TAX AND SUPERANNUATION LAWS AMENDMENT (2014 MEASURES NO. 7) 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. 7) Bill

2014

No. , 2014

(Treasury)

A Bill for an Act to amend the law relating to

taxation and superannuation, and for related

purposes

No. , 2014

Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill

2014

Contents

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

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

Schedules ........................................................................................... 4

Amendment of assessments ............................................................... 4

Schedule 1--Excess non-concessional superannuation

contributions tax reforms

Income Tax Assessment Act 1997

Taxation Administration Act 1953

Schedule 2--Transferring tax investigation function to

Inspector-General of Taxation

Part 1--Main amendments

Inspector-General of Taxation Act 2003

Ombudsman Act 1976

Part 2--Other amendments

Income Tax Assessment Act 1936

Tax Agent Services Act 2009

Taxation Administration Act 1953

Part 3--Application and transitional provisions

Schedule 3--CGT exemption for compensation and insurance

Income Tax Assessment Act 1997

Schedule 4--Providing certainty for superannuation fund

mergers

Part 1--Main amendments

Income Tax Assessment Act 1997

Income Tax (Transitional Provisions) Act 1997

Taxation Administration Act 1953

Part 2--Other amendments

Income Tax Assessment Act 1997

Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill

2014

No. , 2014

Schedule 5--Disclosing tax information relating to proceeds of

crime orders

Taxation Administration Act 1953

Schedule 6--Exploration development incentive

Part 1--Main amendments

Income Tax Assessment Act 1997

Part 2--Other amendments

Income Tax Assessment Act 1936

Income Tax Assessment Act 1997

Taxation Administration Act 1953

Part 3--Repeal of Division 418

Income Tax Assessment Act 1936

Income Tax Assessment Act 1997

Taxation Administration Act 1953

Part 4--Application and saving provisions

Division 1--Application of amendments

Division 2--Savings provisions relating to repeal of Division 418

Schedule 7--Miscellaneous amendments

Part 1--Amendments commencing on the day after this Act

receives the Royal Assent

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

Excise Act 1901

Income Tax Assessment Act 1936

Income Tax Assessment Act 1997

Income Tax (Transitional Provisions) Act 1997

Petroleum Resource Rent Tax Assessment Act 1987

Retirement Savings Accounts Act 1997

Superannuation Act 2005

Superannuation Guarantee (Administration) Act 1992

Superannuation Industry (Supervision) Act 1993

No. , 2014

Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill

2014

iii

Superannuation (Productivity Benefit) Act 1988

Taxation Administration Act 1953

Part 2--Other amendments

Petroleum Resource Rent Tax Assessment Act 1987

Superannuation Laws Amendment (Capital Gains Tax Relief and

Other Efficiency Measures) Act 2012

Superannuation Legislation Amendment (Further MySuper and

Transparency Measures) Act 2012

Tax and Superannuation Laws Amendment (2013 Measures No. 2) Act

2013

Tax Laws Amendment (2013 Measures No. 2) Act 2013

No. , 2014

Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill

2014

A Bill for an Act to amend the law relating to

taxation and superannuation, and for related

purposes

The Parliament of Australia enacts:

1 Short title

This Act may be cited as the Tax and Superannuation Laws

Amendment (2014 Measures No. 7) 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. 7) Bill

2014

No. , 2014

Commencement information

Column 1

Column 2

Column 3

Provisions

Commencement

Date/Details

1. Sections 1 to 4

and anything in

this Act not

elsewhere covered

by this table

The day this Act receives the Royal Assent.

2. Schedule 1

The day after this Act receives the Royal

Assent.

3. Schedule 2

The later of:

(a) the 14th day after this Act receives the

Royal Assent; and

(b) 1 May 2015.

4. Schedule 3

The day after this Act receives the Royal

Assent.

5. Schedule 4

1 July 2015.

1 July 2015

6. Schedule 5

The day after this Act receives the Royal

Assent.

7. Schedule 6,

items 1 to 20

The day this Act receives the Royal Assent.

8. Schedule 6,

item 21

The later of:

(a) immediately after the commencement of

the provisions covered by table item 1;

and

(b) immediately after the commencement of

Schedule 4 to the Treasury Legislation

Amendment (Repeal Day) Act 2014.

However, the provisions do not commence

at all if the event mentioned in paragraph (b)

does not occur.

9. Schedule 6,

item 22

The day this Act receives the Royal Assent.

10. Schedule 6,

item 23

The later of:

(a) immediately after the commencement of

the provisions covered by table item 1;

and

No. , 2014

Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill

2014

Commencement information

Column 1

Column 2

Column 3

Provisions

Commencement

Date/Details

(b) immediately after the commencement of

Part 2 of Schedule 2 to the Treasury

Legislation Amendment (Repeal Day)

Act 2014.

However, the provisions do not commence

at all if the event mentioned in paragraph (b)

does not occur.

11. Schedule 6,

items 24 to 37

The day this Act receives the Royal Assent.

12. Schedule 6,

Part 3

1 July 2020.

1 July 2020

13. Schedule 6,

Part 4, Division 1

The day this Act receives the Royal Assent.

14. Schedule 6,

Part 4, Division 2

1 July 2020.

1 July 2020

15. Schedule 7,

Part 1

The day after this Act receives the Royal

Assent.

16. Schedule 7,

item 44

Immediately after the commencement of

Schedule 3 to the Petroleum Resource Rent

Tax Assessment Amendment Act 2012.

1 July 2012

17. Schedule 7,

items 45 and 46

Immediately after the commencement of

Division 3 of Part 1 of Schedule 4 to the

Superannuation Laws Amendment (Capital

Gains Tax Relief and Other Efficiency

Measures) Act 2012.

29 November

2012

18. Schedule 7,

items 47 and 48

Immediately after the commencement of

Part 2 of Schedule 4 to the Superannuation

Laws Amendment (Capital Gains Tax Relief

and Other Efficiency Measures) Act 2012.

29 November

2012

19. Schedule 7,

items 49 and 50

Immediately after the commencement of

item 42 of Schedule 3 to the Superannuation

Legislation Amendment (Further MySuper

and Transparency Measures) Act 2012.

1 July 2013

20. Schedule 7,

item 51

The day after this Act receives the Royal

Assent.

Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill

2014

No. , 2014

Commencement information

Column 1

Column 2

Column 3

Provisions

Commencement

Date/Details

21. Schedule 7,

item 52

Immediately after the commencement of

item 11 of Schedule 1 to the Tax and

Superannuation Laws Amendment (2013

Measures No. 2) Act 2013.

28 June 2013

22. Schedule 7,

items 53 and 54

Immediately after the commencement of

item 34 of Schedule 2 to the Tax Laws

Amendment (2013 Measures No. 2) Act

2013.

11 July 2013

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.

(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 Schedules

Legislation 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.

4 Amendment of assessments

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

Schedule 3 (about CGT exemption for compensation and

insurance) to this Act; and

(b) the amendment is made for the purpose of giving effect to

that Schedule; and

Schedule commences.

Note:

The 2-year period in paragraph (c) can be extended (see section 170A

of the Income Tax Assessment Act 1936).

Excess non-concessional superannuation contributions tax reforms Schedule 1

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Schedule 1

--Excess non-concessional

superannuation contributions tax

reforms

Income Tax Assessment Act 1997

1 Section 10-

5 (table item headed "superannuation")

Before:

benefits generally ............................................................... Divisions 301 to 306

insert:

associated earnings on non-concessional contributions ..... Subdivision 292-B

2 Section 11-

55 (table item headed "superannuation")

Omit:

release authorities, payments from ..................................... 303-15

303-20

304-15

substitute:

release authorities, payments from ..................................... 303-15

303-17

303-20

304-15

3 Section 13-

1 (table item headed "superannuation")

After:

generally ............................................................................. Divisions 301 and

302

insert:

associated earnings on non-concessional contributions ..... Subdivision 292-B

4 Subsection 280-15(3)

Repeal the subsection, substitute:

(3) If non-concessional contributions exceed an indexed cap, the

individual can:

Schedule 1 Excess non-concessional superannuation contributions tax reforms

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(a) elect to release an amount corresponding to that excess, and

85% of the associated earnings on that excess, from the

individual's superannuation interests; or

(b) elect not to release such an amount if the value of the

individual's superannuation interests is nil.

An amount corresponding to those associated earnings is then

included in the individual's assessable income and gives rise to a

tax offset.

(4) The individual is taxed:

(a) if the amount released as described in paragraph (3)(a) fell

short of that excess--on that shortfall; or

(b) on that excess, if the individual did not make either of those

elections.

An amount equal to this tax liability must be released from the

individual's superannuation interests.

5 Division 292 (heading)

Repeal the heading, substitute:

Division 292--Excess non-concessional contributions

6 Section 292-1

Repeal the section, substitute:

292-1 What this Division is about

This Division limits the superannuation contributions made in a

financial year that receive concessional tax treatment.

You become liable for tax if:

(a)

your non-concessional contributions exceed an indexed

cap; and

(b)

you do not release a corresponding amount from your

superannuation interests;

unless the value of your superannuation interests is nil.

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An amount will be included in your assessable income, and you

will become entitled to a tax offset, if you release such an amount

or if the value of your superannuation interests is nil.

7 After Subdivision 292-A

Insert:

Subdivision 292-B--Assessable income and tax offset

292-15 What this Subdivision is about

An amount is included in your assessable income, and you are

entitled to a tax offset, if your non-concessional contributions

exceed an indexed cap and:

(a)

as a result, you release an amount from your

superannuation interests; or

(b)

the value of your superannuation interests is nil.

This amount included in your assessable income corresponds to

your associated earnings on those excess contributions.

Table of sections

292-20

Amount in assessable income, and tax offset, relating to your

non-concessional contributions

292-25

Amount included in assessable income

292-30

Amount of the tax offset

292-20 Amount in assessable income, and tax offset, relating to your

non-concessional contributions

Your assessable income for an income year includes an amount,

and you are entitled to a

tax offset for the income year, if:

(a) you receive one or more

excess non-concessional

contributions determinations for a

financial year that

corresponds to the income year; and

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(b) you make one or more elections under paragraph 96-7(1)(a)

or (b) in Schedule 1 to the Taxation Administration Act 1953

in relation to those determinations.

292-25 Amount included in assessable income

(1) The amount included in your assessable income for the income

year is equal to the amount of associated earnings stated in the

most recent of those determinations.

(2) However, if:

(a) the sum of any amounts paid to you in response to release

authorities issued in relation to those determinations (the

total amount) is less than the amount of the excess stated in

the most recent of those determinations; and

(b) section 292-467 does not apply to you for the

financial year;

the amount included in your assessable income for the income year

is equal to the amount of associated earnings that would have been

stated in that most recent determination if the total amount had

been the amount of the excess stated in that determination.

Note 1:

The amount included in your assessable income may be nil.

Note 2:

Any amounts paid to you in response to those release authorities are

non-assessable non-exempt income (see section 303-17).

292-30 Amount of the tax offset

The

tax offset is equal to 15% of the amount included in your

assessable income for the income year under section 292-25.

Note 1:

This tax offset compensates for any tax liability of the superannuation

provider on earnings from investments made with the contributions

making up the excess amount stated in the most recent determination.

Note 2:

This offset cannot be refunded, transferred or carried forward (see

item 20 of the table in subsection 63-10(1)).

8 Subsection 292-85(1)

Repeal the subsection, substitute:

(1) You have excess non-concessional contributions for a

financial

year if:

Excess non-concessional superannuation contributions tax reforms Schedule 1

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Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill

2014

(a) you receive one or more

excess non-concessional

contributions determinations for the financial year; and

(b) the excess amount stated in the most recent of those

determinations exceeds the sum of any amounts paid to you

in response to release authorities issued, in relation to those

determinations, under section 96-12 in Schedule 1 to the

Taxation Administration Act 1953; and

financial year.

(1A) The amount of your excess non-concessional contributions is:

(a) if no amounts were paid to you as described in

paragraph (1)(b)--the excess amount stated in that most

recent determination; or

(b) otherwise--the amount of the excess worked out under

paragraph (1)(b).

Note:

Any excess non-concessional contributions determination you receive

after the first one for a financial year is an amended determination.

9 Subsection 292-465(1)

After "for the purposes of this Division", insert "and Subdivision 97-B

in Schedule 1 to the Taxation Administration Act 1953".

10 Paragraph 292-465(2)(b)

Repeal the paragraph, substitute:

(b) if you receive one or more

excess non-concessional

contributions determinations for the

financial year--before

the end of:

(i) the period of 60 days starting on the day you receive the

most recent of those determinations; or

(ii) a longer period allowed by the Commissioner.

11 Subsections 292-465(3) and (4)

Omit "the determination" (first occurring), substitute "a determination

under subsection (1)".

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12 Subsection 292-465(7)

Omit "the determination", substitute "a determination made under

subsection (1)".

13 Subsection 292-465(8)

Omit "under this section", substitute "made under subsection (1)".

14 Paragraph 292-465(9)(b)

Omit "this section", substitute "subsection (1)".

15 After section 292-465

Insert:

292-467 Direction that the value of superannuation interests is nil

(1) The Commissioner must, by writing, direct that this section applies

to you for a

financial year if:

(a) you receive one or more

excess non-concessional

contributions determinations for the financial year; and

(b) as a result of those determinations, you make one or more

elections under paragraph 96-7(1)(a) or (b) in Schedule 1 to

the Taxation Administration Act 1953; and

Schedule--the sum of any amounts paid to you in response

to any release authorities issued in relation to those elections

is less than the excess amount stated in the most recent of

those determinations; and

(d) the Commissioner is satisfied that the

value of all of your

remaining

superannuation interests is nil.

Note 1:

The direction means you have no excess non-concessional

contributions for the financial year (see paragraph 292-85(1)(c)), even

though not all of the excess amount has been released to you.

Note 2:

The direction does not prevent an amount from being included in your

assessable income (see Subdivision 292-B).

Note 3:

Any excess non-concessional contributions determination you receive

after the first one for a financial year is an amended determination.

(2) The Commissioner must give you a copy of the direction.

Excess non-concessional superannuation contributions tax reforms Schedule 1

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2014

(3) A direction under this section may be included in a notice of

assessment.

(4) To avoid doubt:

(a) you may object under section 292-245 against an

excess

non-concessional contributions tax assessment made in

relation to you on the ground that a direction was not made

under this section; and

(b) for the purposes of paragraph (e) of Schedule 1 to the

Administrative Decisions (Judicial Review) Act 1977, not

making a direction under this section is a decision forming

part of the process of making an assessment of tax under this

Act.

