TAX AND SUPERANNUATION LAWS AMENDMENT (2014 MEASURES NO. 4) BILL 2014

2013-2014

The Parliament of the

Commonwealth of Australia

HOUSE OF REPRESENTATIVES

Presented and read a first time

Tax and Superannuation Laws

Amendment (2014 Measures No. 4) Bill

2014

No. , 2014

(Treasury)

A Bill for an Act to amend the law relating to

taxation, superannuation and excise, and for other

purposes

No. , 2014

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

Contents

Short title ........................................................................................... 1

Commencement ................................................................................. 1

Schedule(s) ........................................................................................ 4

Schedule 1--Thin capitalisation

Part 1--Safe harbour debt amount

Income Tax Assessment Act 1997

Part 2--Worldwide gearing debt amount for outward investing

entities (non-ADI)

Income Tax Assessment Act 1997

Part 3--Worldwide capital amount

Income Tax Assessment Act 1997

Part 4--Safe harbour capital amount

Income Tax Assessment Act 1997

Part 5--De minimis threshold

Income Tax Assessment Act 1997

Part 6--Worldwide gearing debt amount for inward investing

entities (non-ADI)

Income Tax Assessment Act 1997

Part 7--Consequential amendments

Income Tax Assessment Act 1997

Part 8--Application

Schedule 2--Foreign dividends

Part 1--Foreign equity distributions on participation interests

Income Tax Assessment Act 1936

Income Tax Assessment Act 1997

Part 2--Repeal of portfolio dividend exemption for CFCs

Income Tax Assessment Act 1936

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

No. , 2014

Part 3--Consequential amendments

Income Tax Assessment Act 1936

Income Tax Assessment Act 1997

Part 4--Application

Schedule 3--Foreign resident CGT integrity measures

Part 1--Duplicated assets of corporate groups

Income Tax Assessment Act 1997

Part 2--Assets used by permanent establishments

Income Tax Assessment Act 1997

Schedule 4--Tax receipts

Income Tax Assessment Act 1997

Taxation Administration Act 1953

Schedule 5--Miscellaneous amendments

Part 1--References to specific Ministers, Departments and

Secretaries

Division 1--Main amendments

A New Tax System (Goods and Services Tax) Act 1999

Income Tax Assessment Act 1936

Income Tax Assessment Act 1997

Taxation Administration Act 1953

Division 2--Contingent amendments

Income Tax Assessment Act 1997

Part 2--Amendments relating to excise

Aviation Fuel Revenues (Special Appropriation) Act 1988

Part 3--Amendments relating to numbering

Income Tax Assessment Act 1997

Part 4--Other amendments of principal Acts

A New Tax System (Goods and Services Tax) Act 1999

Fuel Tax Act 2006

No. , 2014

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

iii

Income Tax Assessment Act 1936

Income Tax Assessment Act 1997

Superannuation Guarantee (Administration) Act 1992

Taxation Administration Act 1953

Part 5--Other amendments of amending Acts

New Business Tax System (Consolidation, Value Shifting, Demergers

and Other Measures) Act 2002

Superannuation Legislation Amendment (Stronger Super) Act 2012

Tax Laws Amendment (2009 Budget Measures No. 2) Act 2009

Tax Laws Amendment (2011 Measures No. 9) Act 2012

Tax Laws Amendment (2012 Measures No. 3) Act 2012

Tax Laws Amendment (2012 Measures No. 6) Act 2013

Tax Laws Amendment (Research and Development) Act 2011

Tax Laws Amendment (Temporary Budget Repair Levy) Act 2014

No. , 2014

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

A Bill for an Act to amend the law relating to

taxation, superannuation and excise, and for other

purposes

The Parliament of Australia enacts:

1 Short title

This Act may be cited as the Tax and Superannuation Laws

Amendment (2014 Measures No. 4) Act 2014.

2 Commencement

(1) Each provision of this Act specified in column 1 of the table

commences, or is taken to have commenced, in accordance with

column 2 of the table. Any other statement in column 2 has effect

according to its terms.

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

No. , 2014

Commencement information

Column 1

Column 2

Column 3

Provision(s)

Commencement

Date/Details

1. Sections 1 to 3

and anything in

this Act not

elsewhere covered

by this table

The day this Act receives the Royal Assent.

2. Schedules 1

and 2

The day after this Act receives the Royal

Assent.

3. Schedules 3

and 4

The day this Act receives the Royal Assent.

4. Schedule 5,

Part 1, Division 1

The day this Act receives the Royal Assent.

5. Schedule 5,

Part 1, Division 2

The later of:

(a) the start of the day this Act receives the

Royal Assent; and

(b) immediately after the start of the day

Part 2 of Schedule 2 to the Land

Transport Infrastructure Amendment Act

2014 commences.

However, the provision(s) do not commence

at all if the event mentioned in paragraph (b)

does not occur.

6. Schedule 5,

Part 2

At the same time as Part 2 of Schedule 1 to

the Excise Tariff Amendment (Tobacco) Act

2014 commences.

1 December

2013

7. Schedule 5,

Parts 3 and 4

The day this Act receives the Royal Assent.

8. Schedule 5,

items 141 and 142

Immediately after the commencement of

item 34 of Schedule 13 to the New Business

Tax System (Consolidation, Value Shifting,

Demergers and Other Measures) Act 2002.

29 June 2002

9. Schedule 5,

item 143

Immediately after the commencement of

item 19 of Schedule 15 to the New Business

Tax System (Consolidation, Value Shifting,

Demergers and Other Measures) Act 2002.

24 October 2002

No. , 2014

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

Commencement information

Column 1

Column 2

Column 3

Provision(s)

Commencement

Date/Details

10. Schedule 5,

items 144 and 145

1 July 2014.

1 July 2014

11. Schedule 5,

item 146

Immediately after the commencement of

item 55 of Schedule 1 to the Tax Laws

Amendment (2009 Budget Measures No. 2)

Act 2009.

14 December

2009

12. Schedule 5,

item 147

Immediately after the commencement of

item 29 of Schedule 6 to the Tax Laws

Amendment (2011 Measures No. 9) Act

2012.

22 December

1999

13. Schedule 5,

item 148

Immediately after the commencement of

item 83 of Schedule 6 to the Tax Laws

Amendment (2011 Measures No. 9) Act

2012.

21 March 2012

14. Schedule 5,

item 149

Immediately after the commencement of

item 140 of Schedule 6 to the Tax Laws

Amendment (2011 Measures No. 9) Act

2012.

21 March 2012

15. Schedule 5,

item 150

Immediately after the commencement of

item 12 of Schedule 1 to the Tax Laws

Amendment (2012 Measures No. 3) Act

2012.

21 June 2012

16. Schedule 5,

items 151 and 152

Immediately after the commencement of

section 4 of the Tax Laws Amendment (2012

Measures No. 6) Act 2013.

28 June 2013

17. Schedule 5,

items 153 and 154

Immediately after the commencement of

Part 6 of Schedule 3 to the Tax Laws

Amendment (Research and Development)

Act 2011.

8 September

2011

18. Schedule 5,

items 155 and 156

Immediately after the commencement of

section 3 of the Tax Laws Amendment

(Temporary Budget Repair Levy) Act 2014.

25 June 2014

Note:

This table relates only to the provisions of this Act as originally

enacted. It will not be amended to deal with any later amendments of

this Act.

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

No. , 2014

(2) Any information in column 3 of the table is not part of this Act.

Information may be inserted in this column, or information in it

may be edited, in any published version of this Act.

3 Schedule(s)

Each Act that is specified in a Schedule to this Act is amended or

repealed as set out in the applicable items in the Schedule

concerned, and any other item in a Schedule to this Act has effect

according to its terms.

Thin capitalisation Schedule 1

Safe harbour debt amount Part 1

No. , 2014

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

Schedule 1

--Thin capitalisation

Part 1

--Safe harbour debt amount

Income Tax Assessment Act 1997

1 Section 820-95 (method statement, step 7)

Omit "

", substitute "

2 Subsection 820-100(2) (method statement, step 8)

Omit "

", substitute "

3 Section 820-195 (method statement, step 5)

Omit "

", substitute "

4 Subsection 820-200(2) (method statement, step 6)

Omit "

", substitute "

5 Section 820-205 (method statement, step 5)

Omit "

", substitute "

6 Subsection 820-210(2) (method statement, step 6)

Omit "

", substitute "

Schedule 1 Thin capitalisation

Part 2 Worldwide gearing debt amount for outward investing entities (non-ADI)

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

No. , 2014

Part 2

--Worldwide gearing debt amount for outward

investing entities (non-ADI)

Income Tax Assessment Act 1997

7 Paragraph 820-90(1)(c)

Before "a negative amount", insert "nil or".

8 Subsection 820-90(1) (note)

Repeal the note, substitute:

Note 1:

The safe harbour debt amount differs depending on whether the entity

is an outward investor (general) or an outward investor (financial), see

sections 820-95 and 820-100.

Note 2:

The worldwide gearing debt amount for an entity that is not also an

inward investment vehicle (general) or an inward investment vehicle

(financial) differs depending on whether the entity is an outward

investor (general) or an outward investor (financial), see

section 820-110.

9 Subsection 820-90(2)

Repeal the subsection, substitute:

Entity is also an inward investment vehicle (general) or inward

investment vehicle (financial)

(2) The entity's maximum allowable debt for an income year is the

greatest of the following amounts if the entity is also an

inward

investment vehicle (general) or an

inward investment vehicle

(financial) for all or any part of that year:

(a) the

safe harbour debt amount;

(b) the

arm's length debt amount;

worldwide

gearing debt amount.

Note 1:

The safe harbour debt amount differs depending on whether the entity

is an outward investor (general) or an outward investor (financial), see

sections 820-95 and 820-100.

Note 2:

The worldwide gearing debt amount for an entity that is also an

inward investment vehicle (general) or an inward investment vehicle

Thin capitalisation Schedule 1

Worldwide gearing debt amount for outward investing entities (non-ADI) Part 2

No. , 2014

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

(financial) differs depending on whether the entity is an outward

investor (general) or an outward investor (financial), see

section 820-111.

Inward investment vehicles that are not eligible for the worldwide

gearing debt amount

(3) This subsection applies to an entity, if:

(a) the entity has

statement

worldwide equity, or

statement

worldwide assets, of nil or a negative amount; or

(b)

audited consolidated financial statements for the entity for

the income year do not exist; or

0.5:

Average Australian assets of the entity

Statement worldwide assets of the entity for the income year

where:

average Australian assets of an entity is the average value, for the

statement period mentioned in subsection (4), of all the assets of

the entity, other than:

(a) any assets attributable to the entity's

overseas permanent

establishments; or

(b) any

debt interests held by the entity, to the extent to which

any value of the interests is all or a part of the

controlled

foreign entity debt of the entity; or

equity interests or debt interests held by the entity, to the

extent to which any value of the interests is all or a part of the

controlled foreign entity equity of the entity.

