TAX LAWS AMENDMENT (2005 MEASURES NO. 1) BILL 2005

i Tax Laws Amendment (2005 Measures No. 1) Bill 2005 No. , 2005

Contents

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

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

Schedule(s)....................................................................................2

Schedule 1--Fringe benefits tax exemptions

Fringe Benefits Tax Assessment Act 1986

Schedule 2--Effective life of assets declining in value

Income Tax Assessment Act 1997

Schedule 3--Supplies of rights or options offshore

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

Schedule 4--Mature age worker tax offset

Income Tax Assessment Act 1997

Tax Laws Amendment (2005 Measures No. 1) Bill 2005 No. , 2005 1

A Bill for an Act to amend the law relating to

taxation, and for related purposes

The Parliament of Australia enacts:

1 Short title

This Act may be cited as the Tax Laws Amendment (2005

Measures No. 1) Act 2005.

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.

2 Tax Laws Amendment (2005 Measures No. 1) Bill 2005 No. , 2005

Commencement information

Column 1

Column 2

Column 3

Provision(s)

Commencement

Date/Details

1. Sections 1 to 3

and anything in

this Act not

elsewhere covered

by this table

The day on which this Act receives the

Royal Assent.

2. Schedules 1 to

The day on which this Act receives the

Royal Assent.

3. Schedule 4

Immediately after the commencement of

Schedule 1 to the Tax Laws Amendment

(2004 Measures No. 7) Act 2005.

Note:

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

passed by the Parliament and assented to. It will not be expanded to

deal with provisions inserted in this Act after assent.

(2) Column 3 of the table contains additional information that is not

part of this Act. Information in this column may be added to or

edited in any published version of this Act.

3 Schedule(s)

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

repealed as set out in the applicable items in the Schedule

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

according to its terms.

Fringe benefits tax exemptions Schedule 1

Tax Laws Amendment (2005 Measures No. 1) Bill 2005 No. , 2005 3

Schedule 1--Fringe benefits tax exemptions

Fringe Benefits Tax Assessment Act 1986

1 After section 58A

Insert:

58AA Exempt benefits--engagement of relocation consultant

(1) A benefit is an exempt benefit in relation to a year of tax if:

(a) the benefit is an expense payment benefit, or a residual

benefit, provided in, or in respect of, the year of tax in respect

of the employment of an employee; and

(b) the benefit is in respect of, or consists of, the engagement of

a relocation consultant; and

for one or more of the following reasons:

(i) the employee is required to live away from his or her

usual place of residence to perform the duties of the

employment mentioned in paragraph (a) (the new

employment duties);

(ii) having lived away from his or her usual place of

residence to perform the new employment duties, the

employee is required to return there to perform them, or

because the employee has ceased to perform them;

(iii) the employee is required to change his or her usual

place of residence to perform those duties; and

(d) the relocation consultant is engaged to help a family member:

(i) if subparagraph (c)(i) applies--to settle, or to remain, at

or near the location where the employee performs the

new employment duties while living away from his or

her usual place of residence; or

(ii) if subparagraph (c)(ii) applies--to settle at the location

of the employee's usual place of residence; or

(iii) if subparagraph (c)(iii) applies--to settle, or to remain,

at the location of the employee's new usual place of

residence; and

Schedule 1 Fringe benefits tax exemptions

4 Tax Laws Amendment (2005 Measures No. 1) Bill 2005 No. , 2005

(e) the benefit is not provided under a non-arm's length

arrangement; and

(f) if the benefit is an expense payment benefit--documentary

evidence of the recipients expenditure is obtained by the

recipient and that documentary evidence, or a copy, is given

to the employer before the declaration date.

(2) Without limiting subsection (1), a reference in that subsection to

helping a family member to settle, or to remain, at a location

includes:

(a) a relocation consultant finding, or providing information to

the family member about, accommodation for the family

member at the location; or

(b) a relocation consultant providing information to the family

member about education facilities or other community

amenities and services at the location;

but does not include a reference to a relocation consultant paying

expenses on behalf of a family member.

2 Paragraph 58X(2)(g)

After "an electronic diary", insert ", a personal digital assistant".

3 At the end of subsection 58X(2)

Add:

; (i) a portable printer designed for use with a notebook computer,

a laptop computer or a similar portable computer.

4 Paragraph 58ZC(2)(c)

Repeal the paragraph.

