section 18a). Furthermore, companies must average their capital investments over the accounting period for certain securities and loans (section 5). These provisions ensure that companies comply with the updated tax assessment rules during the war-time period.
Breaches of the War-time (Company) Tax Assessment Act 1943 may lead to significant civil and criminal consequences. While the Act does not explicitly outline specific penalties or offences, non-compliance with the tax assessment provisions can result in legal action. Companies that fail to adhere to the amended tax rules may face scrutiny from tax authorities, potentially leading to audits, fines, or other enforcement actions. The Act's primary focus is on ensuring that companies accurately report their taxable income and comply with the stipulated limitations on tax liability. Failure to do so can result in financial penalties and legal ramifications, highlighting the importance of adhering to the Act's provisions.