(4) For the purposes of the definition of average Australian assets in

subsection (3) the statement period is the period for which the

audited consolidated financial statements for the entity for the

income year have been prepared.

(5) For the purposes of the formula in paragraph (3)(c), if:

(a) an amount is included in

statement worldwide assets in

respect of an asset; and

Schedule 1 Thin capitalisation

Part 2 Worldwide gearing debt amount for outward investing entities (non-ADI)

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

No. , 2014

(b) the asset was acquired, held or otherwise dealt with by an

entity for a purpose (other than an incidental purpose) that

included ensuring that subsection (3) does not apply to an

entity; and

asset, the amount included in statement worldwide assets

exceeds the amount (including nil) that would otherwise be

so included;

apply the amount of the excess to reduce statement worldwide

assets (or statement worldwide assets as reduced by a previous

application of this subsection).

10 Section 820-110 (heading)

Repeal the heading, substitute:

820-110 Worldwide gearing debt amount--outward investor that is

not also an inward investment vehicle

11 Subsection 820-110(1) (method statement, steps 2, 3 and

Repeal the steps, substitute:

Step 3. Add 1 to the result of step 1.

Step 4. Divide the result of step 1 by the result of step 3.

12 Subsection 820-110(2) (method statement, steps 2, 3 and

Repeal the steps, substitute:

Step 3. Add 1 to the result of step 1.

Step 4. Divide the result of step 1 by the result of step 3.

13 After section 820-110

Insert:

Thin capitalisation Schedule 1

Worldwide gearing debt amount for outward investing entities (non-ADI) Part 2

No. , 2014

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

820-111 Worldwide gearing debt amount--outward investor that is

also an inward investment vehicle

Outward investor (general)

(1) If the entity is an

outward investor (general) for the income year,

and is also an

inward investment vehicle (general) for all or any

part of that year, the worldwide gearing debt amount is the result

of applying the method statement in this subsection.

Method statement

Step 1. Divide the entity's

statement worldwide debt for the

income year by the entity's

statement worldwide equity

for that year.

Step 2. Add 1 to the result of step 1.

Step 3. Divide the result of step 1 by the result of step 2.

Step 4. Multiply the result of step 3 in this method statement by

the result of step 6 in the method statement in

section 820-95.

Step 5. Add to the result of step 4 the average value, for that

year, of the entity's

associate entity excess amount. The

result of this step is the worldwide gearing debt amount.

Example: RKR Limited, a company that is an Australian entity, has a worldwide

parent entity in Canada. RKR Limited also has permanent

establishments in Singapore. RKR Limited has statement worldwide

debt of $120 million and statement worldwide equity of $40 million.

The result of applying step 1 is therefore 3. Dividing 3 by 4 (through

applying steps 2 and 3) and multiplying the result by $75 million

(which is the result of step 6 of the method statement in

section 820-95) equals $56.25 million. As the average value of the

company's associate entity excess amount is $4 million, the

worldwide gearing debt amount is therefore $60.25 million.

Outward investor (financial)

(2) If the entity is an

outward investor (financial) for the income year,

and is also an

inward investment vehicle (financial) for all or any

Schedule 1 Thin capitalisation

Part 2 Worldwide gearing debt amount for outward investing entities (non-ADI)

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

No. , 2014

part of that year, the worldwide gearing debt amount is the result

of applying the method statement in this subsection.

Method statement

Step 1. Divide the entity's

statement worldwide debt for the

income year by the entity's

statement worldwide equity

for that year.

Step 2. Add 1 to the result of step 1.

Step 3. Divide the result of step 1 by the result of step 2.

Step 4. Multiply the result of step 3 in this method statement by

the result of step 7 in the method statement in

subsection 820-100(2).

Step 5. Add to the result of step 4 the average value, for that

year, of the entity's

zero-capital amount (other than any

zero-capital amount that is attributable to the entity's

overseas permanent establishments).

Step 6. Add to the result of step 5 the average value, for that

year, of the entity's

associate entity excess amount. The

result of this step is the worldwide gearing debt amount.

Example: TRR Limited, a company that is an Australian entity, has a worldwide

parent entity in the United States of America. TRR Limited also has

permanent establishments in Malaysia. TRR Limited has statement

worldwide debt of $90 million and statement worldwide equity of $30

million. The result of applying step 1 is therefore 3. Dividing 3 by 4

(through applying steps 2 and 3) and multiplying the result by $100

million (which is the result of step 7 of the method statement in

subsection 820-100(2)) equals $75 million. The zero capital amount is

$5 million. Adding that amount to $75 million results in $80 million.

As the company does not have any associate entity excess amount, the

worldwide gearing debt amount is therefore $80 million.

Schedule 1 Thin capitalisation

Part 4 Safe harbour capital amount

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

No. , 2014

Part 4

--Safe harbour capital amount

Income Tax Assessment Act 1997

15 Subsection 820-310(1) (method statement, step 2)

Omit "4%", substitute "6%".

16 Section 820-405 (method statement, step 2)

Omit "4%", substitute "6%".

17 Subsection 820-615(3) (method statement, step 2)

Omit "4%", substitute "6%".

Thin capitalisation Schedule 1

De minimis threshold Part 5

No. , 2014

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

Part 5

--De minimis threshold

Income Tax Assessment Act 1997

18 Section 820-35

Repeal the section, substitute:

820-35 Application--$2 million threshold

Subdivision 820-B, 820-C, 820-D or 820-E does not apply to

disallow any

debt deduction of an entity for an income year if the

total debt deductions of that entity and all its

associate entities for

that year are $2 million or less.

Schedule 1 Thin capitalisation

Part 6 Worldwide gearing debt amount for inward investing entities (non-ADI)

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

No. , 2014

Part 6

--Worldwide gearing debt amount for inward

investing entities (non-ADI)

Income Tax Assessment Act 1997

19 Section 820-190

Repeal the section, substitute:

820-190 Maximum allowable debt

(1) The entity's maximum allowable debt for an income year is the

greatest of the following amounts:

(a) the

safe harbour debt amount;

(b) the

arm's length debt amount;

worldwide

gearing debt amount.

Note 1:

The safe harbour debt amount differs depending on whether the entity

is an inward investment vehicle (general), inward investment vehicle

(financial), inward investor (general) or inward investor (financial),

see sections 820-195 to 820-215.

Note 2:

The worldwide gearing debt amount differs depending on whether the

entity is an inward investment vehicle (general), inward investment

vehicle (financial), inward investor (general) or an inward investor

(financial), see sections 820-216 to 820-219.

Entities that are not eligible for the worldwide gearing debt

amount

(2) This subsection applies to an entity, if:

(a) the entity has

statement

worldwide equity, or

statement

worldwide assets, of nil or a negative amount; or

(b)

audited consolidated financial statements for the entity for

the income year do not exist; or

0.5:

Average Australian assets of the entity

Statement worldwide assets of the entity for the income year

Thin capitalisation Schedule 1

Worldwide gearing debt amount for inward investing entities (non-ADI) Part 6

No. , 2014

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

where:

average Australian assets:

(a) of an

Australian entity--is the average value, for the

statement period mentioned in subsection (3), of all the assets

of the entity, other than:

(i) any

debt interests held by the entity, to the extent to

which any value of the interests is all or a part of the

controlled foreign entity debt of the entity; or

(ii) any

equity interests or debt interests held by the entity,

to the extent to which any value of the interests is all or

a part of the

controlled foreign entity equity of the

entity; and

(b) of a

foreign entity--is the average value, for the statement

period mentioned in subsection (3), of all the assets of the

entity that are:

(i) located in Australia; or

(ii) attributable to the entity's

Australian permanent

establishments; or

(iii) debt interests held by the entity, that were

issued by an

Australian entity and are

on issue;

(iv) equity interests held by the entity in an

Australian

entity.

(3) For the purposes of the definition of average Australian assets in

subsection (2) the statement period is the period for which the

audited consolidated financial statements for the entity for the

income year have been prepared.

(4) For the purposes of the formula in paragraph (2)(c), if:

(a) an amount is included in

statement worldwide assets in

respect of an asset; and

(b) the asset was acquired, held or otherwise dealt with by an

entity for a purpose (other than an incidental purpose) that

included ensuring that subsection (2) does not apply to an

entity; and

asset, the amount included in statement worldwide assets

Schedule 1 Thin capitalisation

Part 6 Worldwide gearing debt amount for inward investing entities (non-ADI)

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

No. , 2014

exceeds the amount (including nil) that would otherwise be

so included;

apply the amount of the excess to reduce statement worldwide

assets (or statement worldwide assets as reduced by a previous

application of this subsection).

20 After section 820-215

Insert:

820-216 Worldwide gearing debt amount--inward investment

vehicle (general)

If the entity is an

inward investment vehicle (general) for the

income year, and is not also an

outward investor (general) for all

or any part of that year, the worldwide gearing debt amount is the

result of applying the method statement in this section.

Method statement

Step 1. Divide the entity's

statement worldwide debt for the

income year by the entity's

statement worldwide equity

for that year.

Step 2. Add 1 to the result of step 1.

Step 3. Divide the result of step 1 by the result of step 2.

Step 4. Multiply the result of step 3 in this method statement by

the result of step 4 in the method statement in

section 820-195.

Step 5. Add to the result of step 4 the average value, for that

year, of the entity's

associate entity excess amount. The

result of this step is the worldwide gearing debt amount.

Example: SJP Limited, a company that is an Australian entity, has a worldwide

parent entity in Japan. SJP Limited has statement worldwide debt of

$120 million and statement worldwide equity of $40 million. The

result of applying step 1 is therefore 3. Dividing 3 by 4 (through

applying steps 2 and 3) and multiplying the result by $75 million

(which is the result of step 4 of the method statement in

Thin capitalisation Schedule 1

Worldwide gearing debt amount for inward investing entities (non-ADI) Part 6

No. , 2014

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

section 820-195) equals $56.25 million. As the average value of the

company's associate entity excess amount is $4 million, the

worldwide gearing debt amount is therefore $60.25 million.

820-217 Worldwide gearing debt amount--inward investment

vehicle (financial)

If the entity is an

inward investment vehicle (financial) for the

income year, and is not also an

outward investor (financial) for all

or any part of that year, the worldwide gearing debt amount is the

result of applying the method statement in this section.

Method statement

Step 1. Divide the entity's

statement worldwide debt for the

income year by the entity's

statement worldwide equity

for that year.

Step 2. Add 1 to the result of step 1.

Step 3. Divide the result of step 1 by the result of step 2.

Step 4. Multiply the result of step 3 in this method statement by

the result of step 5 in the method statement in

subsection 820-200(2).

Step 5. Add to the result of step 4 the average value, for that

year, of the entity's

zero-capital amount.

Step 6. Add to the result of step 5 the average value, for that

year, of the entity's

associate entity excess amount. The

result of this step is the worldwide gearing debt amount.

