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This is a Bill, not an Act. For current law, see the Acts databases.
1998-99
The Parliament of
the
Commonwealth of
Australia
HOUSE OF
REPRESENTATIVES
Presented and read a first
time
Taxation Laws
Amendment Bill (No. 6) 1999
No. ,
1999
(Treasury)
A Bill
for an Act to amend the law relating to taxation, and for related
purposes
ISBN
0642392331
Contents
Part 1—Insertion of new Division in the Income Tax Assessment Act
1997 3
Part 2—Consequential
amendments 24
Income Tax Assessment Act
1936 24
Income Tax Assessment Act
1997 26
Part 3—International Tax Agreements Act
1953 30
Part
4—Application 31
Airports (Transitional) Act
1996 36
Income Tax (Transitional Provisions) Act
1997 36
Tax Law Improvement Act
1997 37
Part 1—Amendment of the Income Tax Assessment Act
1997 38
Part 2—Amendment of the Income Tax Assessment Act
1936 43
Income Tax Assessment Act
1936 45
Income Tax Assessment Act
1936 46
Income Tax Assessment Act
1997 46
A Bill for an Act to amend the law relating to taxation,
and for related purposes
The Parliament of Australia enacts:
This Act may be cited as the Taxation Laws Amendment Act (No. 6)
1999.
(1) Subject to subsection (2), this Act commences on the day on which it
receives the Royal Assent.
(2) Item 2 of Schedule 7 commences immediately after the commencement of
Schedule 5.
Subject to section 2, 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Act is amended or repealed as set out in the applicable items in the Schedule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.
Section 170 of the Income Tax Assessment Act 1936 does not prevent
the amendment of an assessment made before the commencement of this section for
the purposes of giving effect to this Act.
Part
1—Insertion of new Division
in the Income Tax Assessment Act 1997
Repeal the link note, substitute:
[The next Division is Division 380.]
Table of Subdivisions
Guide to Division 380
380-A Deductions for capital expenditure on spectrum licences
380-B Partial realisation of spectrum licences
380-C Replacement of spectrum licences
380-D Balancing adjustments
380-E Application of the Common rules
380-F Adjustments affecting your deductions under this Division
This
Division creates a capital allowance for expenditure incurred in obtaining a
spectrum licence that you use for the purpose of producing assessable
income.
Note 1: In some cases, you get a deduction even if you
obtained the spectrum licence for nothing.
Note 2: Division 40 sets out an overview of capital
allowances. Division 41 sets out the Common rules that can affect capital
allowances (see also Subdivision 380-E).
In certain cases, an amount is included in your assessable income to
reverse the effect of past deductions.
Table of sections
380-10 When
can you deduct your expenditure?
380-15 How much can you deduct?
380-20 What is your unrecouped
expenditure?
380-25 What is your expenditure?
(1) You can deduct an amount for the
*current year for your
*expenditure incurred in obtaining a
*spectrum licence if you used the spectrum
licence in that year for the *purpose of
producing assessable income.
(2) However, you cannot deduct an amount under this section if, in the
*current year or an earlier income
year:
(a) you ceased to hold the *spectrum
licence when it was *replaced by another
spectrum licence that you held after the replacement; or
(b) a *balancing adjustment event
happened at a time when you held the *spectrum
licence.
Note 1: For the replacement of spectrum licences, see
Subdivision 380-C. If some or all of the spectrum licence was replaced in the
current year, you may be able to deduct an amount under that Subdivision whether
or not you ceased to hold the spectrum licence when that
happened.
Note 2: If a balancing adjustment event happened in the
current year, you may be able to deduct an amount because of the balancing
adjustment that you must make: see Subdivision 380-D.
Note 3: You can deduct an amount under this section even if
you have assigned part of the spectrum licence, or part of it is resumed by the
ACA. The effect of such partial realisations is set out in Subdivision
380-B.
Note 4: Once you have a deduction under this section, an
amount may be included in your assessable income under Subdivision 380-B, 380-C
or 380-D.
The amount you can deduct for the
*current year is worked out as
follows.
How much you can deduct
Step 1. Divide your *unrecouped
expenditure on the *spectrum licence at the end
of the current year by the number of income years from the start of the current
year to the end of the income year in which the spectrum licence
expires.
Step 2. Work out the number of days in the current year on which you
used the spectrum licence for the *purpose of
producing assessable income.
Step 3. Divide the result in step 2 by the number of days in the
current year.
Step 4. Multiply the results in steps 1 and 3. This is the amount
that you can deduct for the current year under section 380-10.