16 After section 303-15

Insert:

303-17 Payments from release authorities etc.--released

non-concessional contributions and associated earnings

superannuation benefit is not assessable income and is not

exempt income if it is paid to you in response to a release

authority issued under section 96-12 in Schedule 1 to the Taxation

Administration Act 1953.

Note:

A related amount may still be included in your assessable income (see

Subdivision 292-B).

17 Subsection 995-1(1)

Insert:

excess non-concessional contributions determination has the

meaning given by subsection 97-25(2) in Schedule 1 to the

Taxation Administration Act 1953.

total release amount, in relation to an

excess non-concessional

contributions determination, has the meaning:

(a) given by paragraph 97-25(1)(c) in Schedule 1 to the Taxation

Administration Act 1953; and

(b) affected by subsection 96-7(2) in that Schedule.

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Taxation Administration Act 1953

18 After section 14ZVB

Insert:

14ZVC Objections relating to non-concessional contributions

Taxation decisions to which section applies

(1) This section applies to the following taxation decisions:

(a) an assessment against which a taxation objection may be

made under section 175A of the Income Tax Assessment Act

1936;

(b) an excess non-concessional contributions determination

(within the meaning of the Income Tax Assessment Act

1997);

made under section 292-245 of the Income Tax Assessment

Act 1997;

(d) a determination under section 292-465 of the Income Tax

Assessment Act 1997, or a decision not to make a

determination under that section;

(e) a direction under section 292-467 of the Income Tax

Assessment Act 1997, or a decision not to make a direction

under that section;

(f) 2 or more taxation decisions that are taken to be a single

taxation decision under subsection (2).

Decisions treated as single decision for common objection ground

(2) If:

(a) a person makes a taxation objection at a particular time, on a

particular ground, against a taxation decision to which this

section applies; and

(b) at that time, the person also objects, or could also object, on

that ground, against another taxation decision to which this

section applies;

then, for the purposes of this Part, those taxation decisions are

taken to be a single taxation decision.

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Limited objection rights because of earlier objection

(3) A person cannot object under this Part against a taxation decision

to which this section applies on a particular ground if:

(a) the ground was a ground for an objection the person has

made against another decision to which this section applies;

(b) the ground could have been a ground for an objection the

person has made against another decision to which this

section applies.

19 After paragraph 14ZW(1)(aac)

Insert:

(aaca) if the taxation objection is made on a particular ground under

any of the following provisions:

(i) section 175A of the Income Tax Assessment Act 1936;

(ii) section 97-35 in Schedule 1 to this Act;

(iii) section 292-245, 292-465 or 292-467 of the Income Tax

Assessment Act 1997;

within the same period that the person must lodge a taxation

objection on that ground under section 292-245 of the Income

Tax Assessment Act 1997; or

20 Part 2-35 in Schedule 1 (heading)

Repeal the heading, substitute:

Part 2-35--Excess superannuation contributions

21 Section 96-1 in Schedule 1

Repeal the section, substitute:

96-1 What this Subdivision is about

You may elect to release from your superannuation interests:

(a)

up to 85% of your excess concessional contributions for

a financial year; and

Schedule 1 Excess non-concessional superannuation contributions tax reforms

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(b)

your non-concessional contributions that exceed your

non-concessional contributions cap for the financial

year, and 85% of any associated earnings.

Superannuation providers will usually be required to pay an

amount from the superannuation interests. However, for certain

interests the provider may choose whether or not to pay.

Released concessional contributions are paid to the Commissioner.

You get a credit for the released amount. Surplus credits are

refunded to you under Division 3A of Part IIB.

Released non-concessional contributions and associated earnings

are paid to you.

22 Section 96-5 in Schedule 1 (heading)

Repeal the heading, substitute:

96-5 Electing to release excess concessional contributions

23 Subsection 96-5(1) in Schedule 1

After "

excess concessional contributions determination", insert "for a

financial year".

24 Subsection 96-5(1) in Schedule 1 (note 1)

Omit "Division 97", substitute "Subdivision 97-A".

25 Paragraph 96-5(5)(b) in Schedule 1

Omit "section 96-40", substitute "subsection 96-40(1)".

26 After section 96-5 in Schedule 1

Insert:

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Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill

2014

96-7 Electing to release non-concessional contributions etc.

Original determinations

(1) If you receive an

excess non-concessional contributions

determination for a

financial year, you may:

(a) elect to release the

total release amount stated in the

determination from your

superannuation interests; or

(b) elect not to release that total release amount if the value of

your superannuation interests is nil; or

reason.

Note 1:

For excess non-concessional contributions determinations, see

Subdivision 97-B.

Note 2:

The released amount will be non-assessable non-exempt income (see

section 303-17 of the Income Tax Assessment Act 1997), but an

amount corresponding to your associated earnings on those excess

contributions will be included in your assessable income (see

Subdivision 292-B of that Act).

Note 3:

If the value of your superannuation interests is between nil and that

total release amount, you could first make an election under

paragraph (a) and then a further election under paragraph (b) (see

subsection (6)).

Note 4:

An election purportedly made under paragraph (b) will be invalid if

the value of your superannuation interests was not nil.

Amended determinations

(2) However, if that determination is an amended determination that

increased the

total release amount, any election under

subsection (1) relating to the amended determination is to be made

as if that new total release amount were reduced by:

(a) if you made an election under paragraph (1)(a) for each

earlier

excess non-concessional contributions determination

you received for the

financial year--the sum of any amounts

paid to you in response to release authorities issued in

relation to those determinations; or

(b) otherwise--the total release amount stated in the most recent

of those earlier determinations.

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(3) Receiving an amended determination does not prevent you from

making an election under subsection (1) in relation to an earlier

determination.

Requirements for election

(4) You make an election under paragraph (1)(a) by identifying:

(a) one or more superannuation providers who hold one or more

superannuation interests for you; and

(b) the amount each superannuation provider is to release.

(5) An election under paragraph (1)(a), (b) or (c) relating to an

excess

non-concessional contributions determination must:

(a) be in the

approved form; and

(b) be given to the Commissioner within:

(i) 60 days after the Commissioner issued notice of that

determination; or

(ii) a further period allowed by the Commissioner.

Unsuccessful release--making a further election

(6) If:

(a) you make a valid election under paragraph (1)(a); and

(b) the Commissioner gives you a notice under

subsection 96-40(2) stating an amount (the unpaid amount)

that a

superannuation provider did not pay in relation to the

release authority issued in relation to that election;

you may make a further election under paragraph (1)(a) or (b) for

the release, or non-release, of the unpaid amount.

Note:

That further election would be under paragraph (1)(b) if the value of

your superannuation interests is now nil.

(7) The further election must comply with subsection (4) and

paragraph (5)(a), and must be given to the Commissioner within:

(a) 60 days after the Commissioner issued the notice mentioned

in paragraph (6)(b); or

(b) a further period allowed by the Commissioner.

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Election is irrevocable

(8) An election under this section is irrevocable.

27 Section 96-10 in Schedule 1 (heading)

Repeal the heading, substitute:

96-10 Release authorities for elections under section 96-5

28 Subsection 96-10(1) in Schedule 1

Omit "in relation to

excess concessional contributions you have for a

financial year".

29 After section 96-10 in Schedule 1

Insert:

96-12 Release authorities for elections under section 96-7

(1) The Commissioner must issue one or more release authorities

under this section if you make a valid election under

paragraph 96-7(1)(a).

(2) A release authority may be issued to:

(a) a

superannuation provider identified in the election; or

(b) any other superannuation provider who holds one or more

superannuation interests for you.

(3) Each release authority must:

(a) state the total amount to be released by the

superannuation

provider from

superannuation interests held by the provider

for you; and

(b) be dated; and

considers relevant.

30 Section 96-15 in Schedule 1

Omit "payment", substitute "notice under section 96-35".

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31 Subsection 96-20(1) in Schedule 1

Omit "that has been".

32 After subsection 96-20(1) in Schedule 1

Insert:

(1A) A

superannuation provider issued with a release authority under

section 96-12 must, within 21 days after the release authority is

issued (or a further period allowed by the Commissioner), pay to

the individual the lesser of:

(a) the amount stated in the release authority; and

(b) the sum of the

maximum available release amounts for each

superannuation interest held by the superannuation provider

for the individual in

superannuation plans.

Note 1:

Subsection 288-95(3) provides for an administrative penalty for

failing to comply with this section.

Note 2:

For the taxation treatment of the payment, see section 96-60.

33 At the end of section 96-20 in Schedule 1

Add:

(3) Despite paragraph (1A)(b), the

maximum available release

amount for a

defined benefit interest is not to be included in the

sum worked out under that paragraph.

34 Section 96-25 in Schedule 1 (heading)

Repeal the heading, substitute:

96-25 Voluntary compliance with a release authority relating to

voluntary release interests and defined benefit interests

35 Subsection 96-25(1) in Schedule 1

Omit "that has been".

36 Subsection 96-25(2) in Schedule 1

Repeal the subsection, substitute:

Excess non-concessional superannuation contributions tax reforms Schedule 1

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(2) A

superannuation provider issued with a release authority under

section 96-12 may, within 21 days after the release authority is

issued (or a further period allowed by the Commissioner), pay to

the individual the lesser of:

(a) the amount stated in the release authority; and

(b) the sum of the

maximum available release amounts for each

defined benefit interest held by the superannuation provider

for the individual in

superannuation plans.

(3) For the purposes of paragraph (1)(a) or (2)(a), reduce the amount

mentioned in that paragraph by any amount the provider pays

under section 96-20 in relation to the release authority.

37 Subsection 96-35(1) in Schedule 1

Omit "that has been".

38 Subsection 96-35(1) in Schedule 1

After "section 96-10", insert "or 96-12".

39 Paragraph 96-35(2)(a) in Schedule 1

After "section 96-10", insert "or 96-12".

40 Subsection 96-35(3) in Schedule 1

Repeal the subsection, substitute:

(3) A notice under this section must be given in the

approved form:

(a) within 7 days after the release authority is issued, if the

release authority was issued under section 96-10; or

(b) within 21 days after the release authority is issued (or a

further period allowed by the Commissioner), if the release

authority was issued under section 96-12.

Note:

Subsection 286-75(1) provides for an administrative penalty for

failing to comply with this section.

41 Section 96-40 in Schedule 1

Repeal the section, substitute:

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96-40 Notifying individual--unsuccessful release attempt

(1) The Commissioner must notify an individual if, in relation to the

individual's election under section 96-5, the Commissioner:

(a) receives a notice from a

superannuation provider under

subsection 96-35(2); or

(b) does not receive a payment from a superannuation provider

of the full amount stated in a release authority within the time

mentioned in subsection 96-20(1) or 96-25(1).

(2) The Commissioner must notify an individual if, in relation to the

individual's election under paragraph 96-7(1)(a):

(a) the Commissioner receives a notice from a

superannuation

provider under subsection 96-35(2); or

(b) the individual does not receive a payment from a

superannuation provider of the full amount stated in a release

authority within the time mentioned in subsection 96-20(1A)

or 96-25(2).

(3) A notice under subsection (1) or (2) must:

(a) be in writing; and

(b) identify the

superannuation provider; and

was not paid within the applicable time.

96-42 Notifying individual--successful releases under section 96-12

(1) A

superannuation provider issued with a release authority under

section 96-12 must notify an individual of a payment made to the

individual in accordance with the release authority and this

Subdivision.

(2) The notice must be given in the

approved form within:

(a) 21 days after the release authority is issued; or

(b) a further period allowed by the Commissioner.

Note:

Subsection 286-75(2AA) provides an administrative penalty for

failing to comply with this section.

42 Section 96-60 in Schedule 1 (note)

Repeal the note, substitute:

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2014

Note:

The income tax treatment of released amounts is also affected by

Subdivision 292-B, and sections 303-15 and 303-17, of that Act.

43 Division 97 in Schedule 1 (heading)

Repeal the heading, substitute:

Division 97--Excess contributions determinations

44 At the end of Division 97 in Schedule 1

Add:

Subdivision 97-B--Excess non-concessional contributions

determinations

Guide to Subdivision 97-B

97-20 What this Subdivision is about

The Commissioner must give you a determination stating:

(a)

the amount by which your non-concessional

contributions exceed your non-concessional

contributions cap; and

(b)

a proxy amount for your associated earnings on this

excess; and

(c)

the total amount that can be released from your

superannuation interests in relation to this excess and

those earnings.

Table of sections

Operative provisions

97-25

Excess non-concessional contributions determinations

97-30

Associated earnings

97-35

Review

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Operative provisions

97-25 Excess non-concessional contributions determinations

(1) If your

non-concessional contributions for a

financial year (the

contributions year) exceed your

non-concessional contributions

cap for the contributions year, the Commissioner must make a

written determination stating:

(a) the amount of the excess; and

(b) the amount of your associated earnings worked out under

section 97-30; and

Amount of your

Amount of the excess

0.85

associated earnings

(2) A determination under this section is an excess non-concessional

contributions determination.

(3) The Commissioner may amend a determination at any time.

(4) Notice of the determination may be included in any other notice

given to you by the Commissioner.

(5) Notice of a determination given by the Commissioner under this

section is prima facie evidence of the matters stated in the notice.

97-30 Associated earnings

(1) You are taken to have associated earnings equal to the sum

(rounded down to the nearest dollar) of the amounts worked out

under the following formula for each of the days during the period:

(a) starting on the first day of the contributions year; and

(b) ending on the day the Commissioner makes the first

excess

non-concessional contributions determination you receive for

the contributions year.

Proxy rate

Excess

Sum of earlier daily proxy amounts

where:

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excess means the amount of the excess referred to in

paragraph 97-25(1)(a).

proxy rate means the lower of:

(a) the rate worked out under subsection 8AAD(1) for the first

day of that period as if the base interest rate (within the

meaning of subsection 8AAD(2)) for that day were the

average of the base interest rates for each of the days of the

contributions year; and

(b) a rate determined under subsection (2) for the contributions

year.

sum of earlier daily proxy amounts means the sum of the amounts

worked out under the formula for each of the earlier days (if any)

during that period.

Note:

Any excess non-concessional contributions determination you receive

after the first one for the contributions year is an amended

determination.

(2) The Minister may, by legislative instrument, determine a rate for a

specified

financial year.

97-35 Review

If you are dissatisfied with an

excess non-concessional

contributions determination made in relation to you, you may

object against the determination in the manner set out in Part IVC.

45 Subsection 250-10(2) in Schedule 1 (table item 135R)

Omit "concessional", substitute "superannuation".

46 After subsection 286-75(2) in Schedule 1

Insert:

(2AA) You are also liable to an administrative penalty if:

(a) you are required under section 96-42 (releasing

superannuation) to give a notice to an entity (other than the

Commissioner) in the

approved form by a particular day;

and

(b) you do not give the notice in the approved form to the entity

by that day.