5 Application

The amendments made by this Schedule apply in respect of the FBT

year following the FBT year in which this Act receives the Royal

Assent and in respect of all later FBT years.

Effective life of assets declining in value Schedule 2

Tax Laws Amendment (2005 Measures No. 1) Bill 2005 No. , 2005 5

Schedule 2--Effective life of assets declining

in value

Income Tax Assessment Act 1997

1 Subsection 40-102(4) (at the end of the table)

Add:

Bus with a

gross vehicle mass of more than 3.5 tonnes

7.5 years

Light commercial vehicle with a

gross vehicle mass of

3.5 tonnes or less and designed to carry a load of 1 tonne

or more

7.5 years

Minibus with a

gross vehicle mass of 3.5 tonnes or less

and designed to carry 9 or more passengers

7.5 years

Trailer with a

gross vehicle mass of more than 4.5 tonnes

10 years

Truck with a

gross vehicle mass of more than 3.5 tonnes

(other than a truck that is used in

mining operations and

that is not of a kind that can be registered to be driven on a

public road in the place in which the truck is operated)

7.5 years

2 Subsection 995-1(1)

Insert:

gross vehicle mass of a vehicle means:

(a) the road weight specified by the manufacturer of the vehicle

as the maximum design weight capacity of the vehicle; or

(b) in the absence of such a specification, the sum of:

(i) the weight of the vehicle; and

(ii) the weight of the maximum load for which the vehicle

was designed (including the weight of the driver and a

full tank of fuel, if applicable).

3 Application

The amendments made by this Schedule apply to a depreciating asset if

the start time for the asset occurs on or after 1 January 2005.

Schedule 3 Supplies of rights or options offshore

6 Tax Laws Amendment (2005 Measures No. 1) Bill 2005 No. , 2005

Schedule 3--Supplies of rights or options

offshore

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

1 Subsection 9-25(5)

Omit "either".

2 At the end of subsection 9-25(5)

Add:

; or (c) all of the following apply:

(i) neither paragraph (a) nor (b) applies in respect of the

thing;

(ii) the thing is a right or option to acquire another thing;

(iii) the supply of the other thing would be connected with

Australia.

Example: A holiday package for Australia that is supplied overseas might be

connected with Australia under paragraph (5)(c).

3 Paragraph 83-5(1)(c)

Repeal the paragraph, substitute:

(i) is

registered or

required to be registered; and

(ii) carries on an enterprise in Australia; and

4 Paragraph 83-5(2)(a)

Omit "that is not

connected with Australia but that is a

taxable supply

because of Division 84", substitute "that is a

taxable supply under

Division 84".

5 Section 84-1

Repeal the section, substitute:

Supplies of rights or options offshore Schedule 3

Tax Laws Amendment (2005 Measures No. 1) Bill 2005 No. , 2005 7

84-1 What this Division is about

This Division deals with supplies (of things other than goods or

real property) taking place outside Australia. The GST on a supply

that is a taxable supply under this Division is "reverse charged" to

the recipient of the supply.

6 Section 84-5 (heading)

Repeal the heading, substitute:

84-5 Intangible supplies from offshore that are taxable supplies

under this Division

7 Subsection 84-5(1)

Repeal the subsection, substitute:

(1) A supply of anything other than goods or

real property that is:

(a) a supply not

connected with Australia; or

(b) a supply connected with Australia because of paragraph

9-25(5)(c);

is a taxable supply if:

recipient of the supply acquires the thing supplied solely

or partly for the purpose of an

enterprise that the recipient

carries on in Australia, but not solely for a

creditable

purpose; and

(d) the supply is for

consideration; and

(e) the recipient is

registered or

required to be registered.

However, the supply is not a

taxable supply to the extent that it is

GST-free or

input taxed.

8 Subsection 84-5(2)

Omit "paragraph (1)(c)", substitute "paragraph (1)(e)".

9 At the end of section 84-10

Add:

(3) If a supply is a taxable supply under both sections 9-5 and 84-5,

GST is only payable under this section (instead of section 9-40).

Schedule 3 Supplies of rights or options offshore

8 Tax Laws Amendment (2005 Measures No. 1) Bill 2005 No. , 2005

10 Subsection 84-13(1) (paragraph (a) of the definition of full

input tax credit)

After "had been", insert "or is".

11 Section 129-70 (paragraph (b) of the definition of full input

tax credit)

Omit "only".

12 Section 129-70 (paragraph (b) of the definition of full input

tax credit)

After "had been", insert "or is".