(1) Your unrecouped expenditure on a
*spectrum licence starts as your
*expenditure incurred in obtaining the spectrum
licence, but is reduced over time. (It can also be increased later.)
(2) Immediately after the end of an income year, it is reduced by the
amount you can deduct under section 380-10 for the
*expenditure for that income year.
(3) The table shows the other provisions that reduce or increase your
unrecouped expenditure.
|
Reducing or increasing unrecouped expenditure |
||
|---|---|---|
|
Item |
For this situation: |
See: |
|
1 |
A partial realisation of the spectrum licence may reduce it |
Subdivision 380-B |
|
2 |
A replacement of some or all of the spectrum licence may reduce
it |
Subdivision 380-C |
|
3 |
A balancing adjustment reduces it to nil |
Subdivision 380-D |
|
4 |
A variation of the spectrum licence to increase the part of the spectrum
specified may increase it |
Section 380-105 |
(1) Your expenditure incurred in obtaining a
*spectrum licence is worked out using the
table. If more than one case in the table applies, use the expenditure in the
last applicable case. (It does not matter whether an event described
happened in the *current year or
earlier.)
(2) However, your expenditure does not include an
amount that you have deducted or can deduct, or that has been or will be taken
into account in working out an amount you have deducted or can deduct:
(a) under this Division in respect of another
*spectrum licence; or
(b) under another Division of this Act.
|
Your expenditure on the spectrum licence |
|||
|---|---|---|---|
|
Case |
If you hold the spectrum licence at the end of the current year
because: |
Your expenditure on the spectrum licence is: |
But it may be adjusted by: |
|
1 |
the spectrum licence was originally issued to you |
the capital expenditure you incurred in obtaining the spectrum
licence |
Common rule 2 (non-arm’s length transactions: see section
380-95) |
|
2 |
the spectrum licence was originally issued to you because some or all of
another spectrum licence, that you held but had never used for the
*purpose of producing assessable income, was
resumed by the *ACA under Division 6 of Part
3.2 of the Radiocommunications Act 1992 |
so much of the difference between: as is reasonably attributable to the *part
of the *spectrum specified in the spectrum
licence |
not applicable |
|
3 |
it is a *new spectrum licence originally
issued to you to *replace some or all of an
*old spectrum licence (see also Subdivision
380-C) |
the sum of: |
not applicable |
|
4 |
the spectrum licence was assigned to you |
the capital expenditure you incurred in obtaining the spectrum
licence |
section 380-110 (non-arm’s length transactions) |
|
5 |
the spectrum licence was assigned to you with other property and no
separate consideration was allocated to the spectrum licence |
so much of the capital expenditure you incurred in obtaining the spectrum
licence with the other property as is reasonably attributable to the spectrum
licence |
section 380-110 (non-arm’s length transactions) |
|
6 |
the spectrum licence was assigned to you by an entity for no
consideration |
the sum of that entity’s *unrecouped
expenditure on the spectrum licence, just before the assignment took effect and
the capital expenditure (if any) you incurred in obtaining the spectrum
licence |
section 380-115 (assignment of part of a spectrum licence) |
|
7 |
the spectrum licence was assigned to you for no consideration by an entity
that: |
a nil amount |
not applicable |
|
8 |
a *balancing adjustment event happened
that is covered by item 3 (about partial changes of ownership) in the table in
subsection 380-80(3) |
the spectrum licence’s market value at the time of the
event |
not applicable |
|
9 |
a *balancing adjustment event happened to
which Common rule 1 applies (see section 380-100) |
the transferor’s *unrecouped
expenditure on the spectrum licence just before the event |
not applicable |
If you partially realise a spectrum licence, the amount arising reduces
your unrecouped expenditure on the spectrum licence, and therefore reduces your
future deductions.
However, the replacement of some or all of your spectrum licence with
another spectrum licence that you hold is not a partial realisation. Instead,
Subdivision 380-C applies.
Depending on how much the amount arising is, an amount may also be included
in your assessable income (to reverse the effect of past deductions).
Note: The full realisation of a spectrum licence may be a
balancing adjustment event (see Subdivision 380-D).
Table of sections
Operative provisions
380-35 Amount arising from the partial
realisation
380-40 What are the effects of the partial
realisation?
380-45 Spectrum licence after the partial
realisation
[This is the end of the Guide.]
(1) A partial realisation of a
*spectrum licence is an event described in
column 2 of an item in the table.
(2) However, the *replacement of some or
all of a *spectrum licence with another
spectrum licence that you hold after the replacement is not a
partial realisation of the first-mentioned spectrum licence.