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47 Section 288-90 in Schedule 1

Omit "paragraph 292-405(1)(b)", substitute "subsection 292-405(1)".

48 Subsection 288-95(3) in Schedule 1

Omit "concessional", substitute "superannuation".

49 Application of amendments

The amendments made by this Schedule apply in relation to

non-concessional contributions for the 2013-14 financial year and later

financial years.

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Schedule 2

--Transferring tax investigation

function to Inspector-General of

Taxation

Part 1

--Main amendments

Inspector-General of Taxation Act 2003

1 Paragraph 3(a)

Omit "the tax laws for the benefit of all taxpayers", substitute "taxation

laws for the benefit of all taxpayers, tax practitioners and other entities".

2 Paragraph 3(b)

Omit "the tax laws", substitute "taxation laws".

3 Paragraph 3(c)

Repeal the paragraph, substitute:

entities about the administration of taxation laws; and

(d) investigate administrative action taken under taxation laws,

including systemic issues, that affect taxpayers, tax

practitioners or other entities.

4 Section 4

Insert:

ATO official means:

(a) the Commissioner; or

(b) a Second Commissioner of Taxation; or

(d) a person engaged under the Public Service Act 1999, or an

employee or officer of an authority of the Commonwealth,

performing duties in the Australian Taxation Office; or

(e) a person engaged on behalf of the Commonwealth by another

ATO official to provide services related to the administration

of taxation laws; or

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(f) a person who:

(i) is a member of a body established for the sole purpose

of assisting the Commissioner in the administration of

an aspect of taxation laws; and

(ii) receives, or is entitled to receive, remuneration (but not

merely allowances) from the Commonwealth in respect

of his or her membership of the body.

Commissioner means the Commissioner of Taxation.

entity has the same meaning as in the Income Tax Assessment Act

1997.

investigation into a complaint means an investigation under

paragraph 7(1)(a).

investigation into a systemic issue means an investigation under

paragraph 7(1)(c) or (d).

5 Section 4 (definition of review)

Repeal the definition.

6 Section 4

Insert:

tax administration action means action that the Inspector-General

can investigate under paragraph 7(1)(a) or (b).

taxation law has the same meaning as in the Income Tax

Assessment Act 1997.

tax file number has the same meaning as in the Income Tax

Assessment Act 1997.

7 Section 4 (definition of tax law)

Repeal the definition.

8 Section 4 (definition of tax official)

Repeal the definition, substitute:

tax official means:

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(a) an ATO official; or

(b) a Board member of the Tax Practitioners Board; or

described in section 60-80 of the Tax Agent Services Act

2009; or

(d) a person engaged on behalf of the Commonwealth by another

tax official (other than an ATO official) to provide services

related to the administration of taxation laws; or

(e) a person who:

(i) is a member of a body established for the sole purpose

of assisting the Tax Practitioners Board in the

administration of an aspect of taxation laws; and

(ii) receives, or is entitled to receive, remuneration (but not

merely allowances) from the Commonwealth in respect

of his or her membership of the body.

9 Section 4 (definition of taxpayer)

Omit "tax law", substitute "taxation law".

10 Section 4

Insert:

Tax Practitioners Board means the Tax Practitioners Board

established by section 60-5 of the Tax Agent Services Act 2009.

11 Divisions 2, 3 and 4 of Part 2

Repeal the Divisions, substitute:

Division 2--Functions of the Inspector-General

7 Functions of the Inspector-General

(1) The functions of the Inspector-General are as follows:

(a) to investigate action affecting a particular entity that:

(i) is taken by a tax official; and

(ii) relates to administrative matters under a taxation law;

and

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(iii) is the subject of a complaint by that entity to the

Inspector-General;

(b) to investigate other action that:

(i) is taken by a tax official; and

(ii) relates to administrative matters under a taxation law;

Office, or Tax Practitioners Board, to administer taxation

laws, including systems for dealing or communicating:

(i) with the public generally; or

(ii) with particular people or organisations;

in relation to administrative matters under those laws;

(d) to investigate systems established by taxation laws, but only

to the extent that the systems deal with administrative

matters;

(e) to investigate action that is the subject of a part of a

complaint:

(i) transferred to the Inspector-General by the Ombudsman

under paragraph 6D(4)(b) of the Ombudsman Act 1976;

(ii) that the Ombudsman advises, under paragraph 10(1)(b)

of this Act, does not need to be transferred under

subsection 10(1) of this Act;

(f) to report on those investigations.

Note:

Paragraphs (a) and (b) can cover action under a taxation law, and

action relating to action under a taxation law.

Example: A taxpayer seeks compensation under an administrative scheme

because of action by a tax official during the course of an audit that

caused the taxpayer detriment. The Inspector-General can investigate

the action that caused the detriment, and any action by a tax official

under the scheme.

(2) However, these functions do not include investigating:

(a) rules imposing or creating an obligation to pay an amount

under a taxation law; and

(b) rules dealing with the quantification of such an amount.

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8 Conducting investigations on Inspector-General's own initiative

(1) The Inspector-General may conduct an investigation under

paragraph 7(1)(b), (c) or (d) on his or her own initiative.

Note:

For example, the Inspector-General may conduct an investigation into

a systemic issue that has been drawn to his or her attention by

taxpayers, tax practitioners, the Auditor-General or the Ombudsman.

(2) The Inspector-General must conduct an investigation under

paragraph 7(1)(c) or (d) if so directed by the Minister.

(3) The Inspector-General may be requested to conduct an

investigation under paragraph 7(1)(c) or (d) by:

(a) the Minister; or

(b) the Commissioner or the Tax Practitioners Board; or

Parliament; or

(d) a resolution of a Committee of either House, or of both

Houses, of the Parliament.

However, the Inspector-General is not required to comply with the

request.

9 Discretion not to investigate certain complaints

The Inspector-General may, in his or her discretion:

(a) decide not to conduct an investigation into a complaint; or

(b) if he or she has started such an investigation--decide not to

continue investigating the action complained about;

if the Inspector-General is of the opinion that:

good faith; or

(d) the complainant does not have a sufficient interest in the

subject matter of the complaint; or

(e) an investigation, or further investigation, of the action is not

warranted having regard to all the circumstances; or

(f) the complainant has not yet raised the complaint with the

Commissioner or the Tax Practitioners Board (as applicable);

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(g) the action came to the complainant's knowledge more than

12 months before the complaint was made; or

(h) the complainant has not exercised a right to cause the action

to which the complaint relates to be reviewed by a court or

by a tribunal constituted by or under a law of the

Commonwealth.

10 Transferring complaints to the Ombudsman

(1) The Inspector-General must transfer the following to the

Ombudsman:

(a) a complaint made to the Inspector-General that is wholly

about action other than tax administration action, unless the

Ombudsman advises otherwise;

(b) if part of a complaint made to the Inspector-General is not

about tax administration action--that part of the complaint,

unless the Ombudsman advises otherwise.

(2) For a complaint made to the Inspector-General that is only partly

about tax administration action, the Inspector-General:

(a) must consult the Ombudsman about the complaint or about

complaints of that kind; and

(b) may transfer to the Ombudsman the part of the complaint that

is about tax administration action if the Inspector-General is

satisfied that the whole complaint could be more

appropriately or effectively dealt with by the Ombudsman.

(3) The Inspector-General must, for each complaint (or part of a

complaint) transferred to the Ombudsman:

(a) notify the complainant in writing of that transfer; and

(b) give the Ombudsman any related information or documents

(other than tax file numbers) that are:

(i) in the Inspector-General's possession; or

(ii) under the Inspector-General's control.

(4) For the purposes of the Ombudsman Act 1976 (other than

subsection 6D(2), (3) or (4) of that Act), a complaint (or part of a

complaint) transferred under this section is taken to be a complaint

made to the Ombudsman under that Act.

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Note:

A similar provision for transferring to the Inspector-General

complaints made to the Ombudsman is contained in section 6D of the

Ombudsman Act 1976. Subsection 6D(6) of that Act deems transferred

complaints to be complaints made to the Inspector-General under this

Act.

(5) This section does not apply to a complaint if:

(a) the Inspector-General transfers the complaint under

subsections 6(9) and (10), or section 6C, of the Ombudsman

Act 1976; or

(b) subsection 6(17) of that Act applies in relation to the

complaint.

(Each of the above provisions of the Ombudsman Act 1976 is that

provision as it applies because of section 15 of this Act).

Division 3--Powers and duties of the Inspector-General

15 Certain provisions of the Ombudsman Act 1976 apply

Each of the following provisions of the Ombudsman Act 1976 also

applies in relation to the Inspector-General with the modifications

set out in the following table:

(a) subsections 3(1), to the extent that it provides for the

definitions of Agency Head, authorized person,

Commonwealth service provider, disclosable conduct and

law enforcement agency;

(b) subsections 3(2) to (6) and subsection 3(7);

(d) subsections 5(2), (3) and (3A);

(e) section 5A;

(f) subsections 6(5), (9) to (11) and (16) to (19);

(g) sections 6C, 7 and 7A;

(h) section 8, other than paragraphs (7A)(b) and (10)(ba) to (d)

and subsections (8), (9), (10B), (10C) and (12);

(i) sections 9 to 19, other than subsections 16(4) and (5);

(j) sections 35AA to 37.

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How each of those provisions applies in relation to the Inspector-General

Item

The provision applies as if a

reference in that provision to:

were a reference to:

the Ombudsman

the Inspector-General

an investigation under the

Ombudsman Act 1976

an investigation under this Act

a complaint under the Ombudsman

Act 1976

a complaint under this Act

any of the following:

(a) a Department;

(b) a prescribed authority;

authority

the entity identified under section 16

of this Act

another person who is not a

Department or prescribed authority

another person who is not:

(a) a Department of State; or

(b) an authority of the

Commonwealth

either of the following:

(a) principal officer of a Department

or prescribed authority;

(b) Secretary of a Department

either of the following:

(a) Commissioner;

(b) Chair of the Tax Practitioners

Board

an officer of a Department or

prescribed authority (that is not a

reference to the principal officer)

tax official

officer within the meaning of

section 35 of the Ombudsman Act

1976

either of the following:

(a) the Inspector-General;

(b) a member of the

Inspector-General's staff

paragraph 5(1)(b) of the

Ombudsman Act 1976

paragraph 7(1)(b) of this Act

enactment

either of the following:

(a) Act;

(b) instrument made under an Act

in the Ombudsman Act 1976

either of the following:

(a) in the Ombudsman Act 1976;

(b) in this Act.

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How each of those provisions applies in relation to the Inspector-General

Item

The provision applies as if a

reference in that provision to:

were a reference to:

any of the following:

(a) the Minister administering the

Ombudsman Act 1976;

(b) the Minister administering the

Department;

(d) the Prime Minister

the Minister administering this Act

either of the following:

(a) a report under Division 2 of

Part II of the Ombudsman Act

1976;

(b) a report under that Act

either of the following:

(a) a report under that Act;

(b) a report under this Act

section 35 (other than subsection (5)

of that section)

section 37 of this Act

Note:

The above references in provisions of the Ombudsman Act 1976 are

described in substance, rather than form. For example, table item 2

will apply to the phrase "an investigation under this Act" wherever it

appears in any of those provisions.

16 References to a Department or a prescribed authority

(1) For the purposes of table item 4 in section 15, if the relevant

investigation relates to action taken by an ATO official or to the

Australian Taxation Office, the reference described in that item

applies as if it were a reference to the Commissioner, or the

Australian Taxation Office, (as the context requires).

(2) For other investigations under this Act, the reference described in

table item 4 in section 15 applies as if it were a reference to the

Tax Practitioners Board.

17 Further modifications to how some of those provisions apply

(1) Despite subsection 8(2) of the Ombudsman Act 1976 (as it applies

because of section 15 of this Act), an investigation into a systemic

issue need not be conducted in private.

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(2) Despite paragraph 9(1)(a) of the Ombudsman Act 1976 (as it

applies because of section 15 of this Act), a person may furnish

information under that paragraph in a way otherwise than by

writing signed by the person.

(3) Despite section 15, 16 or 17 of the Ombudsman Act 1976 (as it

applies because of section 15 of this Act), the Inspector-General

must not recommend changes to taxation laws in a report under

that section.

Note:

The Inspector-General can include such recommendations in reports

under section 18.

(4) Despite subsection 36(1) of the Ombudsman Act 1976 (as it applies

because of section 15 of this Act), the penalty set out at the foot of

that subsection applies as if it were imprisonment for 6 months in

the case of a refusal or failure relating to an investigation into a

systemic issue.

18 Reports recommending improvements to taxation laws

(1) After completing an investigation under this Act, the

Inspector-General may make a written report to the Minister:

(a) identifying a taxation law under which the action being

investigated was taken; and

(b) setting out any recommendations for how that taxation law

might be improved; and

The report may set out other matters.

(2) The Minister must cause a copy of the report to be made publicly

available before the end of the 25th sitting day of the House of

Representatives after the day the Minister receives the report.

12 Part 4 (heading)

Repeal the heading, substitute:

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Part 4--Information management

Division 1--Secrecy

13 Subsection 37(1) (paragraph (b) of the definition of

protected document)

Omit "a taxpayer's", substitute "an entity's".

14 Subsection 37(1) (paragraph (b) of the definition of

protected information)

Omit "a taxpayer's", substitute "an entity's".

15 After section 37

Insert:

Division 2--Powers relating to tax file numbers

37B Requesting a person's tax file number

(1) The Inspector-General may request, but not require, a person

making a complaint covered by paragraph 7(1)(a) to quote the

person's tax file number to the Inspector-General.

(2) The Inspector-General may provide the person's tax file number to

the Commissioner for the purposes of an investigation by the

Inspector-General into the complaint.

37C Investigations under this Act

The Commissioner may quote a person's tax file number to the

Inspector-General for the purposes of an investigation by the

Inspector-General into a complaint by the person that is covered by

paragraph 7(1)(a).

16 Before section 38

Insert:

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Part 5--Other matters

17 Section 38

Omit "a review", substitute "an investigation".

18 Paragraph 38(c)

Omit "Commissioner of Taxation", substitute "Commissioner".

19 Subparagraph 39(1)(e)(i)

Omit "section 14 or 15", substitute "section 9 of the Ombudsman Act

1976 (as it applies because of section 15 of this Act)".

20 Subparagraphs 39(1)(e)(ii), (iii) and (iv)

Omit "section 14 or 15", substitute "that section".