Example: RGR Limited, a company that is an Australian entity, has a worldwide

parent entity in France. RGR Limited has statement worldwide debt of

$90 million and statement worldwide equity of $30 million. The result

of applying step 1 is therefore 3. Dividing 3 by 4 (through applying

steps 2 and 3) and multiplying the result by $100 million (which is the

result of step 5 of the method statement in subsection 820-200(2))

equals $75 million. The zero capital amount is $5 million. Adding that

amount to $75 million results in $80 million. As the company does not

have any associate entity excess amount, the worldwide gearing debt

amount is therefore $80 million.

Schedule 1 Thin capitalisation

Part 6 Worldwide gearing debt amount for inward investing entities (non-ADI)

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

No. , 2014

820-218 Worldwide gearing debt amount--inward investor

(general)

If the entity is an

inward investor (general) for the income year,

the worldwide gearing debt amount is the result of applying the

method statement in this section.

Method statement

Step 1. Divide the entity's

statement worldwide debt for the

income year by the entity's

statement worldwide equity

for that year.

Step 2. Add 1 to the result of step 1.

Step 3. Divide the result of step 1 by the result of step 2.

Step 4. Multiply the result of step 3 in this method statement by

the result of step 4 in the method statement in

section 820-205.

Step 5. Add to the result of step 4 the average value, for that

year, of the entity's

associate entity excess amount. The

result of this step is the worldwide gearing debt amount.

Example: MLO Limited, a company that is not an Australian entity, has

investments in Australia. MLO Limited has statement worldwide debt

of $120 million and statement worldwide equity of $40 million.

The result of applying step 1 is therefore 3. Dividing 3 by 4 (through

applying steps 2 and 3) and multiplying the result by $75 million

(which is the result of step 4 of the method statement in

section 820-205) equals $56.25 million. As the average value of the

company's associate entity excess amount is $4 million, the

worldwide gearing debt amount is therefore $60.25 million.

820-219 Worldwide gearing debt amount--inward investor

(financial)

If the entity is an

inward investor (financial) for the income year,

the worldwide gearing debt amount is the result of applying the

method statement in this section.

Thin capitalisation Schedule 1

Worldwide gearing debt amount for inward investing entities (non-ADI) Part 6

No. , 2014

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

Method statement

Step 1. Divide the entity's

statement worldwide debt for the

income year by the entity's

statement worldwide equity

for that year.

Step 2. Add 1 to the result of step 1.

Step 3. Divide the result of step 1 by the result of step 2.

Step 4. Multiply the result of step 3 in this method statement by

the result of step 5 in the method statement in

subsection 820-210(2).

Step 5. Add to the result of step 4 the average value, for that

year, of the entity's

zero-capital amount that has arisen

because of the Australian investments mentioned in step

1 of the method statement in subsection 820-210(2).

Step 6. Add to the result of step 5 the average value, for that

year, of the entity's

associate entity excess amount. The

result of this step is the worldwide gearing debt amount.

Example: MSR Limited, a company that is not an Australian entity, has

investments in Australia. MSR Limited has statement worldwide debt

of $90 million and statement worldwide equity of $30 million. The

result of applying step 1 is therefore 3. Dividing 3 by 4 (through

applying steps 2 and 3) and multiplying the result by $100 million

(which is the result of step 5 of the method statement in

subsection 820-210(2)) equals $75 million. The zero-capital amount is

$5 million. Adding that amount to $75 million results in $80 million.

As the company does not have any associate entity excess amount, the

worldwide gearing debt amount is therefore $80 million.

21 After Subdivision 820-J

Insert:

Schedule 1 Thin capitalisation

Part 6 Worldwide gearing debt amount for inward investing entities (non-ADI)

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

No. , 2014

Subdivision 820-JA--Worldwide debt and equity concepts

Guide to Subdivision 820-JA

820-931 What this Subdivision is about

This Subdivision provides for the meanings of worldwide debt,

worldwide equity, statement worldwide debt, statement worldwide

equity and statement worldwide assets.

Table of sections

Operative provisions

820-932 Worldwide debt and worldwide equity

820-933 Statement worldwide debt, statement worldwide equity and statement

worldwide assets

820-935 Requirements for audited consolidated financial statements

Operative provisions

820-932 Worldwide debt and worldwide equity

Worldwide debt

(1) An entity's worldwide debt at a particular time, means the total of

the following amounts:

(a) all the

debt interests issued by the entity:

(i) to entities other than any

Australian controlled foreign

entities (the controlled entities) of which the entity is an

Australian controller at that time; and

(ii) that are still

on issue at that time;

(b) all the debt interests issued by the controlled entities:

(i) to entities other than the entity or other controlled

entities; and

(ii) that are still on issue at that time.

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Worldwide equity

(2) An entity's worldwide equity at a particular time, means the total

of the following amounts:

(a) all the

equity capital of the entity as at that time, but worked

out disregarding

equity interests in the entity held at that

time by

Australian controlled foreign entities (the controlled

entities) of which the entity is an

Australian controller at

that time;

(b) all the equity capital of the controlled entities as at that time,

but worked out disregarding equity interests in the controlled

entities held at that time by:

(i) the entity; or

(ii) other controlled entities.

820-933 Statement worldwide debt, statement worldwide equity and

statement worldwide assets

Statement worldwide debt

(1) An entity's statement worldwide debt for a period is the amount

(see subsection (4)) of liabilities for the entity for the period,

reduced (but not below zero) by the sum of the following amounts

(see subsection (4)) for the entity for the period:

(a) provisions;

(b) liabilities in relation to distributions to equity participants;

(d) deferred tax liabilities;

(e) liabilities relating to employee benefits;

(f) current tax liabilities;

(g) deferred revenue;

(h) liabilities relating to insurance;

(i) any other amount specified in a legislative instrument under

subsection (5).

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Statement worldwide equity

(2) An entity's statement worldwide equity for a period means the

amount (see subsection (4)) of net assets for the entity for the

period.

Statement worldwide assets

(3) An entity's statement worldwide assets for a period means the

amount (see subsection (4)) of assets for the entity for the period.

Amounts from audited consolidated financial statements to be used

(4) For the purposes of this section:

(a) an amount for an entity for a period is taken to be that

amount as shown in the

audited consolidated financial

statements for the entity for the period; and

(b) sections 820-680, 820-682, 820-683 and 820-684 do not

apply.

Other amounts

(5) The Minister may, by legislative instrument, specify one or more

amounts for the purposes of paragraph (1)(i).

820-935 Meaning of audited consolidated financial statements

(1) Audited consolidated financial statements for an entity for a

period are:

(a) the financial statements that meet the requirements in

subsection (2) for the entity for the period; or

(b) if more than one set of financial statements meet the

requirements in subsection (2) for the entity for the period--

whichever of those sets of financial statements the entity

chooses.

(2) Financial statements meet the requirements in this subsection for

an entity for a period (the relevant period) if:

(a) the statements have been prepared on a consolidated basis in

relation to the entity and one or more other entities in

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accordance with standards covered by subsection (3) or (4)

(the recognised overseas accounting standards); and

(b) one of the entities is a worldwide parent entity mentioned in

subsection (6); and

subsections 820-933(1), (2) and (3) (however described) on

that consolidated basis and in accordance with those

standards; and

(d) the statements have been audited (and the auditor's report is

unqualified) in accordance with a requirement in the law of:

(i) a foreign jurisdiction mentioned in subsection (3) of this

section; or

(ii) another jurisdiction that has adopted the standards

mentioned in subsection (4); and

(e) the statements are for the most recent period ending:

(i) no later than the end of the relevant period; and

(ii) no earlier than 12 months before the start of the relevant

period.

Recognised overseas accounting standards

(3) This subsection covers the standards (however described) that

apply to the preparation of financial statements and are made, or

adopted, by the responsible body in any of the following (a foreign

jurisdiction):

(a) the European Union;

(b) the United States of America;

(d) Japan;

(e) New Zealand;

(f) a jurisdiction specified in an instrument under subsection (5).

(4) This subsection covers the international financial reporting

standards that are made or adopted by the International Accounting

Standards Board.

(5) The Minister may, by legislative instrument, specify one or more

jurisdictions for the purposes of paragraph (3)(f).

Schedule 1 Thin capitalisation

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Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

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No. , 2014

Worldwide parent entity

(6) For the purposes of paragraph (2)(b), an entity in relation to which

financial statements have been prepared is a worldwide parent

entity if, for the purposes of the standards in accordance with

which the statements were prepared, the entity is not controlled by

another entity.

Thin capitalisation Schedule 1

Consequential amendments Part 7

No. , 2014

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Part 7

--Consequential amendments

Income Tax Assessment Act 1997

22 Section 820-10 (after table item 7)

Insert:

Subdivision 820-JA

worldwide debt and equity concepts.

23 Subsection 820-85 (note 1)

Omit "$250,000", substitute "$2 million".

24 Section 820-95 (example)

Repeal the example, substitute:

Example: AK Pty Ltd, a company that is an Australian entity, has an average

value of assets (other than assets attributable to its overseas permanent

establishments) of $100 million.

The average values of its excluded equity interests, associate entity

debt, associate entity equity, controlled foreign entity debt, controlled

foreign entity equity and non-debt liabilities are $5 million, $10

million, $8 million, $5 million, $2 million and $5 million respectively.

Deducting these amounts from the result of step 1 (through applying

steps 1A to 6) leaves $65 million. Multiplying $65 million by

results in $39 million. As the average value of the company's

associate entity excess amount is $4.5 million, the safe harbour debt

amount is therefore $43.5 million.

25 Subsection 820-100(2) (example)

Repeal the example, substitute:

Example: GLM Limited, a company that is an Australian entity, has an average

value of assets (other than assets attributable to its overseas permanent

establishments) of $160 million.

The average values of its relevant excluded equity interests, associate

entity debt, associate entity equity, controlled foreign entity debt,

controlled foreign entity equity, non-debt liabilities and zero-capital

amount are $5 million, $5 million, $5 million, $9 million, $6 million,

$5 million and $4 million respectively. Deducting these amounts from

the result of step 1 (through applying steps 1A to 7) leaves $121

million. Multiplying $121 million by

results in $113.4375

million. Adding the average zero-capital amount of $4 million results

in $117.4375 million. As the company does not have any associate

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entity excess amount, the total debt amount is therefore $117.4375

million.

26 Subsection 820-100(3) (method statement, step 7)

Omit "

", substitute "

27 Subsection 820-100(3) (example)

Repeal the example, substitute:

Example: GLM Limited, a company that is an Australian entity, has an average

value of assets (other than assets attributable to its overseas permanent

establishments) of $160 million.

The average values of its relevant excluded equity interests, associate

entity equity, controlled foreign entity debt, controlled foreign entity

equity, non-debt liabilities and on-lent amount are $5 million, $5

million, $9 million, $6 million, $5 million and $35 million

respectively. Deducting these amounts from the result of step 1

(through applying steps 1A to 6) leaves $95 million. Multiplying $95

million by

results in $57 million. Adding the average on-lent

amount of $35 million results in $92 million. Reducing the result of

step 8 by the associate entity debt amount of $5 million equals $87

million. As the company does not have any associate entity excess

amount, the adjusted on-lent amount is therefore $87 million.