Instead, Subdivision 380-C applies.
(3) The amount arising from the partial realisation is the
amount in column 3 of the applicable item in the table. (If more than one item
applies, use the amount in the last applicable item.)
(4) However, the amount arising from the
*partial realisation does not include
any amount that is *ordinary income.
|
Partial realisation of a spectrum licence |
||
|---|---|---|
|
Item |
Event that is a partial realisation |
Amount arising from it |
|
1 |
you assign part of the spectrum licence |
the amount (if any) paid to you for the part less your expenses reasonably
attributable to the assignment |
|
2 |
you assign part of the spectrum licence with other property, and no
separate consideration is allocated to the part |
the portion of the consideration that is reasonably attributable to the
part, less the same portion of your expenses reasonably attributable to the
assignment |
|
3 |
you assign part of the spectrum licence for no consideration |
so much of your *unrecouped expenditure on
the spectrum licence as is reasonably attributable to the part |
|
4 |
you assign part of the spectrum licence to an entity with which you are not
dealing at *arm’s length, for no
consideration or for less than the part’s market value at the time of the
assignment |
the greater of: |
|
5 |
part of the spectrum licence is resumed under Division 6 of Part 3.2 of the
Radiocommunications Act 1992 |
the amount of compensation paid to you under section 93 of that
Act |
(1) You work out the effects of a
*partial realisation by comparing:
(a) the *amount arising from the partial
realisation; and
(b) your *unrecouped expenditure on the
*spectrum licence just before the partial
realisation.
(2) If the *amount arising from the
*partial realisation does not exceed
your *unrecouped expenditure, your unrecouped
expenditure is reduced by that amount at the time of the
*partial realisation.
(3) On the other hand, if the *amount
arising from the *partial realisation
exceeds your *unrecouped expenditure,
then:
(a) your unrecouped expenditure is reduced to nil (if it is not nil
already) at the time of the partial realisation; and
(b) the excess is included in your assessable income for the income year
of the partial realisation.
(4) However, the amount included in your assessable income cannot
exceed:
• the total of each amount (if any) you can deduct or have deducted
for the *spectrum licence for the
*current year or an earlier income year under
this Division;
reduced by:
• the total of each amount (if any) included in your assessable
income for an income year, in respect of the spectrum licence, under this
Division.
Note: An amount may be included in your assessable income
under this section (because of a previous partial realisation), under section
380-70 (because of a replacement) or under section 380-85 (because of a
balancing adjustment event).
To avoid doubt, this Division applies as if the
*spectrum licence as varied because of the
*partial realisation were the same spectrum
licence as before the partial realisation.
If some or all of your spectrum licence (whether or not you still hold it)
is replaced by another spectrum licence that you hold after the replacement,
your unrecouped expenditure on the first-mentioned spectrum licence is
reduced.
You may be entitled to deduct an amount in respect of that spectrum
licence, or be required to include an amount in your assessable income (to
reverse the effect of past deductions).
Table of sections
Operative provisions
380-55 Application of Subdivision
380-60 Amount arising from the replacement
380-65 Effect if the amount arising does not exceed your
unrecouped expenditure
380-70 Effect if the amount arising exceeds your unrecouped
expenditure
380-75 Old spectrum licence varied because of the
replacement
[This is the end of the Guide.]
(1) This Subdivision applies if some or all of a
*spectrum licence (the old spectrum
licence) is *replaced in the
*current year by another spectrum licence (the
new spectrum licence).
Note 1: The new spectrum licence is treated in the same way
as any other spectrum licence. If it was issued to you at the time of the
replacement, Case 3 in the table in subsection 380-25(2) tells you what your
expenditure is. But, if you held it before the replacement, your unrecouped
expenditure may be adjusted by section 380-105.
Note 2: The consequences may differ depending on whether you
continue to hold the old spectrum licence.
(2) Some
or all of an *old spectrum licence is
replaced by a *new spectrum
licence if:
(a) you held the old spectrum licence when some or all of it was assigned
or resumed under Division 5 or 6 of Part 3.2 of the Radiocommunications Act
1992; and
(b) you held the new spectrum licence when any of the
*part of the
*spectrum that was, just before the assignment
or resumption, specified in the old spectrum licence is first specified in the
new spectrum licence; and
(c) none of that part of the spectrum was specified in any other spectrum
licence in the interim; and
(d) you used the old spectrum licence in the
*current year or an earlier income year for the
*purpose of producing assessable
income.