21 Subparagraphs 39(1)(e)(v) and (vi)

Repeal the subparagraphs, substitute:

(v) is the subject of a report under this Act, or the

Ombudsman Act 1976 (as it applies because of

section 15 of this Act), that relates to an investigation

under this Act.

22 Subparagraph 39(2)(c)(i)

Omit "section 14 or 15", substitute "section 9 of the Ombudsman Act

1976 (as it applies because of section 15 of this Act)".

23 Subparagraphs 39(2)(c)(ii), (iii) and (iv)

Omit "section 14 or 15", substitute "that section".

24 Subparagraphs 39(2)(c)(v) and (vi)

Repeal the subparagraphs, substitute:

(v) is the subject of a report under this Act, or the

Ombudsman Act 1976 (as it applies because of

section 15 of this Act), that relates to an investigation

under this Act.

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25 Subsection 40(2)

After "this Act", insert "or the Ombudsman Act 1976 (as it applies

because of section 15 of this Act)".

26 Section 41

Before "The", insert "(1)".

27 Section 41 (note)

Repeal the note.

28 At the end of section 41

Add:

(2) The report must also include:

(a) the number of complaints received by the Inspector-General

under this Act during the period; and

(b) the number of investigations under paragraph 7(1)(a) or (b):

(i) started during the period; and

(ii) completed during the period; and

(i) started during that period; and

(ii) completed during that period; and

(d) the number of times when the Inspector-General has made a

requirement of a person under section 9 of the Ombudsman

Act 1976 (as it applies because of section 15 of this Act)

during the period; and

(e) details of the circumstances in which each of those

requirements under section 9 of that Act was made.

29 Section 42

Repeal the section, substitute:

42 Delegation of certain powers by the Inspector-General

(1) The Inspector-General may, in writing, delegate any of the

following powers to a member of the Inspector-General's staff:

(a) the Inspector-General's powers under the Ombudsman Act

1976 (as it applies because of section 15 of this Act), except

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for the Inspector-General's powers under sections 15 to 19 of

that Act;

(b) the Inspector-General's powers under subsections 36(3) and

(4) of this Act to make arrangements and engage consultants

(including determining the terms and conditions of their

engagement).

(2) In exercising powers under a delegation, a delegate must comply

with any written directions of the Inspector-General.

30 Subsection 43(2)

Omit "section 13, 14, 15 or 25", substitute "the Ombudsman Act 1976

(as it applies because of section 15 of this Act)".

31 Section 44

Repeal the section.

32 Schedule 1

Repeal the Schedule.

Ombudsman Act 1976

33 Subsection 3(1)

Insert:

taxation law has the same meaning as in the Income Tax

Assessment Act 1997.

34 Subsection 4(3)

Repeal the subsection.

35 After section 6C

Insert:

Transferring tax investigation function to Inspector-General of Taxation Schedule 2

Main amendments Part 1

No. , 2014

Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill

2014

6D Tax administration matters and transfer of complaints to

Inspector-General of Taxation

Ombudsman not to investigate action relating to tax administration

(1) The Ombudsman must not investigate action that the

Inspector-General of Taxation can investigate under

paragraph 7(1)(a) or (b) of the Inspector-General of Taxation Act

2003 (tax administration action).

Exception--transferred complaints

(2) However, the Ombudsman may investigate tax administration

action that:

(a) is the subject of a part of a complaint transferred to the

Ombudsman under paragraph 10(2)(b) of the

Inspector-General of Taxation Act 2003; or

(b) is the subject of a part of a complaint that the

Inspector-General of Taxation advises, under

paragraph (3)(b) of this section, does not need to be

transferred under subsection (3); or

(i) the Public Interest Disclosure Act 2013; or

(ii) the Freedom of Information Act 1982; or

(iii) another Act (other than a taxation law) prescribed by

regulations made for the purposes of this paragraph.

Note:

Subsection (1) does not apply to any part of a complaint that is not in

respect of tax administration action.

Transferring complaints to the Inspector-General of Taxation

(3) The Ombudsman must transfer the following to the

Inspector-General of Taxation:

(a) a complaint made to the Ombudsman that is wholly in

respect of tax administration action;

(b) if part of a complaint made to the Ombudsman is in respect

of tax administration action--that part of the complaint,

unless the Inspector-General advises otherwise.

Schedule 2 Transferring tax investigation function to Inspector-General of Taxation

Part 1 Main amendments

Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill

2014

No. , 2014

(4) For a complaint made to the Ombudsman that is only partly in

respect of tax administration action, the Ombudsman:

(a) must consult the Inspector-General of Taxation about the

complaint or about complaints of that kind; and

(b) may transfer to the Inspector-General the part of the

complaint that is not in respect of tax administration action if

the Ombudsman is satisfied that the whole complaint could

be more appropriately or effectively dealt with by the

Inspector-General of Taxation.

(5) The Ombudsman must, for each complaint (or part of a complaint)

transferred to the Inspector-General of Taxation:

(a) notify the complainant in writing of that transfer; and

(b) give the Inspector-General of Taxation any related

information or documents that are:

(i) in the Ombudsman's possession; or

(ii) under the Ombudsman's control.

(6) For the purposes of the Inspector-General of Taxation Act 2003

(other than subsection 10(1) or (2) of that Act), a complaint (or part

of a complaint) transferred under this section is taken to be a

complaint made to the Inspector-General of Taxation under that

Act.

Note:

A similar provision for transferring to the Ombudsman complaints

made to the Inspector-General is contained in section 10 of the

Inspector-General of Taxation Act 2003. Subsection 10(4) of that Act

deems transferred complaints to be complaints made to the

Ombudsman under this Act.

Transferring tax investigation function to Inspector-General of Taxation Schedule 2

Other amendments Part 2

No. , 2014

Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill

2014

Part 2

--Other amendments

Income Tax Assessment Act 1936

36 At the end of section 202

Add:

; and (r) to facilitate investigations under the Inspector-General of

Taxation Act 2003 (and provisions of the Ombudsman Act

1976 to the extent that they are applied by the

Inspector-General of Taxation Act 2003).

Tax Agent Services Act 2009

37 Before subsection 70-40(3)

Insert:

Disclosures to the Commissioner

38 After subsection 70-40(3A)

Insert:

Disclosures to the Inspector-General of Taxation

(3B) Subsection 70-35(1) does not apply if the record or disclosure is to

the Inspector-General of Taxation and is for the purpose of

investigating or reporting under, or otherwise administering:

(a) the Inspector-General of Taxation Act 2003; or

(b) provisions of the Ombudsman Act 1976, to the extent that

they are applied by the Inspector-General of Taxation Act

2003.

Note:

A defendant bears an evidential burden in relation to the matters in

subsection (3B): see subsection 13.3(3) of the Criminal Code.

Taxation Administration Act 1953

39 Paragraph 8WA(1AA)(b)

Omit "or (m)", substitute ", (m) or (r)".

Schedule 2 Transferring tax investigation function to Inspector-General of Taxation

Part 2 Other amendments

Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill

2014

No. , 2014

40 Paragraph 8WB(1A)(a)

Omit "or (q)", substitute ", (q) or (r)".

41 Paragraph 8WB(1A)(b)

Omit "or (q)", substitute ", (q) or (r)".

42 Section 355-1 in Schedule 1 (note)

Omit:

section 15 of the Inspector-General of Taxation Act 2003;

43 Subsection 355-65(5) in Schedule 1 (at the end of the

table)

Add:

the Inspector-General of

Taxation

is for the purpose of investigating or

reporting under, or otherwise

administering:

(a) the Inspector-General of Taxation

Act 2003; or

(b) provisions of the Ombudsman Act

1976, to the extent that they are

applied by the Inspector-General of

Taxation Act 2003.

Transferring tax investigation function to Inspector-General of Taxation Schedule 2

Application and transitional provisions Part 3

No. , 2014

Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill

2014

Part 3

--Application and transitional provisions

44 Application of amendments

(1)

The amendments made by this Schedule (other than item 43) apply in

relation to:

(a) complaints made; or

(b) investigations or reviews conducted on an entity's own

initiative that start;

at or after the commencement of this Schedule.

(2)

The amendment made by item 43 applies in relation to records and

disclosures of information made on or after the commencement of that

item (regardless of when the information was acquired).

45 Transitional

--expenses for attending before

Inspector-General

(1)

This item applies to regulations under the Ombudsman Act 1976 to the

extent that those regulations provide for the payment of fees and

allowances to persons for their expenses for attending, or appearing as a

witness, before the Ombudsman or the Ombudsman's delegate.

(2)

At and after the commencement of this Schedule, those regulations also

apply as if:

(a) they were regulations under the Inspector-General of

Taxation Act 2003; and

(b) references in those regulations to the Ombudsman were

references to the Inspector-General.

(3)

Subitem (2) does not prevent the Governor-General from making

regulations under the Inspector-General of Taxation Act 2003 providing

for payments for attending before the Inspector-General or a member of

the Inspector-General's staff.

46 Transitional

--investigating complaints similar to those

made before commencement

The Inspector-General may, in his or her discretion:

Schedule 2 Transferring tax investigation function to Inspector-General of Taxation

Part 3 Application and transitional provisions

Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill

2014

No. , 2014

(a) decide not to conduct an investigation into a complaint made

at or after the commencement of this Schedule about

particular action; or

(b) if he or she has started such an investigation--decide not to

continue investigating that action;

if the Inspector-General is of the opinion that, before that

commencement, the complainant had already complained about that

action to the Ombudsman.

CGT exemption for compensation and insurance Schedule 3

No. , 2014

Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill

2014

Schedule 3

--CGT exemption for

compensation and insurance

Income Tax Assessment Act 1997

1 After paragraph 104-71(1)(d)

Insert:

(da) a payment to which paragraph 118-37(1)(ba) applies (about

compensation paid through a trust); or

2 Before paragraph 104-71(1)(e)

Insert:

(db) a payment to which subsection 118-300(1A) applies (about

insurance and annuity payments paid through a trust); or

3 Paragraphs 118-37(1)(a) and (b)

Repeal the paragraphs, substitute:

(a) compensation or damages you receive for:

(i) any wrong or injury you suffer in your occupation; or

(ii) any wrong, injury or illness you or your

relative suffers

personally;

(b) compensation or damages you receive as the trustee of a trust

(other than a trust that is a

complying superannuation entity)

for:

(i) any wrong or injury a beneficiary of the trust suffers in

his or her occupation; or

(ii) any wrong, injury or illness a beneficiary of the trust, or

the beneficiary's relative, suffers personally;

(ba) a

CGT asset you receive, as a beneficiary of a trust, from the

trustee of the trust to the extent that the CGT asset is

attributable to compensation or damages that the trustee

receives as described in paragraph (b) for:

(i) any wrong or injury you suffer in your occupation; or

(ii) any wrong, injury or illness you or your relative suffers

personally;

Schedule 3 CGT exemption for compensation and insurance

Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill

2014

No. , 2014

4 Subsection 118-300(1) (table item 3)

Repeal the item, substitute:

A policy of insurance on the life

of an individual or an

annuity

instrument

the original owner of the policy or

instrument (other than the trustee of a

complying superannuation entity)

5 Subsection 118-300(1) (at the end of the table)

Add:

A policy of insurance against an

individual suffering an illness or

injury

the trustee of a

complying

superannuation entity for the income

year in which the

CGT event

happened

6 After subsection 118-300(1)

Insert:

Payment to trust beneficiary (or representative) if trustee owns the

policy or instrument

(1A) A

capital gain or

capital loss you make from a

CGT event

happening because you receive a

CGT asset from the trustee of a

trust is disregarded if:

(a) you receive the CGT asset as:

(i) a beneficiary of the trust; or

(ii) a

legal personal representative of a beneficiary of the

trust; and

(b) the CGT asset is attributable to another CGT event and CGT

asset to which table item 3 in subsection (1) applies for the

trustee.

7 Subsection 295-85(4) (table item 10)

Repeal the item, substitute:

Subsection 118-300(1),

for general insurance

policies covered by table

item 2 in that subsection

General insurance policies for property

Schedule 4 Providing certainty for superannuation fund mergers

Part 1 Main amendments

Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill

2014

No. , 2014

Schedule 4

--Providing certainty for

superannuation fund mergers

Part 1

--Main amendments

Income Tax Assessment Act 1997

1 After section 306-10

Insert:

306-12 Involuntary roll-over superannuation benefit

roll-over superannuation benefit is an involuntary roll-over

superannuation benefit if it is:

(a) a payment transferring a

superannuation interest of:

(i) a member of a

superannuation fund; or

(ii) a depositor with an

approved deposit fund; or

(iii) a holder of an

RSA;

to a

successor fund (other than a

self managed

superannuation fund) without the consent of the member,

depositor or holder; or

(b) a payment transferring an

accrued default amount of a

member (within the meaning of the Superannuation Industry

(Supervision) Act 1993) of a

complying superannuation fund

to another complying superannuation fund:

(i) as a result of an election under paragraph 29SAA(1)(b)

of that Act; or

(ii) under section 388 of that Act;

if:

(iii) that member becomes a member (within the meaning of

that Act) of the other fund immediately after the

transfer; and

(iv) the transfer happens during the period beginning on

1 July 2015 and ending on 1 July 2017; or

beneficial interest in an eligible rollover fund (within the

meaning of the Superannuation Industry (Supervision) Act

Providing certainty for superannuation fund mergers Schedule 4

Main amendments Part 1

No. , 2014

Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill

2014

1993) in accordance with an application on behalf of that

person under section 243 of that Act.

2 At the end of subsection 307-125(3)

Add:

; (d) despite paragraphs (a) and (b), if:

(i) the superannuation benefit is an

involuntary roll-over

superannuation benefit paid from a superannuation

interest; and

(ii) that interest was supporting a superannuation income

stream immediately before that benefit was paid;

when that superannuation income stream commenced.

3 After subparagraph 307-220(2)(a)(i)

Insert:

(ia) disregard the

tax free component of an

involuntary

roll-over superannuation benefit paid into the interest

from another superannuation interest (the earlier

interest) (other than an earlier interest that was

supporting a

superannuation income stream

immediately before that benefit was paid); and

(ib) if subparagraph (ia) applies--include as a contribution

an amount equal to the amount referred to in

subsection (5); and

4 At the end of section 307-220

Add:

(5) For the purposes of subparagraph (2)(a)(ib), the amount is:

(a) if the

involuntary roll-over superannuation benefit is

covered by paragraph 306-12(a) or (c)--the sum of the

contributions segment, and crystallised segment, of the

earlier interest immediately before the benefit was paid; or

(b) if the benefit is covered by paragraph 306-12(b)--the

proportion of that sum that the benefit was to the

value of

the earlier interest immediately before the benefit was paid.