28 Subsection 820-110(1) (heading)

Repeal the heading, substitute:

Outward investor (general) that is not also an inward investment

vehicle (general)

29 Subsection 820-110(1)

After "the income year,", insert "and not also an

inward investment

vehicle (general) for all or any part of that year,".

30 Subsection 820-110(1) (example)

Repeal the example, substitute:

Example: AK Pty Ltd, a company that is an Australian entity, has an average

value of worldwide debt of $90 million and an average value of

worldwide equity of $30 million. The result of applying step 1 is

therefore 3. Dividing 3 by 4 (through applying steps 3 and 4) and

multiplying the result by $65 million (which is the result of step 6 in

the method statement in section 820-95) equals $48.75 million. As the

average value of the company's associate entity excess amount is $4.5

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million, the worldwide gearing debt amount is therefore $53.25

million.

31 Subsection 820-110(2) (heading)

Repeal the heading, substitute:

Outward investor (financial) that is not also an inward investment

vehicle (financial)

32 Subsection 820-110(2)

After "that year,", insert "and not also an

inward investment vehicle

(financial) for all or any part of that year,".

33 Subsection 820-110(2) (example)

Repeal the example, substitute:

Example: GLM Limited, a company that is an Australian entity, has an average

value of worldwide debt of $120 million and an average value of

worldwide equity of $40 million. The result of applying step 1 is

therefore 3. Dividing 3 by 4 (through applying steps 3 and 4) and

multiplying the result by $121 million (which is the result of step 7 of

the method statement in subsection 820-100(2)) equals $90.75 million.

The average value of zero-capital amount (see step 7 of the method

statement in subsection 820-100(2)) is $4 million. Adding that amount

to $90.75 million results in $94.75 million. As the company does not

have any associate entity excess amount, the worldwide gearing debt

amount is therefore $94.75 million.

34 Subsection 820-185 (note 1)

Omit "$250,000", substitute "$2 million".

35 Section 820-195 (example)

Repeal the example, substitute:

Example: ALWZ Ltd, a company that is an Australian entity, has an average

value of assets of $100 million.

The average values of its excluded equity interests, associate entity

debt, associate entity equity and non-debt liabilities are $5 million,

$10 million, $5 million and $5 million respectively. Deducting these

amounts from the result of step 1 (through applying steps 1A to 4)

leaves $75 million. Multiplying $75 million by

results in $45

million. As the average value of the company's associate entity excess

amount is $2 million, the safe harbour debt amount is therefore $47

million.

Schedule 1 Thin capitalisation

Part 7 Consequential amendments

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36 Subsection 820-200(2) (example)

Repeal the example, substitute:

Example: KJW Finance Pty Ltd, a company that is an Australian entity, has an

average value of assets of $120 million.

The average values of its excluded equity interests, associate entity

debt, associate entity equity, its non-debt liabilities and its zero-capital

amount are $5 million, $5 million, $3 million, $2 million and $5

million respectively. Deducting these amounts from the result of step

1 (through applying steps 1A to 5) leaves $100 million. Multiplying

$100 million by

results in $93.75 million. Adding the

zero-capital amount of $5 million to $93.75 million results in $98.75

million. As the company does not have any associate entity excess

amount, the total debt amount is therefore $98.75 million.

37 Subsection 820-200(3) (method statement, step 5)

Omit "

", substitute "

38 Subsection 820-200(3) (example)

Repeal the example, substitute:

Example: KJW Finance Pty Ltd, a company that is an Australian entity, has an

average value of assets of $120 million.

The average values of its excluded equity interests, associate entity

equity, non-debt liabilities and on-lent amount are $5 million, $3

million, $2 million and $35 million respectively. Deducting these

amounts from the result of step 1 (through applying steps 1A to 4)

leaves $75 million. Multiplying $75 million by

results in $45

million. Adding the average on-lent amount of $35 million results in

$80 million. Reducing $80 million by the associate entity debt amount

of $5 million results in $75 million. As the company does not have

any associate entity excess amount, the adjusted on-lent amount is

therefore $75 million.

39 Section 820-205 (example)

Repeal the example, substitute:

Example: RJ Corporation is a company that is not an Australian entity. The

average value of its Australian investments is $100 million.

The average value of its relevant excluded equity interests, associate

entity debt, associate entity equity and non-debt liabilities is $5

million, $10 million, $5 million and $5 million respectively.

Deducting those amounts from the result of step 1 leaves $75 million.

Multiplying $75 million by

results in $45 million. As the company

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does not have any associate entity excess amount, the safe harbour

debt amount is therefore $45 million.

40 Subsection 820-210(2) (example)

Repeal the example, substitute:

Example: FXS Financial SA is a company that is not an Australian entity. The

average value of its Australian investments is $120 million.

The average value of its relevant excluded equity interests, associate

entity debt, associate entity equity, non-debt liabilities and zero-capital

amount are $5 million, $5 million, $2 million, $3 million and $5

million respectively. Deducting those amounts from the result of step

1 (through applying steps 1A to 5) leaves $100 million. Multiplying

$100 million by

results in $93.75 million. Adding the average

zero-capital amount of $5 million results in $98.75 million. As the

company does not have any associate entity excess amount, the total

debt amount is therefore $98.75 million.

41 Subsection 820-210(3) (method statement, step 5)

Omit "

", substitute "

42 Subsection 820-210(3) (example)

Repeal the example, substitute:

Example: FXS Financial SA is a company that is not an Australian entity. The

average value of its Australian investments is $120 million.

The average value of its relevant excluded equity interests, associate

entity equity, non-debt liabilities and on-lent amount are $5 million,

$2 million, $3 million and $35 million respectively. Deducting those

amounts from the result of step 1 (through applying steps 1A to 4)

leaves $75 million. Multiplying $75 million by

results in $45

million. Adding the average on-lent amount of $35 million results in

$80 million. Reducing the result of step 6 by the associate entity debt

amount of $5 million results in $75 million. As the company does not

have any associate entity excess amount, the adjusted on-lent amount

is therefore $75 million.

43 Subsection 820-300(1) (note 1)

Omit "$250,000", substitute "$2 million".

44 Subsection 820-310(1) (example)

Repeal the example, substitute:

Schedule 1 Thin capitalisation

Part 7 Consequential amendments

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No. , 2014

Example: The Southern Cross Bank is an Australian bank that carries on its

banking business through its overseas permanent establishments and

through foreign entities that it controls. For the income year, its

average value of risk-weighted assets and intangible assets comprising

capitalised software expenses is $150 million (having discounted

those assets that are excluded by step 1) and the average value of its

relevant tier 1 prudential capital deductions is $2 million. Multiplying

$150 million by 6% equals $9 million, which is the result of step 2.

Adding $2 million to $9 million equals $11 million, which is the safe

harbour capital amount.

45 Subsection 820-320(2) (example)

Repeal the example, substitute:

Example: Southern Cross Bank has an average value of risk-weighted assets of

$150 million (having discounted those risk-weighted assets that are

excluded by step 1) and the average value of its relevant tier 1

prudential capital deductions is $2 million. The entity's worldwide

group capital ratio is 0.0875. Multiplying $150 million by 0.0875

equals $13.125 million, which is the result of step 3. Adding that

amount to the average value of the relevant tier 1 prudential capital

deductions equals $15.125 million, which is the worldwide capital

amount.

46 Subsection 820-395(1) (note 1)

Omit "$250,000", substitute "$2 million".

47 Section 820-405 (example)

Repeal the example, substitute:

Example: The Global Bank is a foreign bank that carries on its banking business

in Australia through a permanent establishment. The average value of

its relevant risk-weighted assets is $140 million. Multiplying that

amount by 6% results in $8.4 million, which is the safe harbour capital

amount.

48 Paragraph 820-910(2)(b)

Omit "$250,000", substitute "$2 million".

49 Subsection 820-920(3) (method statement, step 4,

paragraph (a))

Omit "

", substitute "

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50 Subsection 820-920(3) (method statement, step 4,

paragraphs (b) and (c))

Omit "

", substitute "

51 Paragraph 820-946(1)(c)

Omit "$250,000", substitute "$2 million".

52 Subsection 995-1(1)

Insert:

audited consolidated financial statements for an entity for a

period has the meaning given by section 820-935.

statement worldwide assets of an entity for a period has the

meaning given by subsection 820-933(3).

statement worldwide debt of an entity for a period has the meaning

given by subsection 820-933(1).

statement worldwide equity of an entity for a period has the

meaning given by subsection 820-933(2).

53 Subsection 995-1(1) (definition of worldwide debt)

Repeal the definition, substitute:

worldwide debt of an entity and at a particular time has the

meaning given by subsection 820-932(1).

54 Subsection 995-1(1) (definition of worldwide equity)

Repeal the definition, substitute:

worldwide equity of an entity and at a particular time has the

meaning given by subsection 820-932(2).

55 Subsection 995-1(1) (definition of worldwide gearing debt

amount)

Repeal the definition, substitute:

worldwide gearing debt amount:

Schedule 1 Thin capitalisation

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Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

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(a) for an

outward investing entity (non-ADI)--has the meaning

given by sections 820-110 and 820-111; and

(b) for an inward investment vehicle (general)--has the meaning

given by section 820-216; and

meaning given by section 820-217; and

(d) for an

inward investor (general)--has the meaning given by

section 820-218; and

(e) for an

inward investor (financial)--has the meaning given

by section 820-219.

Schedule 2 Foreign dividends

Part 1 Foreign equity distributions on participation interests

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

No. , 2014

Schedule 2

--Foreign dividends

Part 1

--Foreign equity distributions on participation

interests

Income Tax Assessment Act 1936

1 Section 23AJ

Repeal the section.

Income Tax Assessment Act 1997

2 Paragraph 25-90(b)

Repeal the paragraph, substitute:

(b) the income is

non-assessable non-exempt income under

section 768-5, or section 23AI or 23AK of the Income Tax

Assessment Act 1936; and

3 Division 768 (heading)

Repeal the heading, substitute:

Division 768--Foreign non-assessable income and gains

4 Before Subdivision 768-B

Insert:

Subdivision 768-A--Returns on foreign investment

Guide to Subdivision 768-A

768-1 What this Subdivision is about

If:

(a)

an Australian corporate tax entity receives a foreign

equity distribution from a foreign company, either

Foreign dividends Schedule 2

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2014

directly or indirectly through one or more interposed

b14cjtrusts or partnerships; and

(b)

the Australian corporate tax entity holds a participation

interest of at least 10% in the foreign company;

the distribution is non-assessable non-exempt income for the

Australian corporate tax entity.