13 Section 129-75 (paragraph (b) of the definition of full input

tax credit)

Omit "only".

14 Section 129-75 (paragraph (b) of the definition of full input

tax credit)

After "had been", insert "or is".

15 Subsection 132-5(2) (paragraph (b) of the definition of full

input tax credit)

Omit "only".

16 Subsection 132-5(2) (paragraph (b) of the definition of full

input tax credit)

After "had been", insert "or is".

17 Application

The amendments made by this Schedule apply to supplies made on or

after the day on which the Bill for this Act was introduced into the

Parliament.

Mature age worker tax offset Schedule 4

Tax Laws Amendment (2005 Measures No. 1) Bill 2005 No. , 2005 9

Schedule 4--Mature age worker tax offset

Income Tax Assessment Act 1997

1 Section 13-1 (after table item headed "lump sum income

arrears")

Insert:

mature age workers

.................................................................................... Subdivision 61-K

2 At the end of Division 61

Add:

Subdivision 61-K--Mature age worker tax offset

Guide to Subdivision 61-K

61-550 What this Subdivision is about

You may get a tax offset under this Subdivision if you are an

Australian resident individual who is aged 55 or over at the end of

the income year and who has worked during the year.

The amount of the offset depends on the amount of your net

income from working, but is up to a maximum of $500. (Basically,

your net income from working is the total of amounts of assessable

income that are mainly a reward for your personal efforts or skills,

less any relevant deductions.)

Table of sections

Operative provisions

61-555

Object of this Subdivision

61-560

Entitlement to the mature age worker tax offset

61-565

The amount of the tax offset

61-570

Definition of net income from working

Schedule 4 Mature age worker tax offset

10 Tax Laws Amendment (2005 Measures No. 1) Bill 2005 No. , 2005

Operative provisions

61-555 Object of this Subdivision

The object of this Subdivision is to provide a

tax offset (subject to

certain income conditions) as an incentive to Australians aged 55

or over to remain in work.

61-560 Entitlement to the mature age worker tax offset

You are entitled to a

tax offset for an income year if you are an

Australian resident individual who is aged 55 or over at the end of

the income year.

Note:

However, the amount of the tax offset is nil if have you no net income

from working or your net income from working is over $63,000 (or

$58,000 for the 2004-2005 income year).

61-565 The amount of the tax offset

(1) If your

net income from working for the income year is equal to or

less than $53,000, the amount of the

tax offset is the lesser of the

amount worked out under the following formula and $500:

Your net income from working for the year

(2) If your

net income from working for the income year is greater

than $53,000, the amount of the

tax offset is the amount worked

out under the following formula (but not below nil):

Your net income from working

$500

$53,000

for the year

Special rule for the 2004-2005 income year

(3) For the 2004-2005 income year, references in subsections (1) and

(2) to $53,000 are taken instead to be references to $48,000.

61-570 Definition of net income from working

(1) Your net income from working for an income year is the sum of

the following amounts (excluding amounts covered by

subsection (2)):

Mature age worker tax offset Schedule 4

Tax Laws Amendment (2005 Measures No. 1) Bill 2005 No. , 2005 11

(a) your assessable income for the year to the extent that it

consists of the following:

(i)

personal services income;

(ii) assessable income from a

business you carry on;

(iii) an amount included under section 393-15 of

Schedule 2G to the Income Tax Assessment Act 1936 as

a result of the repayment of a

farm management

deposit;

(b) your

reportable fringe benefits total for the year;

less the sum of any amounts you can deduct for the year to the

extent that they relate to assessable income mentioned in

subparagraph (a)(i) or (ii).

(2) Your net income from working for an income year does not

include your assessable income for the year to the extent that it

consists of the following:

(a) amounts of

eligible termination payments;

(b) amounts to which section 26AC or 26AD of the Income Tax

Assessment Act 1936 applies (about annual or long service

leave payments);

160AEA(1) of the Income Tax Assessment Act 1936).

3 Subsection 995-1(1)

Insert:

net income from working has the meaning given by

section 61-570.

4 Subsection 995-1(1)

Insert:

reportable fringe benefits total has the same meaning as in the

Fringe Benefits Tax Assessment Act 1986.

5 Application

The amendments made by this Schedule apply to assessments for the

2004-2005 income year and later income years.

Commonwealth of Australia Bills

TAX LAWS AMENDMENT (2005 MEASURES NO. 1) BILL 2005