Schedule 4 Providing certainty for superannuation fund mergers

Part 1 Main amendments

Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill

2014

No. , 2014

5 Subsection 995-1(1)

Insert:

involuntary roll-over superannuation benefit has the meaning

given by section 306-12.

Income Tax (Transitional Provisions) Act 1997

6 At the end of subsection 307-125(1)

Add:

Note:

This section also applies to an income stream replacing an earlier one

because of an involuntary roll-over (see section 307-127).

7 After section 307-125

Insert:

307-127 Extension--income stream replacing an earlier one because

of an involuntary roll-over

(1) Section 307-125 also applies to a superannuation income stream

(the later income stream) if:

(a) the later income stream commenced using only the amount of

an involuntary roll-over superannuation benefit:

(i) covered by paragraph 306-12(a) of the Income Tax

Assessment Act 1997; and

(ii) paid from a superannuation interest (the earlier

interest); and

(b) immediately before that benefit was paid:

(i) the earlier interest was supporting another

superannuation income stream (the earlier income

stream); and

(ii) section 307-125 of this Act applied to the earlier income

stream because of subsection (1) of that section.

(2) Section 307-125 applies to the later income stream as if:

(a) references in that section to the later income stream (in

relation to a time, or event happening, before the payment of

that involuntary roll-over superannuation benefit) include

references to the earlier income stream; and

Providing certainty for superannuation fund mergers Schedule 4

Main amendments Part 1

No. , 2014

Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill

2014

(b) references in that section to the superannuation interest

supporting the later income stream (in relation to a time, or

event happening, before the payment of that benefit) include

references to the earlier interest.

Taxation Administration Act 1953

8 Paragraph 390-10(2)(b) in Schedule 1

Repeal the paragraph, substitute:

(b) unless the benefit is an

involuntary roll-over superannuation

benefit, give the individual in respect of whom the benefit is

paid a statement in relation to the benefit within 30 days after

the day on which the benefit is paid.

9 Application of amendments

The amendments made by this Part apply in relation to involuntary

roll-over superannuation benefits paid on or after 1 July 2015.

Schedule 4 Providing certainty for superannuation fund mergers

Part 2 Other amendments

Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill

2014

No. , 2014

Part 2

--Other amendments

Income Tax Assessment Act 1997

10 Paragraph 307-125(3)(c)

Omit "

superannuation income stream", substitute "superannuation

income stream".

11 Section 307-210

Before "The", insert "(1)".

12 Section 307-210 (note)

Repeal the note.

13 At the end of section 307-210

Add:

Tax free component reduces if a benefit is paid

(2) If a

superannuation benefit is paid from the

superannuation

interest:

(a) the

crystallised segment of the interest is reduced (but not

below zero) by an amount equal to the

tax free component

of the benefit; and

(b) if any of that amount remains, the

contributions segment of

the interest is reduced (but not below zero) by that remaining

amount.

Note:

This has the effect of reducing the interest's tax free component by the

amount of the benefit's tax free component.

14 Subsection 307-220(1)

Repeal the subsection, substitute:

(1) The contributions segment of a

superannuation interest is the total

amount of the contributions to the interest:

(a) that were made after 30 June 2007; and

Providing certainty for superannuation fund mergers Schedule 4

Other amendments Part 2

No. , 2014

Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill

2014

(b) to the extent that they have not been and will not be included

in the assessable income of the

superannuation provider in

relation to the

superannuation plan in which the interest is

held.

This section has effect subject to subsection 307-210(2).

Note:

This segment may be reduced if a superannuation benefit is paid from

the superannuation interest: see subsection 307-210(2).

15 Subsection 307-225(2)

Omit "so much of the

value of the interest as consists of the total of",

substitute "the total amount of".

16 At the end of subsection 307-225(2)

Add:

This section has effect subject to subsection 307-210(2).

Note:

This segment may be reduced if a superannuation benefit is paid from

the superannuation interest: see subsection 307-210(2).

17 Subsection 995-1(1) (definition of successor fund)

Repeal the definition, substitute:

successor fund, in relation to a transfer of a

superannuation

interest of:

(a) a member of a

superannuation fund; or

(b) a depositor with an

approved deposit fund; or

RSA;

means another superannuation fund, approved deposit fund or RSA

if the following conditions are met:

(d) that other fund or RSA confers on that member, depositor or

holder equivalent rights to the rights he or she had under the

first-mentioned fund or RSA in respect of the interest;

(e) the conferral of these equivalent rights was agreed, before the

transfer, between:

(i) the

superannuation provider of that other fund or RSA;

and

(ii) the superannuation provider of the first-mentioned fund

or RSA.

Schedule 5 Disclosing tax information relating to proceeds of crime orders

Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill

2014

No. , 2014

Schedule 5

--Disclosing tax information

relating to proceeds of crime orders

Taxation Administration Act 1953

1 Subsection 355-70(1) in Schedule 1 (table item 1, column

headed "and the record or disclosure ...", after

paragraph (c))

Insert:

; or (d) supporting or enforcing a proceeds of crime order.

2 Subsection 355-70(1) in Schedule 1 (table item 6, column

headed "and the record or disclosure ...", after

paragraph (c))

Insert:

; or (d) supporting or enforcing a proceeds of crime order.

3 Paragraph 355-70(5)(c) in Schedule 1

Repeal the paragraph, substitute:

(i) under a State law or Territory law; and

(ii) relating to unexplained wealth.

4 Application of amendments

The amendments made by this Schedule apply in relation to records and

disclosures of information made on or after the commencement of this

Schedule (regardless of when the information was acquired).

Exploration development incentive Schedule 6

Main amendments Part 1

No. , 2014

Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill

2014

Schedule 6

--Exploration development

incentive

Part 1

--Main amendments

Income Tax Assessment Act 1997

1 Section 67-23 (after table item 23)

Insert:

exploration development

incentive

the

tax offset available under

Subdivision 418-B

2 At the end of Part 3-45

Add:

Division 418--Exploration for minerals

Table of Subdivisions

Guide to Division 418

418-A Object of this Division

418-B Exploration development incentive tax offset

418-C Exploration development incentive franking credit

418-D Creating exploration credits

418-E

Issuing exploration credits

418-F

Excess exploration credits

Guide to Division 418

418-1 What this Division is about

Generally speaking, you are entitled to a tax offset for exploration

credits issued to you, but exploration credits issued to corporate tax

entities instead give rise to franking credits.

Schedule 6 Exploration development incentive

Part 1 Main amendments

Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill

2014

No. , 2014

For the 2015-16, 2016-17 or 2017-18 income year, a greenfields

minerals explorer can create, and then issue, exploration credits for

the explorer's greenfields minerals expenditure for the previous

income year. However, the total amount of exploration credits for

an income year is limited to the explorer's maximum exploration

credit amount.

The explorer is liable to pay excess exploration credit tax if the

explorer issues exploration credits in excess of that maximum

exploration credit amount.

Note:

Excess exploration credit tax is imposed by the Excess Exploration

Credit Tax Act 2014, and the amount of the tax is set out in that Act.

Subdivision 418-A--Object of this Division

Table of sections

418-5

Object of this Division

418-5 Object of this Division

The object of this Division is to encourage investment in minerals

exploration in Australia by allowing the benefit of losses from

minerals exploration to flow to shareholders who share in the risk

of the exploration.

Subdivision 418-B--Exploration development incentive tax

offset

Table of sections

Entitlement to exploration development incentive tax offset

418-10

Who is entitled to the tax offset--ordinary case

418-15

Who is entitled to the tax offset--life insurance company

418-20

Entitlement of member of a trust or partnership to a share of exploration

credits

Amount of exploration development incentive tax offset

418-25

The amount of the tax offset

418-30

Reduced amount of the tax offset for certain trusts

Exploration development incentive Schedule 6

Main amendments Part 1

No. , 2014

Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill

2014

Entitlement to exploration development incentive tax offset

418-10 Who is entitled to the tax offset--ordinary case

You are entitled to a

tax offset for an income year if:

(a) an

exploration credit is issued to you under

Subdivision 418-E for the income year; and

(b) you are not:

(i) a

corporate tax entity; or

(ii) a trust (other than a trust in relation to which some or all

of the liability of the trustee to tax is provided under

subsection 98(1) or (2) or 99(2) or (3) of the Income Tax

Assessment Act 1936); or

(iii) a partnership; or

(iv) an

exempt entity (other than an

exempt institution that

is eligible for a refund); and

income year.

418-15 Who is entitled to the tax offset--life insurance company

(1) An entity is entitled to a

tax offset for an income year if:

(a) the entity is a

life insurance company; and

(b) an

exploration credit is issued to the entity under

Subdivision 418-E for the income year; and

income year; and

(d) were the exploration credit to be a

franked distribution

made:

(i) by the same entity that issued the credit; and

(ii) in the same circumstances in which the credit was

issued;

the exploration credit would be a distribution to which

paragraph 207-110(1)(b) would apply.

(2) If:

(a) an

exploration credit is issued to a

life insurance company;

and

Schedule 6 Exploration development incentive

Part 1 Main amendments

Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill

2014

No. , 2014

(b) paragraph (1)(d) applies in relation to only part of the

exploration credit;

this Division applies as if that part of the exploration credit, and the

part of the exploration credit in relation to which that paragraph

does not apply, were 2 separate exploration credits issued to the

life insurance company.

418-20 Entitlement of member of a trust or partnership to a share of

exploration credits

Members taken to be issued with exploration credits

(1) If:

(a) you are a

member of a trust or partnership during the income

year; and

(b) an

exploration credit is issued to the trust or partnership

under Subdivision 418-E for the income year; and

corporate tax entity; and

(d) the trustee of the trust, or the partnership, determines that you

are entitled to a share of the exploration credits issued to the

trust or partnership for the income year; and

(e) the trustee of the trust, or the partnership, gives you a

statement, in accordance with subsection (4), informing you

of that entitlement;

you are taken, for the purposes of this Subdivision, to have been

issued with an exploration credit under Subdivision 418-E, for the

income year, of an amount equal to your share of the exploration

credits issued to the trust or partnership for the income year.

Effect of restrictions on distributions

(2) Despite subsection (1), you are not taken, under that subsection, to

have been issued with an

exploration credit under

Subdivision 418-E to the extent that, if the exploration credit

referred to in paragraph (1)(b) were a

franked distribution of the

same amount made:

(a) at the time of the determination referred to in

paragraph (1)(d); and

Exploration development incentive Schedule 6

Main amendments Part 1

No. , 2014

Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill

2014

(b) in relation to the interest, held by the trust or partnership, in

relation to which the exploration credit referred to in

paragraph (1)(b) is issued to the trust or partnership during

the income year;

the terms and conditions under which the trust or partnership

operates would not permit you to be paid the amount, or the

proportion, of the franked distribution that would reflect your

entitlement referred to in paragraph (1)(d).

Anti-avoidance

(3) Despite subsection (1), you are not taken, under that subsection, to

have been issued with an

exploration credit under

Subdivision 418-E to the extent that, if the exploration credit were

a distribution to you, from the trust or partnership, of a

franked

distribution that:

(a) was of the same amount as the amount of your share, referred

to in paragraph (1)(d), of the exploration credit referred to in

paragraph (1)(b); and

(b) was made:

(i) by the same entity that issued that exploration credit;

and

(ii) in relation to the same interest in that entity; and

(iii) in the same circumstances in which that exploration

credit was issued; and

(c)

flowed indirectly through one or more trusts or partnerships

that were the same as the one or more trusts or partnerships

that, apart from subparagraphs 418-10(b)(ii) and (iii), would

have been entitled to a

tax offset under this Subdivision in

relation to:

(i) that exploration credit; or

(ii) another exploration credit from which that exploration

credit is directly or indirectly derived;

you would not be entitled to a tax offset under Division 207 in

relation to the franked distribution.

Statements to members

(4) A statement referred to in paragraph (1)(e) must:

Schedule 6 Exploration development incentive

Part 1 Main amendments

Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill

2014

No. , 2014

(a) be in the

approved form; and

(b) be given to you on or before the due date:

(i) if the trust or partnership is an

investment body for

Part VA investments--for giving to the Commissioner

annual investment income report in respect of the

financial year corresponding to the income year; or

(ii) otherwise--for the trust or partnership to lodge its

income tax return for the income year.

Reports to the Commissioner

(5) A trust or partnership that has given one or more statements under

paragraph (1)(e) relating to

exploration credits for an income year

must give to the Commissioner, on or before the due date referred

to in paragraph (4)(b) in relation to that income year, a report that:

(a) relates to all the statements that the trust or partnership has

given under paragraph (1)(e) relating to exploration credits

for that income year; and

(b) is in the

approved form.

Amount of exploration development incentive tax offset

418-25 The amount of the tax offset

The amount of your

tax offset under this Subdivision for an

income year is the sum of:

(a) all the

exploration credits issued to you under

Subdivision 418-E; and

(b) all the exploration credits taken under section 418-20 to have

been issued to you;

for the income year.

418-30 Reduced amount of the tax offset for certain trusts

(1) If an entity is a trust in relation to which some, but not all, of the

liability of the trustee to tax is provided under subsection 98(1) or

(2) or 99(2) or (3) of the Income Tax Assessment Act 1936, the

amount of the entity's

tax offset under this Subdivision for an

income year is:

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Income taxed under

subsection 98(1) or (2)

or 99(2) or (3)

The amount of the entity's *tax

offset apart from this section

The *net income of the

trust for the income year

where:

income taxed under subsection 98(1) or (2) or 99(2) or (3) is the

amount of the

net income of the trust, for the income year, in

relation to which the trustee is liable to tax under subsection 98(1)

or (2) or 99(2) or (3) of the Income Tax Assessment Act 1936.

(2) If:

(a) an entity is a trust; and

(b) one or more

members of the trust are taken under

section 418-20 to have been issued with one or more

exploration credits for an income year;

the amount of the entity's

tax offset, under section 418-25 or

subsection (1) of this section, for the income year is reduced by the

sum of amounts of the exploration credits taken to be issued to

those members.

Subdivision 418-C--Exploration development incentive

franking credit

Table of sections

418-50

Exploration development incentive franking credit--ordinary case

418-55

Exploration development incentive franking credit--life insurance company

418-50 Exploration development incentive franking credit--

ordinary case

(1) A

franking credit arises in the

franking account of a

corporate

tax entity (other than a

life insurance company) if:

(a) an

exploration credit is issued to the entity under

Subdivision 418-E during an income year; and

(b) if the entity were not a corporate tax entity, the entity would

be entitled to a

tax offset under Subdivision 418-B in

relation to the exploration credit.

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(2) The amount of the

franking credit is the amount of the

tax offset

to which the entity would be entitled under Subdivision 418-B if:

(a) the entity were not a

corporate tax entity; and

(b) no other

exploration credits were issued to the entity during

the income year.