Table of sections

Foreign equity distributions on participation interests

768-5

Foreign equity distributions on participation interests

768-10

Meaning of foreign equity distribution

768-15

Participation test--minimum 10% participation

Foreign equity distributions on participation interests

768-5 Foreign equity distributions on participation interests

Foreign equity distributions received directly

(1) A

foreign equity distribution is not assessable income, and is not

exempt income, of the entity to which it is made if:

(a) the entity is an Australian resident and a

corporate tax entity;

and

(b) at the time the distribution is made, the entity satisfies the

participation test in section 768-15 in relation to the company

that made the distribution; and

(i) does not receive the distribution in the capacity of a

trustee; or

(ii) receives the distribution in the capacity of a trustee of a

corporate unit trust or

public trading trust.

Foreign equity distributions received through interposed trusts and

partnerships

(2) An amount is not assessable income, and is not

exempt income, of

an entity if:

Schedule 2 Foreign dividends

Part 1 Foreign equity distributions on participation interests

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

No. , 2014

(a) the entity is a beneficiary of a trust or a partner in a

partnership, an Australian resident and a

corporate tax

entity; and

(b) the amount is all or part of the net income of the trust or

partnership that would, apart from this subsection, be

included in the entity's assessable income because of

Division 5 or 6 of Part III of the Income Tax Assessment Act

1936; and

through one or more interposed trusts or partnerships that are

not

corporate tax entities) to a

foreign equity distribution;

and

(d) at the time the distribution is made, the entity satisfies the

participation test in section 768-15 in relation to the company

that made the distribution; and

(e) the entity:

(i) does not receive the distribution in the capacity of a

trustee; or

(ii) receives the distribution in the capacity of a trustee of a

corporate unit trust or

public trading trust.

(3) An amount that is

non-assessable non-exempt income under

subsection (2) is taken, for the purpose of section 25-90 (about

deductions relating to foreign non-assessable non-exempt income)

to be derived from the same source as the

foreign equity

distribution.

768-10 Meaning of foreign equity distribution

A foreign equity distribution is a

distribution or

non-share

dividend made by a company that is a foreign resident in respect of

equity interest in the company.

768-15 Participation test--minimum 10% participation

An entity satisfies the participation test in this section in relation to

another entity at a time if, at that time, the sum of the following is

at least 10%:

(a) the

direct participation interest the entity would have in the

other entity if rights on winding-up were disregarded;

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(b) the

indirect participation interest the entity would have in

the other entity if:

(i) rights on winding-up were disregarded; and

(ii) section 960-185 only applied to intermediate entities

that are not

corporate tax entities.

5 Subsection 995-1(1)

Insert:

foreign equity distribution has the meaning given by

section 768-10.

Schedule 2 Foreign dividends

Part 2 Repeal of portfolio dividend exemption for CFCs

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

No. , 2014

Part 2

--Repeal of portfolio dividend exemption for

CFCs

Income Tax Assessment Act 1936

6 Section 404

Repeal the section, substitute:

404 Application of Subdivision 768-A of the Income Tax Assessment

Act 1997

For the purpose of applying Subdivision 768-A of the Income Tax

Assessment Act 1997 (about returns on foreign investment) in

calculating the attributable income of the eligible CFC, disregard

section 389A of this Act (which is about disregarding Division 974

of the Income Tax Assessment Act 1997 and certain other

provisions).

Foreign dividends Schedule 2

Consequential amendments Part 3

No. , 2014

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Part 3

--Consequential amendments

Income Tax Assessment Act 1936

7 Subsection 44(1) (note 1)

Repeal the note, substitute:

Note 1:

Some other provisions that expressly deal with dividends are

sections 23AI, 23AK and 128D of this Act and section 768-5 of the

Income Tax Assessment Act 1997.

8 Subparagraph 47A(2)(a)(ii)

Omit "section 23AI or 23AJ", substitute "section 23AI or section 768-5

of the Income Tax Assessment Act 1997".

9 Paragraph 47A(7)(b)

Omit "section 23AJ", substitute "section 768-5 of the Income Tax

Assessment Act 1997".

10 Subsection 320(1) (definition of section 404 country)

Repeal the definition.

11 Section 332A

Repeal the section.

12 Subsection 399(2) (definition of excluded modifications)

Omit "404 and".

Income Tax Assessment Act 1997

13 Section 11-15 (note)

Omit "sections 403 and 404", substitute "section 403".

14 Section 11-55 (table

item headed "foreign aspects of

income taxation")

Omit:

dividend from a foreign country, non-portfolio .................. 23AJ

Schedule 2 Foreign dividends

Part 3 Consequential amendments

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

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No. , 2014

15 Section 11-

55 (table item headed "foreign aspects of

income taxation")

After:

distributions of conduit foreign income .............................. 802-20

insert:

foreign equity distributions on participation interests ........ 768-5

16 After subparagraph 118-12(2)(a)(via)

Insert:

(vib) section 768-5 (foreign equity distributions on

participation interests);

17 Subparagraph 118-12(2)(b)(iii)

Repeal the subparagraph.

18 Subsection 118-20(6)

Omit "section 23AJ (about exempting certain non-portfolio dividends

paid by non-resident companies) of the Income Tax Assessment Act

1936 because a company pays a

dividend to you", substitute

"section 768-5 (about foreign equity distributions on participation

interests) because a company makes a

foreign equity distribution".

19 Paragraph 220-350(1)(c)

Omit "section 23AI, 23AJ or 23AK of the Income Tax Assessment Act

1936", substitute "section 768-5, or section 23AI or 23AK of the

Income Tax Assessment Act 1936".

20 Paragraph 230-15(3)(c)

Repeal the paragraph, substitute:

non-assessable non-exempt income under

section 768-5, or section 23AI or 23AK of the Income Tax

Assessment Act 1936; and

21 Paragraphs 230-335(4)(a) and (b)

Repeal the paragraphs, substitute:

Foreign dividends Schedule 2

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(a) the

financial arrangement hedges a foreign currency risk in

relation to an anticipated

foreign equity distribution from a

connected entity; and

(b) the distribution is

non-assessable non-exempt income under

section 768-5.

22 Paragraph 802-30(3)(c)

Omit "section 23AJ of the Income Tax Assessment Act 1936", substitute

"section 768-5".

Foreign resident CGT integrity measures Schedule 3

Duplicated assets of corporate groups Part 1

No. , 2014

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

Schedule 3

--Foreign resident CGT integrity

measures

Part 1

--Duplicated assets of corporate groups

Income Tax Assessment Act 1997

1 After subsection 855-30(2)

Insert:

Note:

The market value of any of the latter kind of assets that are duplicated

within the test entity's corporate group could be disregarded (see

section 855-32).

2 Subsection 855-30(4) (note)

Omit "Note", substitute "Note 1".

3 At the end of subsection 855-30(4)

Add:

Note 2:

The market value of an asset of the other entity that is not taxable

Australian real property, and is duplicated within the other entity's

corporate group, could be disregarded (see section 855-32).

4 After section 855-30

Insert:

855-32 Disregard market value of duplicated non-TARP assets

(1) The purpose of this section is to prevent double counting of the

market value of the assets of a corporate group that:

(a) are not

taxable Australian real property; and

(b) are created under

arrangements under which corresponding

liabilities are created in other members of the group.

(2) For the purposes of subsections 855-30(2) and (4), subsection (4)

of this section applies to an asset that is not

taxable Australian real

property if:

(a) the parties to an

arrangement included the 2 entities referred

to in subsection (3); and

Schedule 3 Foreign resident CGT integrity measures

Part 1 Duplicated assets of corporate groups

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

No. , 2014

(b) an effect of the arrangement was to create, before the

CGT

event happened:

(i) the asset as an asset of one of those 2 parties; and

(ii) a corresponding liability of the other (the other party).

(3) The 2 entities are either:

(a) the first entity and the other entity (see

subsection 855-30(3)), if table item 2 in subsection 855-30(4)

applies to those entities; or

(b) both:

(i) that first entity or that other entity; and

(ii) an entity that is a first entity or other entity for the

purposes of a related application of

subsection 855-30(3) and table item 2 in

subsection 855-30(4).

(4) Disregard:

(a) if the other party is the test entity (see

subsection 855-30(2))--the asset's

market value; or

(b) otherwise--the percentage of the asset's market value equal

to the percentage that is the test entity's

total participation

interest in the other party.

Example: The test entity loans money to its wholly-owned subsidiary. The

market value of the loan asset created as an asset of the test entity is

disregarded for the purposes of subsection 855-30(2).

5 Application of amendment

Section 855-32 of the Income Tax Assessment Act 1997 (as inserted by

this Part) applies in relation to a CGT event if:

(a) in a case where the 2 entities that are parties to the

arrangement were members of the same consolidated group

or MEC group at the time the asset was created--the CGT

event happens after 7.30 pm, by legal time in the Australian

Capital Territory, on 14 May 2013; and

(b) otherwise--the CGT event happens on or after 13 May 2014.

Foreign resident CGT integrity measures Schedule 3

Assets used by permanent establishments Part 2

No. , 2014

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

Part 2

--Assets used by permanent establishments

Income Tax Assessment Act 1997

6 Section 855-15 (cell at table item 3, column headed

"Description")

Repeal the cell, substitute:

CGT asset that:

(a) you have used at any time in carrying on a

business through:

(i) if you are a resident in a country that has entered into an

international tax agreement with Australia containing

permanent establishment article--a permanent

establishment (within the meaning of the relevant

international tax agreement) in Australia; or

(ii) otherwise--a

permanent establishment in Australia;

and

(b) is not covered by item 1, 2 or 5 of this table

7 After section 855-15

Insert:

855-16 Meaning of permanent establishment article

A permanent establishment article is:

(a) Article 5 of the United Kingdom convention (within the

meaning of the International Tax Agreements Act 1953); or

(b) a corresponding provision of another

international tax

agreement.

8 Subsection 855-35(1)

Omit "(within the meaning of section 23AH of the Income Tax

Assessment Act 1936)", substitute "(as mentioned in that item)".

9 Subsection 995-1(1)

Insert:

Tax receipts Schedule 4

No. , 2014

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

Schedule 4

--Tax receipts

Income Tax Assessment Act 1997

1 Subsection 995-1(1)

Insert:

tax receipt means a receipt given to you under subsection 70-5(1)

of Schedule 1 to the Taxation Administration Act 1953.

Taxation Administration Act 1953

2 After Part 2-10 in Schedule 1

Insert:

Part 2-15--Returns and assessments

Division 70--Tax receipts

Table of Subdivisions

Guide to Division 70

70-A

Tax receipts

Guide to Division 70

70-1 What this Division is about

The Commissioner must provide you with a tax receipt for an

income year if you are an individual taxpayer and the total tax

assessed to you for the income year is $100 or more (or such other

amount as determined by the Commissioner from time to time).

The tax receipt must include information about how the total tax

assessed to you for the income year is notionally used to finance

different categories of Commonwealth government expenditure.

Schedule 4 Tax receipts

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

No. , 2014

The tax receipt must also include information about the total

amount of Commonwealth government debt, for the current and

previous financial years, and the expected total amount of interest

to be paid on that debt during the current financial year.