(3) The

franking credit arises at the same time the

exploration credit

is issued.

418-55 Exploration development incentive franking credit--life

insurance company

(1) A

franking credit arises in the

franking account of a

life

insurance company if:

(a) an

exploration credit is issued to the life insurance company

under Subdivision 418-E during an income year; and

(b) paragraph 418-15(1)(d) does not apply in relation to the

exploration credit; and

life insurance company would be entitled to a

tax offset

under Subdivision 418-B in relation to the exploration credit.

(2) The amount of the

franking credit is the amount of the

tax offset

to which the

life insurance company would be entitled under

Subdivision 418-B if no other

exploration credits were issued to

the life insurance company during the income year.

(3) The

franking credit arises at the same time the

exploration credit

is issued.

Subdivision 418-D--Creating exploration credits

Table of sections

418-70

Entities that may create exploration credits

418-75

Meaning of greenfields minerals explorer

418-80

Meaning of greenfields minerals expenditure

418-85

Exploration credits must not exceed maximum exploration credit amount

418-90

Modulation factors

418-95

Effect on tax losses of creating exploration credits

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418-70 Entities that may create exploration credits

(1) An entity may create exploration credits for an income year if:

(a) the entity was a

greenfields minerals explorer in the

previous income year; and

(b) on or before 30 September in the

financial year

corresponding to the income year, the entity has given to the

Commissioner, in the

approved form, a declaration stating:

(i) their estimated

tax loss for the previous income year;

and

(ii) their estimated

greenfields minerals expenditure, for

the previous income year.

(2) However, the entity cannot create the exploration credits:

(a) before the legislative instrument under section 418-90

declaring the modulation factor for the income year has been

registered under Division 2 of Part 4 of the Legislative

Instruments Act 2003; or

(b) for the 2018-19 income year or a later income year.

(3) A failure to comply with subsection (1) or paragraph (2)(a) does

not invalidate the creation of an

exploration credit.

(4) An

exploration credit is to be expressed as a monetary amount.

(5) The entity cannot make more than one decision to create

exploration credits for an income year, and the decision is final

and irrevocable.

418-75 Meaning of greenfields minerals explorer

(1) An entity is a greenfields minerals explorer in an income year if:

(a) the entity has

greenfields minerals expenditure for the

income year; and

(b) during the income year, the entity is a disclosing entity

(within the meaning of section 111AC of the Corporations

Act 2001); and

constitutional

corporation; and

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(d) during the income year, and during the immediately

preceding income year, neither:

(i) the entity; nor

(ii) any other entity that is

connected with or is an

affiliate

of the entity;

carried on any mining operations on a mining property for

extracting

minerals (except

petroleum) from their natural

site, for the

purpose of producing assessable income.

(2) However, an entity is not a greenfields minerals explorer in an

income year in which either or both of the following happens, or in

any subsequent income year:

(a) the entity fails to comply with a request of the Commissioner

under subsection 418-80(5);

(b) a determination under section 418-185 has effect.

Note 1:

Under subsection 418-80(5), the Commissioner may request a report

on an area in relation to which an entity has greenfields minerals

expenditure.

Note 2:

Under section 418-185, the Commissioner may determine that an

entity that is, or has been, liable to excess exploration credit tax is not

to be treated as a greenfields minerals explorer.

418-80 Meaning of greenfields minerals expenditure

(1) An entity's greenfields minerals expenditure for an income year is

the sum of:

(a) the amounts of any deductions to which the entity is entitled

under section 40-25 for that income year in relation to

declines in value that:

(i) are declines in value of

depreciating assets used for

exploration or prospecting for

minerals in an area to

which subsection (3) of this section applies; and

(ii) are worked out under subsection 40-80(1); and

(b) the amounts of any deductions for that income year to which

the entity is entitled in relation to expenditure:

(i) that is of a kind referred to in subsection 40-730(1); and

(ii) in relation to which the entity satisfies one or more of

paragraphs 40-730(1)(a) to (c); and

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(iii) that is expenditure on exploration or prospecting for

minerals in an area to which subsection (3) of this

section applies.

(2) For the purposes of subsection (1), disregard a deduction to the

extent that it relates to:

(a) matters other than:

(i) declines in value of

depreciating assets used for; or

(ii) expenditure on;

exploration or prospecting for

minerals in an area to which

subsection (3) of this section applies; or

(b) exploration or prospecting for

petroleum or oil shale; or

the viability of a mineral resource rather than its existence.

(3) This subsection applies to an area:

(a) that is in Australia; and

(b) in relation to which the entity

holds a

mining, quarrying or

prospecting right at the time of incurring the expenditure; and

that is at least inferred in a report prepared in accordance

with the requirements of:

(i) unless subparagraph (ii) applies--the document that is

known as the Australasian Code for Reporting of

Exploration Results, Minerals Resources and Ore

Reserves and that took effect on 20 December 2012; or

Note:

This document is commonly referred to as the JORC Code (2012

Edition).

(ii) such other document as the regulations prescribe; and

(d) that is not, and is not in, any of the following:

(i) the coastal sea of Australia (within the meaning of

subsection 15B(4) of the Acts Interpretation Act 1901);

(ii) an offshore area for the purpose of the Offshore

Petroleum and Greenhouse Gas Storage Act 2006;

(iii) the Joint Petroleum Development Area (within the

meaning of the Petroleum (Timor Sea Treaty) Act

2003).

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Note:

An offshore area and the Joint Petroleum Development Area

include the territorial sea, the exclusive economic zone and the

continental shelf of Australia.

(4) For the purposes of paragraph (3)(c), disregard any mineral

resource, identified in a report of a kind referred to in that

paragraph, that does not include

minerals the exploration or

prospecting for which involved:

(a) use of assets referred to in paragraph (1)(a); or

(b) expenditure referred to in paragraph (1)(b).

(5) The Commissioner may request an entity that is a

greenfields

minerals explorer in an income year to prepare, within the period

specified in the request, a report that:

(a) is of the kind referred to in paragraph (3)(c); and

(b) relates to an area in relation to which the entity has

greenfields minerals expenditure for the income year.

The request may specify the manner in which, and the form in

which, the report is to be prepared.

418-85 Exploration credits must not exceed maximum exploration

credit amount

(1) An entity must not create

exploration credits for an income year

(the current income year) of a total amount that exceeds the

entity's

maximum exploration credit amount for the income year.

(2) The entity's maximum exploration credit amount for the current

income year is worked out as follows:

Method statement

Step 1. Ascertain which of the following is the smallest amount:

(a)

the entity's estimated

tax loss for the previous

income year, as stated in the entity's declaration

under paragraph 418-70(1)(b);

(b)

the entity's actual tax loss for the previous income

year;

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(c)

the entity's estimated

greenfields minerals

expenditure for the previous income year, as stated

in the entity's declaration under

paragraph 418-70(1)(b);

(d)

the entity's actual greenfields minerals expenditure

for the previous income year.

Step 2. Multiply that smallest amount by the

corporate tax rate

applying to the previous income year.

Step 3. Multiply the result of step 2 by the modulation factor

declared under section 418-90 for the current income

year. The result of this step is the entity's maximum

exploration credit amount for the current income year.

(3) In working out the entity's actual

tax loss for the previous income

year for the purposes of step 1 of the method statement in

subsection (2), reduce that tax loss by the sum of:

(a) all

recoupments that the entity receives in relation to the

entity's

greenfields minerals expenditure for the previous

income year; and

(b) any part of the entity's tax loss for the previous income year

that would not be deductible in the current income year; and

(i) an amount has been included in the entity's assessable

income because a

balancing adjustment event occurs

for a

depreciating asset; and

(ii) all or part of the amount of the deduction to which the

entity is entitled under section 40-25 for the previous

income year in relation to the decline in value of the

asset is included in the entity's greenfields minerals

expenditure for that income year;

so much of the amount of that deduction as was included in

that greenfields minerals expenditure.

(4) For the purposes of paragraph (3)(b), assume that the entity's

assessable income for the current income year is sufficient to allow

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the entity to utilise the whole of that tax loss in relation to the

current income year.

(5) In working out the entity's actual

greenfields minerals expenditure

for the previous income year for the purposes of step 1 of the

method statement in subsection (2), reduce that greenfields

minerals expenditure by the sum of:

(a) all

recoupments that the entity receives in relation to the

entity's greenfields minerals expenditure for the previous

income year; and

(b) if:

(i) an amount has been included in the entity's assessable

income because a

balancing adjustment event occurs

for a

depreciating asset; and

(ii) all or part of the amount of the deduction to which the

entity is entitled under section 40-25 for the previous

income year in relation to the decline in value of the

asset is included in the entity's greenfields minerals

expenditure for that income year;

so much of the amount of that deduction as was included in

that greenfields minerals expenditure.

(6) A failure to comply with this section does not invalidate the

creation of an

exploration credit.

418-90 Modulation factors

(1) The Commissioner must, by legislative instrument, declare

modulation factors in accordance with this section for each of the

following:

(a) the 2015-16 income year;

(b) the 2016-17 income year;

(2) The modulation factor for an income year is to be one if the

Commissioner is satisfied that the total amount of

exploration

credits that could be created in respect of that income year will not

exceed the following amount (the exploration credit cap) for the

income year:

(a) for the 2015-16 income year--$25 million;

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(b) for the 2016-17 income year--$35 million;

(3) If subsection (2) does not apply, the modulation factor for the

income year is to be such a number as the Commissioner is

satisfied would reduce the total amount of

exploration credits that

could be created in that income year to the exploration credit cap

for the income year.

(4) In ascertaining for the purposes of subsection (2) or (3) the total

amount of

exploration credits that could be created in an income

year (the current income year), the Commissioner is to:

(a) use the information provided in declarations under

paragraph 418-70(1)(b) for the previous income year; and

(b) disregard the possible application of any modulation factor.

(5) A failure to comply with subsection (2), (3) or (4) does not

invalidate the declaration of a modulation factor for an income

year.

(6) A declaration made under subsection (1) is a legislative instrument,

but section 42 (disallowance) of the Legislative Instruments Act

2003 does not apply to the declaration.

418-95 Effect on tax losses of creating exploration credits

(1) If an entity creates any

exploration credits in respect of a

loss

year, the amount of the entity's

tax loss for the loss year is

reduced by the amount worked out as follows:

The sum of all the *exploration credits the

entity creates in respect of the *loss year

The *corporate tax rate

(2) However, if the amount worked out under subsection (1) equals or

exceeds what would (apart from this section) be the entity's

tax

loss for the

loss year, that tax loss is taken to be nil.

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Subdivision 418-E--Issuing exploration credits

Table of sections

418-110 Issuing exploration credits

418-115 Restricting exploration credits to post 1 July 2014 shares

418-120 Exploration credits to be issued on a proportionate basis

418-125 Expiry of exploration credits

418-130 Notifying the Commissioner of issuing or expiry of exploration credits

418-110 Issuing exploration credits

(1) An entity that has created

exploration credits for an income year

may issue any of those exploration credits to

members of the

entity, in respect of

shares that:

(a) are

equity interests; and

(b) are held by the members.

(2) The

exploration credits are issued by giving each of the

members

a statement in the

approved form.

(3) The issuing of

exploration credits is of no effect unless:

(a) the statements under subsection (2) are given to the

members on or before the first 30 June after the day on

which the modulation factor in respect of the income year is

declared under section 418-90; and

(b) the issuing of credits complies with section 418-120.

418-115 Restricting exploration credits to post 1 July 2014 shares

(1) An entity may, before it has issued any

exploration credits for any

income year, choose to restrict the issuing of exploration credits to

issuing exploration credits in relation to

shares that:

(a) are

equity interests; and

(b) have come into existence on or after 1 July 2014.

(2) A choice under this section is irrevocable.

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418-120 Exploration credits to be issued on a proportionate basis

(1) An entity issuing

exploration credits for an income year must

ensure that the total number of exploration credits issued to any

member of the entity for the year, expressed as a percentage of the

total number of all exploration credits issued to the members of the

entity for the year, is the same as:

(a) if the entity has made a choice under section 418-115--the

total number of

shares in the entity that:

(i) are

equity interests held by the member; and

(ii) have come into existence on or after 1 July 2014;

expressed as a percentage of the total number of the shares in

the entity that:

(iii) are equity interests held by any members of the entity;

and

(iv) have come into existence on or after that day; or

(b) otherwise--the total number of shares in the entity that are

equity interests held by the member, expressed as a

percentage of the total number of the shares in the entity that

are equity interests held by any members of the entity.

(2) For the purposes of this section, the number of

shares that a

member holds in the entity is taken to be the number that the

member held on the day occurring 30 days before the

exploration

credits were issued.

418-125 Expiry of exploration credits

exploration credit created by an entity for an income year

expires if the entity does not issue the credit under this Subdivision

on or before the first 30 June after the day on which the modulation

factor in respect of the income year is declared under

section 418-90.

418-130 Notifying the Commissioner of issuing or expiry of

exploration credits

(1) An entity that has created

exploration credits for an income year

must notify the Commissioner of the issuing or expiry of the

credits.

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(2) The notice must:

(a) be in the

approved form; and

(b) be given to the Commissioner on or before the due date:

(i) if the entity is an

investment body for

Part VA

investments--for giving to the Commissioner an

annual investment income report in respect of the

financial year corresponding to the income year; or

(ii) otherwise--for the entity to lodge its

income tax return

for the income year.

Subdivision 418-F--Excess exploration credits

Table of sections

418-150 Excess exploration credit tax

418-155 Due date for payment of excess exploration credit tax

418-160 Returns

418-165 When shortfall interest charge is payable

418-170 General interest charge

418-175 Refunds of amounts overpaid

418-180 Record keeping

418-185 Determining an entity not to be a greenfields minerals explorer

418-150 Excess exploration credit tax

An entity is liable to pay

excess exploration credit tax for an

income year if the sum of the

exploration credits it issues for the

income year exceeds the entity's

maximum exploration credit

amount for the income year.

Note:

The tax is imposed by the Excess Exploration Credit Tax Act 2014,

and the amount of the tax is set out in that Act.

418-155 Due date for payment of excess exploration credit tax

An entity's

excess exploration credit tax for an income year, as

assessed under Schedule 1 to the Taxation Administration Act

1953, is due and payable at the end of the day by which the entity

is required under section 418-160 to give the return relating to the

income year.

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Note:

For assessments of excess exploration credit tax, see Division 155 in

Schedule 1 to the Taxation Administration Act 1953.

418-160 Returns

An entity that is liable to pay

excess exploration credit tax for an

income year must give the Commissioner a return relating to

excess exploration credit tax, in the

approved form, within 21

days after the end of the

financial year corresponding to the

income year.