Subdivision 70-A--Tax receipts

Table of sections

70-5

Tax receipt to be provided to certain individual taxpayers

70-5 Tax receipt to be provided to certain individual taxpayers

(1) The Commissioner must give you a

tax receipt in respect of an

income year if:

(a) the Commissioner is required to give you a notice of

assessment in respect of the income year and has not

previously given you a notice in respect of the income year;

and

(b) you are an individual; and

4 of subsection 4-10(3) of the Income Tax Assessment Act

1997) for the

financial year that corresponds to the income

year is equal to or greater than:

(i) if subparagraph (ii) does not apply--$100; or

(ii) if the Commissioner has made a determination under

subsection (2)--the amount specified in the

determination; and

(d) the notice is given to you within the period of 18 months

after the end of the income year.

(2) The Commissioner may, by legislative instrument, make a

determination that specifies an amount for the purposes of

subparagraph (1)(c)(ii).

(3) The

tax receipt must include the following information:

(a) your name;

(b) the amount mentioned in paragraph (1)(c);

Tax receipts Schedule 4

No. , 2014

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

used to finance different categories of Commonwealth

government expenditure (other than expenditure that relates

to amounts collected under the

GST law that are paid to the

States and Territories);

(d) an estimate of the total face value of Commonwealth stock

and securities on issue at the end of the previous

financial

year;

(e) an estimate of the expected total face value of

Commonwealth stock and securities on issue at the end of the

financial year;

(f) the expected total interest to be paid during the financial year

in respect of the Commonwealth stock and securities referred

to in paragraph (e).

Note:

The allocation of how the total tax assessed to you is spent is a

notional calculation and may not represent how the tax assessed to you

is actually spent.

(4) For the purposes of determining the amounts in paragraphs (2)(d)

to (f), the Commissioner must use the information in the budget

economic and fiscal outlook report prepared for the purpose of

section 10 of the Charter of Budget Honesty Act 1998 in respect of

the

financial year referred to in paragraph (1)(c).

(5) For the purposes of determining the form of the information to be

included in the

tax receipt, the Commissioner must seek the

advice of the Minister and take that advice into account.

(6) The Commissioner must give you the

tax receipt as soon as

practicable.

3 Application

The amendments made by this Schedule apply to assessments for the

2014-15 income year and later income years.

Schedule 5 Miscellaneous amendments

Part 1 References to specific Ministers, Departments and Secretaries

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

No. , 2014

Schedule 5

--Miscellaneous amendments

Part 1

--References to specific Ministers,

Departments and Secretaries

Division 1

--Main amendments

A New Tax System (Goods and Services Tax) Act 1999

1 Paragraphs 79-100(1)(b) and (c)

Omit "Treasurer", substitute "Minister".

2 Subsection 79-100(2) (heading)

Repeal the heading, substitute:

Minister to determine business vehicle use fraction for 2003-04 to

2006-07 financial years using statistical information

3 Subsection 79-100(2)

Omit "the Treasurer", substitute "the Minister".

4 Subsection 79-100(3) (heading)

Repeal the heading, substitute:

Minister to use later statistical information to determine whether

average input tax credit fraction to be varied for later financial

years

5 Subsection 79-100(3)

Omit "the Treasurer" (wherever occurring), substitute "the Minister".

6 Subsection 79-100(6)

Omit "Treasurer", substitute "Minister".

Miscellaneous amendments Schedule 5

References to specific Ministers, Departments and Secretaries Part 1

No. , 2014

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

Income Tax Assessment Act 1936

7 Subsection 6(1)

Repeal the following definitions:

(a) definition of Agriculture Secretary;

(b) definition of Arts Department;

(d) definition of Arts Secretary.

8 Subsection 6(1) (paragraph (a) of the definition of

Commonwealth securities)

Omit "Treasurer", substitute "Minister".

9 Subsection 6(1)

Repeal the following definitions:

(a) definition of Education Department;

(b) definition of Health Department;

(d) definition of Housing Secretary;

(e) definition of Immigration Department;

(f) definition of Immigration Minister;

(g) definition of Immigration Secretary;

(h) definition of Research Department;

(i) definition of Research Minister;

(j) definition of Research Secretary;

(k) definition of Trade Department;

(l) definition of Trade Minister;

(m) definition of Trade Secretary;

(n) definition of Veterans' Affairs Department;

(o) definition of Veterans' Affairs Minister.

10 Subsection 6(1) (definition of

Veterans' Affairs Secretary)

Repeal the definition, substitute:

Schedule 5 Miscellaneous amendments

Part 1 References to specific Ministers, Departments and Secretaries

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

No. , 2014

Veterans' Affairs Secretary means the Secretary of the

Department administered by the Minister administering the

Veterans' Entitlements Act 1986.

11 Subsection 73A(6)

Insert:

Research Secretary means the Secretary of the Department

administered by the Minister administering the Australian

Research Council Act 2001.

12 Subsections 79B(1B), (5) and (5A)

Omit "Treasurer" (wherever occurring), substitute "Minister".

13 Subsection 82CB(1) (definition of RHQ company)

Omit "Treasurer", substitute "Minister".

14 Sections 82CD and 82CE

Omit "Treasurer" (wherever occurring), substitute "Minister".

15 Subsections 128AE(2), (2AA), (2AB), (2AC), (2AD), (2A),

(2B) and (2C)

Omit "Treasurer" (wherever occurring), substitute "Minister".

Income Tax Assessment Act 1997

16 Subsection 30-80(1) (table item 9.1.1)

Omit "Treasurer", substitute "Minister".

17 Subsections 30-85(2) and (4)

Omit "Treasurer", substitute "Minister".

18 Subsection 30-85(5)

Omit "the Minister", substitute "the Foreign Affairs Minister".

19 Subsections 30-265(4) and 30-280(1)

Omit "Treasurer", substitute "Minister".

Miscellaneous amendments Schedule 5

References to specific Ministers, Departments and Secretaries Part 1

No. , 2014

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

20 Subsection 30-280(2)

Omit "Treasurer and the Minister", substitute "Minister and the

Environment Minister".

21 Subsection 30-280(2)

Omit "Minister has notified the Treasurer", substitute "Environment

Minister has notified the Minister".

22 Subsections 30-280(4), 30-285(1), 30-289(4) and 30-289B(1)

Omit "Treasurer", substitute "Minister".

23 Subsection 30-289B(2)

Omit "Treasurer and the Minister", substitute "Minister and the

Families Minister".

24 Subsection 30-289B(2)

Omit "Minister has notified the Treasurer", substitute "Families

Minister has notified the Minister".

25 Subsections 30-289B(4), 30-289C(1), 30-300(6) and

30-305(1)

Omit "Treasurer", substitute "Minister".

26 Subsection 30-305(2)

Omit "Treasurer and the Minister", substitute "Minister and the

Arts

Minister".

27 Subsection 30-305(2)

Omit "Minister has notified the Treasurer", substitute "Arts Minister

has notified the Minister".

28 Subsections 30-305(4), 30-310(1) and 34-55(1) and (2)

Omit "Treasurer", substitute "Minister".

29 Subsection 52-131(9) (note)

Omit "Education Department", substitute "Department administered by

the Education Minister".

Schedule 5 Miscellaneous amendments

Part 1 References to specific Ministers, Departments and Secretaries

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

No. , 2014

30 Paragraph 207-115(5)(a)

Omit "Treasurer", substitute "Minister".

31 Section 842-105 (table item 6)

Omit "Treasurer", substitute "Minister".

32 Subsection 995-1(1) (definition of Agriculture Department)

Repeal the definition, substitute:

Agriculture Department means the Department administered by

the Minister administering the Farm Household Support Act 2014.

33 Subsection 995-1(1)

Repeal the following definitions:

(a) definition of Agriculture Minister;

(b) definition of Arts Department;

34 Subsection 995-1(1) (definition of Arts Secretary)

Repeal the definition, substitute:

Arts Secretary means the Secretary of the Department

administered by the

Arts Minister.

35 Subsection 995-1(1) (definition of Climate Change

Department)

Repeal the definition.

36 Subsection 995-1(1) (definition of Climate Change

Minister)

Omit "section 1 of".

37 Subsection 995-1(1) (definition of Climate Change

Secretary)

Repeal the definition, substitute:

Climate Change Secretary means the Secretary of the Department

administered by the

Climate Change Minister.

Miscellaneous amendments Schedule 5

References to specific Ministers, Departments and Secretaries Part 1

No. , 2014

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

38 Subsection 995-1(1) (definition of Defence Department)

Repeal the definition.

39 Subsection 995-1(1) (definition of Defence Secretary)

Repeal the definition, substitute:

Defence Secretary means the Secretary of the Department

administered by the

Defence Minister.

40 Subsection 995-1(1) (definition of Education Department)

Repeal the definition.

41 Subsection 995-1(1) (definition of Education Minister)

Omit "section 1 of".

42 Subsection 995-1(1) (definition of Education Secretary)

Repeal the definition, substitute:

Education Secretary means the Secretary of the Department

administered by the

Education Minister.

43 Subsection 995-1(1) (definition of Employment

Department)

Repeal the definition.

44 Subsection 995-1(1) (definition of Employment Minister)

Repeal the definition.

45 Subsection 995-1(1) (definition of Employment Secretary)

Repeal the definition, substitute:

Employment Secretary means the Secretary of the Department

administered by the Minister administering the Fair Work (State

Referral and Consequential and Other Amendments) Act 2009.

46 Subsection 995-1(1) (definition of Environment

Department)

Repeal the definition.

Schedule 5 Miscellaneous amendments

Part 1 References to specific Ministers, Departments and Secretaries

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

No. , 2014

47 Subsection 995-1(1) (definition of Environment Minister)

Omit "section 1 of".

48 Subsection 995-1(1) (definition of Environment Secretary)

Repeal the definition, substitute:

Environment Secretary means the Secretary of the Department

administered by the

Environment Minister.

49 Subsection 995-1(1) (definition of Families Department)

Repeal the definition, substitute:

Families Department means the Department administered by the

Families Minister.

50 Subsection 995-1(1) (definition of Families Minister)

Repeal the definition, substitute:

Families Minister means the Minister administering the

Data-matching Program (Assistance and Tax) Act 1990.

51 Section 995-1 (definition of Foreign Affairs Minister)

Omit "section 1 of".

52 Subsection 995-1(1) (definition of Health Department)

Repeal the definition.

53 Subsection 995-1(1) (definition of Health Minister)

Omit "section 1 of".

54 Subsection 995-1(1) (definition of Health Secretary)

Omit "Health Department", substitute "Department administered by the

Health Minister".

55 Subsection 995-1(1) (definition of Heritage Department)

Repeal the definition.

Miscellaneous amendments Schedule 5

References to specific Ministers, Departments and Secretaries Part 1

No. , 2014

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

56 Subsection 995-1(1) (definition of Heritage Minister)

Repeal the definition.

57 Subsection 995-1(1) (definition of Heritage Secretary)

Repeal the definition, substitute:

Heritage Secretary means the Secretary of the Department

administered by the Minister administering the Australian Heritage

Council Act 2003.