418-165 When shortfall interest charge is payable

An amount of

shortfall interest charge that an entity is liable to

pay is due and payable 21 days after the day on which the

Commissioner gives the entity notice of the charge.

Note:

Shortfall interest charge is imposed if the Commissioner amends an

assessment and the amended assessment results in an increase in some

tax payable. For provisions about liability for shortfall interest charge,

see Division 280 in Schedule 1 to the Taxation Administration Act

1953.

418-170 General interest charge

If:

(a)

excess exploration credit tax or

shortfall interest charge

payable by an entity remains unpaid after the time by which

it is due and payable; and

(b) the Commissioner has not allocated the unpaid amount to an

RBA;

the entity is liable to pay the

general interest charge on the unpaid

amount for each day in the period that:

exploration credit tax or shortfall interest charge was due to

be paid; and

(d) ends at the end of the last day on which, at the end of the day,

any of the following remains unpaid:

(i) the excess exploration credit tax or shortfall interest

charge;

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(ii) general interest charge on any of the excess exploration

credit tax or shortfall interest charge.

Note:

The general interest charge is worked out under Part IIA of the

Taxation Administration Act 1953.

418-175 Refunds of amounts overpaid

Section 172 of the Income Tax Assessment Act 1936 applies for the

purposes of this Division as if references in that section to tax

included references to

excess exploration credit tax.

418-180 Record keeping

Section 262A of the Income Tax Assessment Act 1936 applies for

the purposes of this Division as if:

(a) the reference in that section to a person carrying on a

business were a reference to a

corporate tax entity; and

(b) the reference in paragraph (2)(a) of that section to the

person's income and expenditure were a reference to the

entity's liability to pay

excess exploration credit tax; and

418-185 Determining an entity not to be a greenfields minerals

explorer

(1) The Commissioner may determine, by written notice given to an

entity that is, or has been, liable to pay

excess exploration credit

tax for an income year, that the entity is no longer to be treated as a

greenfields minerals explorer.

(2) The determination takes effect from:

(a) if, at the time the notice is given, the entity has not issued any

exploration credits for the income year in which the notice is

given--that income year; or

(b) otherwise--the next income year.

(3) If the entity or a

member of the entity is dissatisfied with a

determination under subsection (1), the entity or member may

object to it in the manner set out in Part IVC of the Taxation

Administration Act 1953.

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Part 2

--Other amendments

Income Tax Assessment Act 1936

3 Subsection 6(1)

Insert:

exploration credit has the same meaning as in the Income Tax

Assessment Act 1997.

exploration development incentive tax offset means a tax offset

under Subdivision 418-B of the Income Tax Assessment Act 1997.

4 After paragraph 177C(1)(bb)

Insert:

(bba) an exploration credit being issued to the taxpayer where the

whole or a part of that exploration credit would not have been

issued, or might reasonably be expected not to have been

issued, to the taxpayer if the scheme had not been entered

into or carried out; or

5 After paragraph 177C(1)(f)

Insert:

(fa) in a case where paragraph (bba) applies--the amount of the

whole of the exploration credit or of the part of the

exploration credit, as the case may be, referred to in that

paragraph; and

6 At the end of subsection 177C(2A)

Add:

; or (c) an exploration credit being issued to the taxpayer the whole

or a part of which would not have been, or might reasonably

be expected not to have been, issued to the taxpayer if the

scheme had not been entered into or carried out, where:

(i) the issuing of the exploration credit to the taxpayer is

attributable to the making of a choice under

Division 418 of the Income Tax Assessment Act 1997;

and

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(ii) the scheme consisted solely of the making of the

choice.

7 Subsection 177C(3)

Omit "or (b)(i):", substitute ", (b)(i) or (c)(i):".

8 At the end of paragraph 177C(3)(ca)

Add "or".

9 After paragraph 177C(3)(ca)

Insert:

(cb) the issuing of an exploration credit to a taxpayer;

10 At the end of subsection 177C(3)

Add:

; or (h) the exploration credit would not have been issued.

11 After paragraph 177CB(1)(d)

Insert:

(da) the whole or a part of an exploration credit not being issued

to the taxpayer;

12 At the end of paragraph 177F(1)(d)

Add "or".

13 After paragraph 177F(1)(d)

Insert:

(e) in the case of a tax benefit that is referable to an exploration

credit, or a part of an exploration credit, being issued to the

taxpayer--determine that:

(i) the whole or a part of an exploration development

incentive tax offset that would otherwise be allowable to

the taxpayer in relation to the exploration credit, or the

part of the exploration credit, as the case may be, is not

to be allowable to the taxpayer; or

(ii) the whole or a part of a franking credit that would

otherwise arise in the franking account of the taxpayer

in relation to the exploration credit, or the part of the

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exploration credit, as the case may be, is not to arise in

the franking account of the taxpayer;

14 At the end of paragraph 177F(3)(d)

Add "or".

15 After paragraph 177F(3)(d)

Insert:

(e) if, in the opinion of the Commissioner:

(i) an amount would have been allowed, or would be

allowable, to the relevant taxpayer as an exploration

development incentive tax offset if the scheme had not

been entered into or carried out, being an amount that

was not allowed or would not, apart from this

subsection, be allowable, as the case may be, as an

exploration development incentive tax offset to the

relevant taxpayer; and

(ii) it is fair and reasonable that the amount, or a part of the

amount, should be allowable as an exploration

development incentive tax offset to the relevant

taxpayer;

determine that that amount or that part, as the case may be,

should have been allowed or is allowable, as the case may be,

as an exploration development incentive tax offset to the

relevant taxpayer; or

(f) if, in the opinion of the Commissioner:

(i) an amount of a franking credit would have arisen, or

would arise, in the franking account of the relevant

taxpayer in relation to an exploration credit, being an

amount that did not arise, or would not, apart from this

subsection, have arisen, as the case may be, in the

franking account of the relevant taxpayer in relation to

the exploration credit; and

(ii) it is fair and reasonable that the amount, or a part of the

amount, should arise, in the franking account of the

relevant taxpayer in relation to the exploration credit;

determine that that amount or that part, as the case may be,

should have arisen, or arises, as the case may be, in the

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franking account of the relevant taxpayer in relation to the

exploration credit;

Income Tax Assessment Act 1997

16 Section 13-

1 (after table item headed "Equine Workers

Hardship Wage Supplement Payment")

Insert:

exploration for minerals

exploration development incentive .................................... Subdivision 418-B

17 At the end of section 36-25

Add:

Tax losses of greenfields minerals explorers

Item

For the special rules about this

situation...

See:

A greenfields minerals explorer creates

exploration credits.

Section 418-95

18 At the end of Subdivision 197-A

Add:

197-42 Exclusion for exploration credits

This Division does not apply to the transferred amount if:

(a) the company transferring the amount is a

greenfields

minerals explorer; and

(b) the amount is transferred in connection with the creation of

exploration credits.

19 Subsection 205-15(1) (at the end of the table)

Add:

Exploration development incentive Schedule 6

Other amendments Part 2

No. , 2014

Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill

2014

franking credit arises

under

subsection 418-50(1) in

relation to an

exploration credit

the amount of the

franking credit specified

in subsection 418-50(2)

at the time provided by

subsection 418-50(3)

20 Subsection 219-15(2) (at the end of the table)

Add:

franking credit arises

under

subsection 418-55(1) in

relation to an

exploration credit

the amount of the

franking credit specified

in subsection 418-55(2)

at the time provided by

subsection 418-55(3)

21 Subparagraphs 418-80(2)(b)(ii) and (iii)

Repeal the subparagraphs, substitute:

(ii) an area referred to in subsection 960-505(2); and

22 Subsection 995-1(1)

Insert:

annual investment income report means a report, relating to

Part VA investments, that an entity is required to give to the

Commissioner, in respect of a

financial year, under the regulations

made under the Income Tax Assessment Act 1936.

23 Subsection 995-1(1) (definition of annual investment

income report)

Omit "the regulations made under the Income Tax Assessment Act

1936", substitute "section 393-10 in Schedule 1 to the Taxation

Administration Act 1953".

24 Subsection 995-1(1)

Insert:

excess exploration credit tax means tax imposed by the Excess

Exploration Credit Tax Act 2014.

exploration credit means an exploration credit created under

Subdivision 418-D.

Schedule 6 Exploration development incentive

Part 2 Other amendments

Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill

2014

No. , 2014

greenfields minerals expenditure has the meaning given by

section 418-80.

greenfields minerals explorer has the meaning given by

section 418-75.

maximum exploration credit amount has the meaning given by

subsection 418-85(2).

25 Subsection 995-1(1) (paragraph (a) of the definition of tax

loss)

After "section 415-15", insert "or reduced under section 418-95".

Taxation Administration Act 1953

26 Subsection 8AAB(4) (after table item 16)

Insert:

16A

418-170

Income Tax Assessment Act

1997

payment of excess exploration

credit tax or shortfall interest

charge

27 Section 45-340 in Schedule 1 (at the end of paragraph (g)

of step 1 of the method statement)

Add "; or".

28 Section 45-340 in Schedule 1 (at the end of step 1 of the

method statement)

Add:

(h)

Subdivision 418-B of the Income Tax Assessment

Act 1997 (the exploration development incentive

tax offset).

29 Section 45-375 in Schedule 1 (at the end of paragraph (f)

of step 1 of the method statement)

Add "; or".

Exploration development incentive Schedule 6

Other amendments Part 2

No. , 2014

Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill

2014

30 Section 45-375 in Schedule 1 (at the end of step 1 of the

method statement)

Add:

(g)

Subdivision 418-B of the Income Tax Assessment

Act 1997 (the exploration development incentive

tax offset).

31 At the end of subsection 155-5(2) in Schedule 1

Add:

; (g) an amount of

excess exploration credit tax for an income

year.

32 Subsection 155-15(1) in Schedule 1 (at the end of the

table)

Add:

an amount of

excess

exploration credit tax for an

income year

the Commissioner

return given under

section 418-160 for the

income year

33 Subsection 250-10(2) in Schedule 1 (after table item 38C)

Insert:

38D

excess exploration

credit tax

418-155

Income Tax Assessment Act 1997

34 After section 280-100 in Schedule 1

Insert:

280-101 Liability to shortfall interest charge--excess exploration

credit tax

(1) You are liable to pay

shortfall interest charge on an additional

amount of

excess exploration credit tax that you are liable to pay

because the Commissioner amends your assessment for an income

year.

(2) The liability is for each day in the period:

Schedule 6 Exploration development incentive

Part 2 Other amendments

Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill

2014

No. , 2014

(a) beginning at the start of the day on which

excess exploration

credit tax under your first assessment for that income year

was due to be paid, or would have been due to be paid if

there had been any; and

(b) ending at the end of the day before the day on which the

Commissioner gave you notice of the amended assessment.

(3) However, if an amended assessment reinstates all or part of a

liability in relation to a particular that had been reduced by an

earlier amended assessment, the period for the reinstated liability

begins at the start of the day on which

excess exploration credit

tax under the earlier amended assessment was due to be paid, or

would have been due to be paid if there had been any.

Note:

See Subdivision 418-F of the Income Tax Assessment Act 1997 for

when the amount of excess exploration credit tax and shortfall interest

charge becomes due and payable. That Subdivision also provides for

general interest charge on any part of the additional amount (plus any

shortfall interest charge) that remains unpaid after the additional

amount is due and payable.

35 Paragraph 280-105(1)(a) in Schedule 1

After "income tax,", insert "

excess exploration credit tax,".

36 Subsection 280-110(1) in Schedule 1

After "280-100,", insert "280-101,".

37 Subsection 284-80(1) in Schedule 1 (at the end of the

table)

Add:

You are liable to pay to the Commissioner an amount of

excess exploration

credit tax

Exploration development incentive Schedule 6

Repeal of Division 418 Part 3

No. , 2014

Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill

2014

Part 3

--Repeal of Division 418

Income Tax Assessment Act 1936

38 Subsection 6(1)

Repeal the following definitions:

(a) definition of exploration credit;

(b) definition of exploration development incentive tax offset.

39 Paragraphs 177C(1)(bba) and (fa)

Repeal the paragraphs.

40 Subparagraph 177C(2A)(b)(ii)

Omit "election; or", substitute "election.".

41 Paragraph 177C(2A)(c)

Repeal the paragraph.

42 Subsection 177C(3)

Omit ", (b)(i) or (c)(i)", substitute "or (b)(i)".

43 Paragraph 177C(3)(ca)

Omit "or".

44 Paragraph 177C(3)(cb)

Repeal the paragraph.

45 Paragraph 177C(3)(g)

Omit "allowable; or", substitute "allowable.".

46 Paragraphs 177C(3)(h) and 177CB(1)(da)

Repeal the paragraphs.

47 Paragraph 177F(1)(d)

Omit "taxpayer; or", substitute "taxpayer.".

Schedule 6 Exploration development incentive

Part 3 Repeal of Division 418

Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill

2014

No. , 2014

48 Paragraph 177F(1)(e)

Repeal the paragraph.

49 Paragraph 177F(3)(d)

Omit "taxpayer; or", substitute "taxpayer.".

50 Paragraphs 177F(3)(e) and (f)

Repeal the paragraphs.

Income Tax Assessment Act 1997

51 Section 13-

1 (table item headed "exploration for

minerals")

Repeal the item.

52 Section 36-25 (table dealing with tax losses of greenfields

minerals explorers)

Repeal the table.

53 Section 67-23 (table item 27)

Repeal the item.

54 Section 197-42

Repeal the section.

55 Subsection 205-15(1) (table item 7)

Repeal the item.

56 Subsection 219-15(2) (table item 8)

Repeal the item.

57 Division 418

Repeal the Division.

58 Subsection 995-1(1)

Repeal the following definitions:

(a) definition of annual investment income report;

Exploration development incentive Schedule 6

Repeal of Division 418 Part 3

No. , 2014

Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill

2014

(b) definition of excess exploration credit tax;

(d) definition of greenfields minerals expenditure;

(e) definition of greenfields minerals explorer;

(f) definition of maximum exploration credit amount.

59 Subsection 995-1(1) (paragraph (a) of the definition of tax

loss)

Omit "or reduced under section 418-95".

Taxation Administration Act 1953

60 Subsection 8AAB(4) (table item 16A)

Repeal the item.

61 Section 45-340 in Schedule 1 (paragraph (g) of step 1 of

the method statement)

Omit "spouse); or", substitute "spouse).".

62 Section 45-340 in Schedule 1 (paragraph (h) of step 1 of

the method statement)

Repeal the paragraph.