58 Subsection 995-1(1) (definition of Housing Department)

Repeal the definition.

59 Subsection 995-1(1) (definition of Housing Minister)

Repeal the definition.

60 Subsection 995-1(1) (definition of Housing Secretary)

Repeal the definition, substitute:

Housing Secretary means the Secretary of the Department

administered by the Minister administering the National Rental

Affordability Scheme Act 2008.

61 Subsection 995-1(1) (definition of Immigration

Department)

Repeal the definition, substitute:

Immigration Department means the Department administered by

the Minister administering the Migration Act 1958.

62 Subsection 995-1(1) (definition of Immigration Minister)

Repeal the definition.

63 Subsection 995-1(1) (definition of Immigration Secretary)

Omit "Immigration Department", substitute "

Immigration

Department".

64 Subsection 995-1(1) (definition of Industry Department)

Repeal the definition, substitute:

Schedule 5 Miscellaneous amendments

Part 1 References to specific Ministers, Departments and Secretaries

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

No. , 2014

Industry Department means the Department administered by the

Minister administering the Industry Research and Development Act

1986.

65 Subsection 995-1(1)

Repeal the following definitions:

(a) definition of Industry Minister;

(b) definition of Transport Secretary.

66 Subsection 995-1(1) (definition of Water Department)

Repeal the definition, substitute:

Water Department means the Department administered by the

Water Minister.

67 Subsection 995-1(1) (definition of Water Minister)

Omit "section 1 of".

Taxation Administration Act 1953

68 Subsection 2(1) (definition of Immigration Minister)

Repeal the definition.

69 Subsection 355-50(2) in Schedule 1 (table item 7)

Omit "of the Treasury".

70 Subsection 355-65(4) in Schedule 1 (table item 7)

Repeal the item, substitute:

Miscellaneous amendments Schedule 5

References to specific Ministers, Departments and Secretaries Part 1

No. , 2014

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

the Secretary of the Department

is for the purpose of:

(a) briefing the Minister in relation to a

decision that the Minister may make

under the Foreign Acquisitions and

Takeovers Act 1975; or

(b) briefing the Minister in relation to a

decision that the Minister may make

in accordance with the document

issued by the Minister known as

Australia's Foreign Investment

Policy; or

who is authorised by the Minister to

make a decision mentioned in

paragraph (a) or (b) in relation to the

decision.

71 Subsection 355-65(4) in Schedule 1 (table item 8)

Omit "of the Treasury".

72 Subsection 355-65(4) in Schedule 1 (table item 8)

Omit "that Department", substitute "the Department".

73 Paragraph 355-70(8)(a) in Schedule 1

Omit "Attorney-General's Department", substitute "Department

administered by the Minister administering the Crimes Act 1914".

74 Transitional

--amendments do not affect things done

Things done under amended provisions

(1)

Subitem (2) applies to a thing done under a provision of an Act if:

(a) the provision is amended by an item of this Part; and

(b) the thing was in force immediately before the

commencement of that item.

(2)

The thing has effect, after the commencement of that item, as if it had

been done under that provision as amended by that item. However, this

is not taken to change the time at which the thing was actually done.

Schedule 5 Miscellaneous amendments

Part 1 References to specific Ministers, Departments and Secretaries

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

No. , 2014

Amendments do not affect requirements for things done

(3)

Subitem (4) applies to a thing done under an Act if:

(a) the thing was in force, and complied with a requirement of

that Act, immediately before the commencement of an item

of this Part; and

(b) immediately after the commencement of that item, the thing

fails to comply with that requirement solely because of the

amendments of that Act made by that item.

(4)

Disregard those amendments when considering, on and after the

commencement of that item, whether the thing complies with that

requirement.

Meaning of thing done

(5)

In this item, doing a thing includes:

(a) making an instrument; and

(b) making a decision.

75 Rules may deal with transitional etc. matters

(1)

The Minister may, by legislative instrument, make rules prescribing

matters of a transitional nature (including prescribing any saving or

application provisions) relating to the amendments or repeals made by

this Part.

(2)

This Part does not limit the rules that may be made for the purposes of

subitem (1).

Division 2

--Contingent amendments

Income Tax Assessment Act 1997

76 Subsection 995-1(1)

Repeal the following definitions:

(a) definition of Transport Department;

(b) definition of Transport Minister.

Note:

This item only commences if Part 2 of Schedule 2 to the Land Transport Infrastructure

Amendment Act 2014 commences.

Miscellaneous amendments Schedule 5

Amendments relating to excise Part 2

No. , 2014

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

Part 2

--Amendments relating to excise

Aviation Fuel Revenues (Special Appropriation) Act 1988

77 Section 3 (definition of index number)

Repeal the definition.

78 Section 3 (definition of relevant period)

Repeal the definition.

79 Section 3 (definition of relevant rate)

Repeal the definition.

80 Section 3 (paragraph (a) of the definition of statutory rate)

Repeal the paragraph, substitute:

(a) if a determination under subsection 3A(1) was in force at the

time duty was imposed on the eligible aviation fuel--the rate

fixed by that determination;

81 Subsection 3A(1)

Omit "subparagraph (a)(ii)", substitute "paragraph (a)".

82 Subsection 3A(3)

Omit "which corresponds to the method provided for by this Act for

indexing the relevant rate", substitute "set out in the determination".

83 Section 5

Repeal the section.

Schedule 5 Miscellaneous amendments

Part 3 Amendments relating to numbering

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

No. , 2014

Part 3

--Amendments relating to numbering

Income Tax Assessment Act 1997

84 Section 12-

5 (table item headed "National Disability

Insurance Scheme")

Omit "26-100", substitute "26-97".

85 Section 26-100 (the section 26-100 added by item 3 of

Schedule 3 to the National Disability Insurance Scheme

Legislation Amendment Act 2013)

Renumber as section 26-97.

86 Section 26-100 (the section 26-100 added by item 8 of

Schedule 3 to the Tax and Superannuation Laws

Amendment (Increased Concessional Contributions

Cap and Other Measures) Act 2013)

Renumber as section 26-98.

87 Section 40-235

Omit "26-100" (wherever occurring), substitute "26-97".

88 Subsection 110-38(7) (the subsection (7) added by item 6

of Schedule 3 to the National Disability Insurance

Scheme Legislation Amendment Act 2013)

Omit "26-100" (wherever occurring), substitute "26-97".

89 Subsection 110-38(7) (the subsection (7) added by item 9

of Schedule 3 to the Tax and Superannuation Laws

Amendment (2013 Measures No. 1) Act 2013)

Renumber as subsection (8).

90 Subsection 110-55(9G) (the subsection (9G) inserted by

item 7 of Schedule 3 to the National Disability

Insurance Scheme Legislation Amendment Act 2013)

Omit "26-100" (wherever occurring), substitute "26-97".

Schedule 5 Miscellaneous amendments

Part 4 Other amendments of principal Acts

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

No. , 2014

Part 4

--Other amendments of principal Acts

A New Tax System (Goods and Services Tax) Act 1999

92 Subsection 111-5(3)

Repeal the subsection, substitute:

(3) However, the acquisition is not a

creditable acquisition:

(a) to the extent (if any) that:

(i) the employee,

associate, agent,

officer or partner is

entitled to an input tax credit for acquiring the thing

acquired in incurring the expense; or

(ii) the acquisition would not, because of Division 69, be a

creditable acquisition if you made it; or

(b) unless the supply of the thing acquired, by the employee,

associate, agent, officer or partner in incurring the expense,

was a taxable supply; or

to an input tax credit if you had made the acquisition that the

employee, associate, agent, officer or partner made.

93 Application of amendment

The amendment made by item 92 applies in relation to acquisitions

made on or after 1 July 2000.

Fuel Tax Act 2006

94 Paragraph 43-7(2)(a)

Omit "biodiesel", substitute "

biodiesel".

Income Tax Assessment Act 1936

95 Subsection 6(1) (definition of income tax or tax)

Repeal the definition.

Miscellaneous amendments Schedule 5

Other amendments of principal Acts Part 4

No. , 2014

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

96 Subsection 6(1)

Insert:

income tax means income tax imposed as such by any Act, as

assessed under this Act, but, except in section 260, does not

include mining withholding tax or withholding tax.

97 Subsection 6(1)

Insert:

tax means income tax imposed as such by any Act, as assessed

under this Act, but does not include mining withholding tax or

withholding tax.

Income Tax Assessment Act 1997

98 Subsection 30-25(1) (cell at table item 2.1.2, column

headed "Special conditions--fund, authority or

institution")

Repeal the cell, substitute:

(a) the public fund must be:

(i) an

Australian government

agency; or

(ii) a

registered charity; or

(iii) operated by an Australian

government agency or

registered charity; and

(b) the public university must satisfy

the special conditions set out in

item 2.1.1

99 Subsection 30-45(1) (cell at table item 4.1.4, column

headed "Special conditions--fund, authority or

institution")

Repeal the cell, substitute:

the public fund must be:

(a) a

registered charity; or

(b) operated by a registered charity

Schedule 5 Miscellaneous amendments

Part 4 Other amendments of principal Acts

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

No. , 2014

100 Subsection 30-50(1) (cell at table item 5.1.2, column

headed "Special conditions--fund, authority or

institution")

Repeal the cell, substitute:

the public institution or public fund must

be:

(a) an

Australian government agency;

(b) a

registered charity; or

operated by an Australian

government agency or registered

charity

101 Subsection 30-50(1) (cell at table item 5.1.3, column

headed "Special conditions--fund, authority or

institution")

Repeal the cell, substitute:

the public fund must be:

(a) an

Australian government agency;

(b) a

registered charity; or

government agency or registered

charity

102 Subsection 30-70(1) (cells at table items 8.1.1 and 8.1.2,

column headed "Special conditions--fund, authority or

institution")

Repeal the cells, substitute:

the public fund must be:

(a) a

registered charity; or

(b) operated by a registered charity

103 Application of amendments

The amendments made by items 98 to 102 apply to gifts made on or

after 3 December 2012.

Miscellaneous amendments Schedule 5

Other amendments of principal Acts Part 4

No. , 2014

Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

104 Subsections 104-255(1) and (2)

Omit "payment", substitute "

payment".

105 Subsection 104-255(6)

Omit "

carried interest", substitute "carried interest".

106 Section 165-205

Repeal the section, substitute:

165-205 Death of share owner

(1) If an individual beneficially owns

shares in a company when he or

she dies, this section applies if and while the shares:

(a) are owned by the trustee of the deceased's estate; or

(b) are beneficially owned by someone who receives them as a

beneficiary of the deceased's estate.

(2) For the purposes of a test:

(a) the

shares are taken to continue to be beneficially owned by

the deceased; and

(b) as a result of being taken to continue to beneficially own the

shares, the deceased is taken to continue:

(i) to have any rights to exercise, or to be able to control

(whether directly, or indirectly through one or more

interposed entities), any of the voting power in the

company; and

(ii) to have any rights to receive for the deceased's own

benefit (whether directly or

indirectly) any

dividends

that the company may pay; and

(iii) to have any rights to receive for the deceased's own

benefit (whether directly or indirectly) any distributions

of capital of the company.

107 Application of amendment

The amendment made by item 106 applies to assessments for the

1997-98 income year and later income years.

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108 Section 219-70

Repeal the section, substitute:

219-70 Tax offset under section 205-70

(1) For the purposes of paragraph 205-70(1)(c), if a

life insurance

company was entitled to a

tax offset under section 205-70 for a

previous income year, assume section 63-10 applied to the part of

the company's basic income tax liability for that previous income

year that was attributable to its shareholders.

(2) In working out the part of the company's basic income tax liability

that was attributable to its shareholders, have regard to the

company's accounting records.

Example: The following apply to a life insurance company that satisfies the

residency requirement for an income year:

(a) the company has a tax offset of $60,000 under section 205-70

(the franking deficit offset) for that year;

(b) the company's basic income tax liability for that year would be

$100,000 if the franking deficit offset were disregarded;

shareholders (the shareholders' part).

As a result of applying $20,000 of the franking deficit offset to reduce

the shareholders' part to nil, the company's basic income tax liability

becomes $80,000. The remaining $40,000 of the offset will be

included in a franking deficit tax offset for the next income year for

which the company satisfies the residency requirement.

109 Subsection 219-75(1) (note)

Omit "amount mentioned in paragraph 219-70(1)(b)", substitute

"company's basic income tax liability mentioned in

subsection 219-70(1)".

110 Subsection 219-75(2) (method statement, step 1)

Omit "amount mentioned in paragraph 219-70(1)(b)", substitute

"company's basic income tax liability mentioned in

subsection 219-70(1)".

111 Subsection 219-75(2) (method statement, step 1, note)

Omit "paragraph 219-70(1)(b)", substitute "that subsection".

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112 Application of amendments

The amendments made by items 108 to 111 apply in relation to the

2006-07 income year and later income years.

113 Section 355-400 (note)

Omit "arms' length", substitute "arm's length".

114 Paragraph 701-55(2)(d)

Repeal the paragraph, substitute:

(d) where just before that time the prime cost method applied for

working out the asset's decline in value and the asset's

tax

cost setting amount exceeds the joining entity's terminating

value for the asset--either:

(i) the

head company were required to choose at that time

an effective life for the asset in accordance with

subsections 40-95(1) and (3), and any choice of an

effective life determined by the Commissioner were

limited to one in force at that time; or

(ii) an effective life for the asset were worked out under

subsection 40-95(7), (8), (9) or (10) at that time; and

115 Paragraph 709-185(1)(c)

Repeal the paragraph, substitute:

after applying section 63-10 (about the tax offset priority

rules) to the joining entity's basic income tax liability for that

income year.

116 Subsection 709-185(2)

Repeal the subsection, substitute:

Transfer of excess to head company

(2) For the purpose of applying subsection 205-70(1) to the

head

company of the

consolidated group for the income year in which

the joining time occurs:

(a) if, as described in paragraph 205-70(1)(c), an amount of a

tax offset remains after applying section 63-10--that

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2014

No. , 2014

amount is taken to be increased by the amount of the joining

entity's excess; or

(b) otherwise:

(i) paragraph 205-70(1)(c) is taken to apply to the head

company; and

(ii) the remaining amount of a tax offset covered by that

paragraph is taken to be the amount of the joining

entity's excess.

Note:

Paragraph 205-70(1)(c) refers to tax offsets under section 205-70.

(2A) In working out whether paragraph (2)(a) applies, take into account

any application of this section to any other entity that became a

subsidiary member of the group before the joining time.

117 Paragraph 709-190(b)

Repeal the paragraph, substitute:

(b) an amount (the excess) of the offset remains after applying

section 63-10 (about the tax offset priority rules) to the head

company's basic income tax liability for that income year;

and

118 Paragraph 709-190(d)

Omit "excess mentioned in paragraph (b)", substitute "excess".

119 Application of amendments

The amendments made by items 115 to 118 apply in relation to the

2006-07 income year and later income years.

120 Subsection 709-215(4) (after table item 4)

Insert:

Both these conditions are met:

(a) the entity that is owed the debt for the

debt test period is the

head company of

consolidated group;

(b) the period ends when a

subsidiary

member of the group ceases to be a

member of the group without

becoming a member of another

The start of

the debt test

period

The end of the

debt test

period

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consolidated group

121 Application of amendment

The amendment made by item 120 applies in relation to debt test

periods starting on or after 1 July 2002.

Superannuation Guarantee (Administration) Act 1992

122 Paragraph 10(3)(a)

Before "benefits", insert "the minimum".

Taxation Administration Act 1953

123 Subsection 8AAZLGA(7) (note)

Omit "14ZW(1)(aac)", substitute "14ZW(1)(aad)".

124 Paragraph 8C(1)(a)

Omit "an approved form or".

125 Paragraph 14ZW(1AABA)(b)

Omit "a payments", substitute "a payment".

Note:

This item fixes a grammatical error.

126 Paragraph 15-30(d) in Schedule 1

Omit "prescribed".

127 Subsection 15-50(1) in Schedule 1 (heading)

Repeal the heading, substitute:

Declarations about matters

128 Paragraph 15-50(1)(b) in Schedule 1

Omit "prescribed".

129 Paragraph 15-50(2)(b) in Schedule 1

Omit "a prescribed", substitute "any".

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Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

No. , 2014

130 Paragraph 15-50(3)(b) in Schedule 1

Omit "prescribed".

131 Paragraph 15-50(4)(a) in Schedule 1

Repeal the paragraph.

132 Transitional

--existing declarations

(1)

This item applies to a declaration:

(a) given under subsection 15-50(1) or (3) in Schedule 1 to the

Taxation Administration Act 1953; and

(b) in effect immediately before the commencement of this item.

(2)

The declaration has effect, after the commencement of this item, as if it

had been given under that subsection as amended by this Act.

133 Paragraph 45-235(1)(a) in Schedule 1

Omit "former paragraph 45-115(1)(c) or 45-175(1)(b)", substitute

"paragraph 45-115(1)(c) or former paragraph 45-175(1)(b)".

134 Subsection 155-15(1) in Schedule 1 (cell at table item 3,

column 3)

Repeal the cell, substitute:

return, given as described in

one of the following

provisions, in relation to the

importation:

(a) paragraph 69(8)(a), (b) or

(c), or 70(7)(a), of the

Customs Act 1901;

(b) regulations prescribed

for the purposes of

paragraph 69(8)(d) of

that Act

135 Application of amendment

The amendment made by item 134 applies in relation to GST payable

on or after the day this Act receives the Royal Assent on taxable

importations.

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136 Section 280-170 in Schedule 1

Omit "

Division 293 tax,,", substitute "

Division 293 tax,".

137 Paragraph 298-5(c) in Schedule 1

Omit "section 426-120", substitute "section 420-5 or 426-120".

138 Subsection 340-10(2) in Schedule 1 (table item 3)

Omit "or 170AA", substitute ", former section 170AA".

139 Subsection 355-65(2) in Schedule 1 (table item 5A)

Repeal the item, substitute:

the

Families Secretary or the

Chief Executive Centrelink

(within the meaning of the

Human Services (Centrelink) Act

1997)

is for the purpose of administering the

Paid Parental Leave Act 2010.

140 Application of amendment

The amendment made by item 139 applies to records and disclosures of

information made on or after 1 July 2011 (whenever the information

was acquired).

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Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

No. , 2014

Part 5

--Other amendments of amending Acts

New Business Tax System (Consolidation, Value Shifting,

Demergers and Other Measures) Act 2002

141 Item 34 of Schedule 13 (heading)

Repeal the heading, substitute:

34 Subsection 995-1(1)

142 Item 34 of Schedule 13

Omit "Repeal the definition, substitute:", substitute "Insert:".

143 Item 19 of Schedule 15 (heading)

Repeal the heading, substitute:

19 After Division 976

Superannuation Legislation Amendment (Stronger Super)

Act 2012

144 After subitem 20(1) of Schedule 1

Insert:

(1A)

Subject to subitems (2), (3) and (3A), the amendments made by this

Schedule apply in relation to an entity that is an employer in relation to

conduct that occurs on or after 1 July 2015.

145 After subitem 20(3) of Schedule 1

Insert:

(3A)

The amendments made by this Schedule apply in relation to an entity in

relation to conduct that occurs on or after a day (the test day) in the

period beginning on 2 July 2014 and ending on 30 June 2015 if:

(a) neither subitem (2) nor (3) applies to the entity; and

(b) the entity starts to be an employer on the test day; and

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Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

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employer.

Tax Laws Amendment (2009 Budget Measures No. 2) Act

2009

146 Item 55 of Schedule 1 (heading)

Repeal the heading, substitute:

55 Subsection 707-325(5) (note 1)

Tax Laws Amendment (2011 Measures No. 9) Act 2012

147 Item 29 of Schedule 6

Repeal the item, substitute:

29 Paragraph 8C(1)(a)

Omit "furnish", substitute "give".

29A Paragraph 8C(1)(a)

After "information", insert "or document".

148 Item 83 of Schedule 6 (heading)

Repeal the heading, substitute:

83 Subsection 995-1(1) (definition of untaxable

Commonwealth entity)

149 Item 140 of Schedule 6 (heading)

Repeal the heading, substitute:

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Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

No. , 2014

140 Section 11-

15 (before table item headed "resale royalty

collecting societies

Tax Laws Amendment (2012 Measures No. 3) Act 2012

150 Item 12 of Schedule 1

Repeal the item, substitute:

12 Subsection 15-10(2) in Schedule 1

After "12-FB", insert ", 12-FC".

Tax Laws Amendment (2012 Measures No. 6) Act 2013

151 Section 4

Before "Section 170", insert "(1)".

152 At the end of section 4

Add:

(2) Section 170 of the Income Tax Assessment Act 1936 does not

prevent the amendment of an assessment if:

(a) the assessment was made before the commencement of this

subsection; and

(b) the amendment is made within 2 years after that

commencement; and

item 30 or 31 of Schedule 8 (about farm management

deposits) to this Act.

Tax Laws Amendment (Research and Development) Act 2011

153 Item 49 of Schedule 3

Omit "73G(1),", substitute "73G(1)".

154 Item 50 of Schedule 3

Omit "73G,", substitute "73G".

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Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill

2014

Tax Laws Amendment (Temporary Budget Repair Levy) Act

2014

155 Section 3

Omit "Each Act", substitute "(1) Each Act, and each regulation,".

156 At the end of section 3

Add:

(2) The amendment of any regulation under subsection (1) does not

prevent the regulation, as so amended, from being amended or

repealed by the Governor-General.

Commonwealth of Australia Bills

TAX AND SUPERANNUATION LAWS AMENDMENT (2014 MEASURES NO. 4) BILL 2014