63 Section 45-375 in Schedule 1 (paragraph (f) of step 1 of

the method statement)

Omit "spouse); or", substitute "spouse).".

64 Section 45-375 in Schedule 1 (paragraph (g) of step 1 of

the method statement)

Repeal the paragraph.

65 Paragraph 155-5(2)(f) in Schedule 1

Omit "year;", substitute "year.".

66 Paragraph 155-5(2)(g) in Schedule 1

Repeal the paragraph.

Schedule 6 Exploration development incentive

Part 3 Repeal of Division 418

Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill

2014

No. , 2014

67 Subsection 155-15(1) in Schedule 1 (table item 4)

Repeal the item.

68 Subsection 250-10(2) in Schedule 1 (table item 38D)

Repeal the item.

69 Section 280-101 in Schedule 1

Repeal the section.

70 Paragraph 280-105(1)(a) in Schedule 1

Omit "

excess exploration credit tax,".

71 Subsection 280-110(1) in Schedule 1

Omit "280-101,".

72 Subsection 284-80(1) in Schedule 1 (table item 5)

Repeal the item.

Exploration development incentive Schedule 6

Application and saving provisions Part 4

No. , 2014

Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill

2014

Part 4

--Application and saving provisions

Division 1

--Application of amendments

73 Application of amendments

(1)

The amendments made by Parts 1 and 2 of this Schedule apply in

relation to the 2015-16, 2016-17 and 2017-18 income years, but not in

relation to any later income years.

(2)

Despite subitem (1), item 23 of this Schedule does not apply in relation

to an income year commencing before 1 July 2015.

Note:

Subitem (2) will apply in relation to early balance substituted accounting periods for the

2015-16 income year.

Division 2

--Savings provisions relating to repeal of

Division 418

74 Object

The object of this Division is to ensure that, despite the repeals and

amendments made by Part 3 of this Schedule, the full legal and

administrative consequences of:

(a) any act done or omitted to be done; or

(b) any state of affairs existing; or

before such a repeal or amendment commences, can continue to arise

and be carried out, directly or indirectly through an indefinite number of

steps, even if some or all of those steps are taken after the repeal or

amendment commences.

75 Making and amending assessments, and doing other

things, in relation to past matters

Even though an Act is amended by Part 3 of this Schedule, the

amendment is disregarded for the purpose of doing any of the following

under any Act or legislative instrument:

(a) making or amending an assessment (including under a

provision that is itself repealed or amended);

Schedule 6 Exploration development incentive

Part 4 Application and saving provisions

Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill

2014

No. , 2014

(b) exercising any right or power, performing any obligation or

duty or doing any other thing (including under a provision

that is itself repealed or amended);

in relation to any act done or omitted to be done, any state of affairs

existing, or any period ending, before the amendment commences.

76 Saving of provisions about effect of assessments

If a provision or part of a provision that is repealed or amended by

Part 3 of this Schedule deals with the effect of an assessment, the repeal

or amendment is disregarded in relation to assessments made, before or

after the repeal or amendment commences, in relation to any act done or

omitted to be done, any state of affairs existing, or any period ending,

before the repeal or amendment commences.

77 Saving of provisions about general interest charge or

shortfall interest charge

If:

(a) a provision or part of a provision that is repealed or amended

by Part 3 of this Schedule provides for the payment of:

(i) general interest charge or shortfall interest charge

(within the meaning of the Income Tax Assessment Act

1997); or

(ii) interest under the Taxation (Interest on Overpayments

and Early Payments) Act 1983; and

(b) in a particular case, the period in respect of which the charge

or interest is payable (whether under the provision or under

the Taxation Administration Act 1953) has not begun, or has

begun but not ended, when the provision is repealed or

amended;

then, despite the repeal or amendment, the provision or part continues to

apply in the particular case until the end of the period.

78 Repeals disregarded for the purposes of dependent

provisions

If the operation of a provision (the subject provision) of any Act or

legislative instrument depends to any extent on a provision of an Act,

and that provision is repealed by Part 3 of this Schedule, the repeal is

disregarded so far as it affects the operation of the subject provision.

Schedule 7 Miscellaneous amendments

Part 1 Amendments commencing on the day after this Act receives the Royal Assent

Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill

2014

No. , 2014

Schedule 7

--Miscellaneous amendments

Part 1

--Amendments commencing on the day after

this Act receives the Royal Assent

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

1 Section 17-15

Repeal the section.

2 Subsection 31-15(3)

Repeal the subsection.

3 Application of amendments

The amendments made by items 1 and 2 apply in relation to tax periods

starting after the day this Act receives the Royal Assent.

4 Paragraph 63-27(1)(b)

Omit "a a", substitute "a".

5 Section 93-15

Repeal the section, substitute:

93-15 GST no longer able to be taken into account

You are not entitled to an input tax credit for a

creditable

acquisition to the extent that GST on the related supply has not

been taken into account in the

assessment of the supplier's

net

amount for the tax period to which that GST is attributable if:

(a) the period of review (within the meaning of section 155-35 in

Schedule 1 to the Taxation Administration Act 1953) for that

assessment has ended; and

(b) when that period of review ended, you did not hold a

tax

invoice for the creditable acquisition.

Miscellaneous amendments Schedule 7

Amendments commencing on the day after this Act receives the Royal Assent Part 1

No. , 2014

Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill

2014

6 Application of amendment

The amendment made by item 5 applies in relation to each creditable

acquisition for which the GST on the related supply is attributable to a

tax period, or tax periods, starting after the day this Act receives the

Royal Assent.

Excise Act 1901

7 Section 5

Omit "(except as provided by sections 129 to 132, inclusive)".

8 Subsection 116(2)

Omit "120(iiia)", substitute "120(1)(iiia)".

Income Tax Assessment Act 1936

9 Section 94L

After "income tax law", insert "(other than subsection 44(1A) of this

Act)".

10 Application of amendment

The amendment made by item 9 applies in relation to dividends paid on

or after 28 June 2010.

11 Subsection 160ZZVB(2)

Omit "within the meaning of the Income Tax (International

Agreements) Act 1953", substitute "(within the meaning of the

International Tax Agreements Act 1953)".

12 Subsection 272-87(3) in Schedule 2F

Omit "greater then", substitute "greater than".

Income Tax Assessment Act 1997

13 Section 13-

1 (after table item headed "imputation")

Insert:

Schedule 7 Miscellaneous amendments

Part 1 Amendments commencing on the day after this Act receives the Royal Assent

Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill

2014

No. , 2014

infrastructure

borrowings .......................................................................... 159GZZZZG

14 Section 13-

1 (table item headed "trusts")

After:

trust income of beneficiary with legal disability ................. 100(2)

insert:

trust income (modifications for special disability

trusts) .............................................................................

95AB(5)

15 Paragraph 40-340(2)(b)

Omit "(which excludes certain assets from roll-over relief under

Subdivision 122-A)", substitute "(which excludes certain assets from

some kinds of CGT roll-over)".

16 Subsections 165-115AA(2) and (3)

Omit "

market value", substitute "market value".

17 Subsection 295-490(1) (table item 2B)

Omit "subsection 295-490(1)", substitute "subsection 295-190(1)".

18 Application of amendment

The amendment made item 17 applies in relation to:

(a) notices given under section 290-170 of the Income Tax

Assessment Act 1997 on or after the commencement of this

item; and

(b) notices of variation given under section 290-180 of that Act

on or after the commencement of this item (whether the

notices being varied were given before, on or after the

commencement of this item).

19 Section 415-95

Omit "who is a member of the staff assisting the Infrastructure CEO as

mentioned in section 39", substitute "referred to in paragraph 39(1)(a)

or 39A(1)(a)".

Miscellaneous amendments Schedule 7

Amendments commencing on the day after this Act receives the Royal Assent Part 1

No. , 2014

Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill

2014

20 Subsection 420-60(4)

After "other than an

Australian carbon credit unit", insert "to which

subsection (3) applies".

21 Application of amendment

The amendment made by item 20 applies in relation to income years

commencing on or after the commencement of that item.

Income Tax (Transitional Provisions) Act 1997

22 Subdivision 420-B

Repeal the Subdivision.

Petroleum Resource Rent Tax Assessment Act 1987

23 Subparagraph 31(1)(b)(ii) of Schedule 1

Repeal the paragraph, substitute:

(ii) if section 41 applies to the expenditure--the company taken

under subparagraph 41(1)(a)(ii) to have made the payment of

the expenditure held the loss interest in the transferring

entity.

24 Application of amendment

Item 11 of Schedule 6 to the Tax Laws Amendment (2013 Measures

No. 2) Act 2013 (the earlier application provision) applies in relation to

the amendment made by item 23 of this Schedule in a corresponding

way to the way the earlier application provision applies in relation to the

amendment made by item 9 of that Schedule.

Retirement Savings Accounts Act 1997

25 Subparagraph 3(1)(e)(ii)

Omit "subsection 144(1A)", substitute "subsection 144(2A)".

Schedule 7 Miscellaneous amendments

Part 1 Amendments commencing on the day after this Act receives the Royal Assent

Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill

2014

No. , 2014

Superannuation Act 2005

26 Subparagraph 14(4)(a)(iv)

Omit ", (4A)".

27 Paragraph 18(3)(d)

Omit ", (4A)".

Superannuation Guarantee (Administration) Act 1992

28 Subsection 32C(4A)

Repeal the subsection.

Superannuation Industry (Supervision) Act 1993

29 Paragraph 71(1)(g)

After "business real property", insert "(within the meaning of

subsection 66(5))".

30 Transitional provision

--in-house assets

(1)

For an asset that was an asset of a superannuation fund during any part

of the period:

(a) starting on 7 July 2010; and

(b) ending on the day before the commencement of this item;

paragraph 71(1)(g) of the Superannuation Industry (Supervision) Act

1993 applies as if the expression business real property of the fund had

the same meaning in that paragraph as it had in subsection 66(5) of that

Act.

(2)

This item has effect despite item 9 of Schedule 1 to the Superannuation

Industry (Supervision) Amendment Act 2010.

31 Section 253 (at the end of note 3)

Add ".".

Miscellaneous amendments Schedule 7

Amendments commencing on the day after this Act receives the Royal Assent Part 1

No. , 2014

Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill

2014

Superannuation (Productivity Benefit) Act 1988

32 Subparagraph 3AB(1)(b)(iii)

Omit ", (4A)".

Taxation Administration Act 1953

33 Subsection 2(1)

Insert:

assessable amount has the meaning given by subsection 155-5(2)

in Schedule 1.

34 Paragraph 3B(1AA)(a)

Repeal the paragraph.

35 Section 14ZQ (definition of franking assessment)

Repeal the definition.

36 Paragraph 14ZW(1AAC)(b)

Repeal the paragraph, substitute:

(b) 4 years after the last day allowed to the person for lodging a

return relating to the assessment of the assessable amount to

which the ruling relates.

37 Application of amendment

The amendment made by item 36 applies in relation to:

(a) tax periods starting after the day this Act receives the Royal

Assent; or

(b) payments or refunds that:

(i) do not relate to any tax period; and

(ii) relate to liabilities or entitlements that arise after the day

this Act receives the Royal Assent.

38 Paragraph 284-75(3)(b) in Schedule 1

After "

tax-related liability", insert "(other than one arising under the

Excise Acts)".

Schedule 7 Miscellaneous amendments

Part 1 Amendments commencing on the day after this Act receives the Royal Assent

Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill

2014

No. , 2014

39 Application of amendment

The amendment made by item 38 applies in relation to returns, notices

or documents required to be given to the Commissioner on or after the

commencement of that item.

40 Paragraph 355-25(2)(b) in Schedule 1

Repeal the paragraph, substitute:

(b) the covered entity is a

legal practitioner representing the

primary entity in relation to the primary entity's affairs

relating to one or more

taxation laws; or

(ba) the covered entity is a public officer (within the meaning of

section 252 or 252A of the Income Tax Assessment Act 1936)

of the primary entity; or

41 Application of amendment

The amendment made by item 40 applies in relation to records and

disclosures of information made on or after the commencement of that

item (regardless of when the information was acquired).

42 Paragraph 355-70(4)(j) in Schedule 1

Repeal the paragraph, substitute:

(j) the Crime and Corruption Commission of Queensland; or

43 Application of amendment

The amendment made by item 42 applies in relation to records and

disclosures of information made on or after 1 July 2014 (regardless of

when the information was acquired).

Miscellaneous amendments Schedule 7

Other amendments Part 2

No. , 2014

Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill

2014

Part 2

--Other amendments

Petroleum Resource Rent Tax Assessment Act 1987

44 Paragraph 35(1)(a)

Repeal the paragraph, substitute:

(a) any amount of class 1 GDP factor expenditure actually

incurred by the person in relation to the project in the

financial year, being expenditure incurred more than 5 years

before the earlier of the following:

(i) the day specified in the production licence notice in

relation to the project;

(ii) the day the production licence was issued in relation to

the project; and

Superannuation Laws Amendment (Capital Gains Tax Relief

and Other Efficiency Measures) Act 2012

45 Item 22 of Schedule 4

After ""Commissioner"", insert "(first occurring)".

46 Item 23 of Schedule 4

After ""Commissioner"", insert "(first occurring)".

47 Subitem 30(2) of Schedule 4

Omit "45S(1)", substitute "45R(1)".

48 Item 46 of Schedule 4

After ""Commissioner"", insert "(first occurring)".

Superannuation Legislation Amendment (Further MySuper

and Transparency Measures) Act 2012

49 Item 42 of Schedule 3 (heading)

Omit "Division 6 of".

Schedule 7 Miscellaneous amendments

Part 2 Other amendments

Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill

2014

No. , 2014

50 Item 42 of Schedule 3

After "Add:", insert:

Division 5--Offences

51 Validation of regulations

(1)

Regulations made under the Superannuation Industry (Supervision) Act

1993 before the commencement of this item are as valid as they would

have been if they had been made under that Act as amended by the

corrected Act.

(2)

For the purposes of this item, the corrected Act is the Superannuation

Legislation Amendment (Further MySuper and Transparency

Measures) Act 2012 as amended by items 49 and 50 of this Schedule.

Tax and Superannuation Laws Amendment (2013 Measures

No. 2) Act 2013

52 Item 11 of Schedule 1 (after the heading)

Insert "Insert:".

Tax Laws Amendment (2013 Measures No. 2) Act 2013

53 Item 34 of Schedule 2

Omit "(3),", substitute "(3)".

54 Item 34 of Schedule 2

Omit "(3A),", substitute ", (3A)".

Commonwealth of Australia Bills

TAX AND SUPERANNUATION LAWS AMENDMENT (2014 MEASURES NO. 7) BILL 2014