(1) If the *new spectrum licence
*replaces some or all of an
*old spectrum licence that is resumed under
Division 6 of Part 3.2 of the Radiocommunications Act 1992, the
amount arising from the replacement is the amount of compensation
paid to you under section 93 of that Act in respect of that
resumption.
Note: The amount arising does not include any ordinary
income (see subsection (3)).
(2) If the *new spectrum licence
*replaces part of an
*old spectrum licence that you assigned under
Division 5 of Part 3.2 of that Act, the amount arising from the
replacement is the amount in column 3 of the applicable item in the following
table. (If more than one item applies, use the amount in the last
applicable item.)
(3) However, the amount arising from the
*replacement (under subsection (1) or (2)) does
not include any amount that is *ordinary
income.
|
Amount arising when partly assigned |
||
|---|---|---|
|
Item |
You assigned part of the old spectrum licence: |
Amount arising from the replacement |
|
1 |
for consideration |
the amount (if any) paid to you for the part less your expenses reasonably
attributable to the assignment |
|
2 |
with other property and no separate consideration was allocated to the
part |
the portion of the consideration that is reasonably attributable to the
part, less the same portion of your expenses reasonably attributable to the
assignment |
|
3 |
for no consideration |
so much of your *unrecouped expenditure on
the old spectrum licence as is reasonably attributable to the part |
|
4 |
to an entity with which you are not dealing at
*arm’s length, for no consideration or
for less than the part’s market value at the time of the
assignment |
the greater of: |
(1) This section sets out the effect of
*replacing some or all of an
*old spectrum licence if the
*amount arising from the replacement does
not exceed your *unrecouped expenditure
on the old spectrum licence just before the replacement.
(2) Your *unrecouped expenditure is
reduced by the *amount arising from the
*replacement when the replacement
happens.
(3) Work out how much of your remaining
*unrecouped expenditure on the
*old spectrum licence is reasonably
attributable to the *part of the
*spectrum specified in the
*new spectrum licence.
Note: This amount is also used to work out your expenditure
on the new spectrum licence. See Case 3 in the table in subsection
380-25(2).
(4) If you continue to hold the *old
spectrum licence after the *replacement, your
*unrecouped expenditure is further reduced (but
not beyond nil) by the amount in subsection (3) when the replacement
happens.
(5) On the other hand, if you no longer hold the
*old spectrum licence after the
*replacement, your
*unrecouped expenditure is further reduced to
nil (if it is not nil already) just after the replacement.
(6) Whether or not you continue to hold the
*old spectrum licence after the
*replacement, if you used it in the
*current year before that happened for the
*purpose of producing assessable income, you
can deduct for the current year the amount worked out as follows.
How much you can deduct
Step 1. Divide the amount in subsection (3) by the number of income
years from the start of the current year to the end of the income year in which
the old spectrum licence expires or would have expired if it hadn’t been
replaced.
Step 2. Work out the number of days in the current year before the
replacement on which you used the old spectrum licence for the purpose of
producing assessable income.
Step 3. Divide the result in step 2 by the number of days in the
current year.
Step 4. Multiply the results in steps 1 and 3. This is the amount
you can deduct under this section.
Note: You
may also be able to deduct an amount for the current year under section 380-10
if you continue to hold the old spectrum licence after the
replacement.
(1) This section sets out the effect of
*replacing some or all of an
*old spectrum licence if the
*amount arising from the replacement
exceeds your *unrecouped expenditure on
the old spectrum licence just before the replacement.
(2) Your *unrecouped expenditure is
reduced to nil (if it is not nil already) when the
*replacement happens, and the excess is
included in your assessable income for the income year in which that
happens.
(3) However, the amount included in your assessable income cannot
exceed:
• the total of each amount (if any) you can deduct or have deducted
for the *old spectrum licence for the
*current year or an earlier income year under
this Division;
reduced by:
• the total of each amount (if any) included in your assessable
income for an income year, in respect of the old spectrum licence, under this
Division.
Note: An amount may be included in your assessable income
under this section (because of a previous replacement), under section 380-40
(because of a partial realisation) or under section 380-85 (because of a
balancing adjustment event).
To avoid doubt, this Division applies as if an
*old spectrum licence that you continue to hold
after it is varied because of a *replacement
were the same spectrum licence as before it was varied.
Table of sections
380-80 When
a balancing adjustment is required
380-85 How to do the balancing adjustment
380-90 Meaning of termination value
(1) A balancing adjustment is required if:
(a) you have incurred *expenditure in
obtaining a *spectrum licence; and
(b) you have ever used the spectrum licence for the
*purpose of producing assessable income;
and
(c) a *balancing adjustment event happens
in the *current year at a time when you hold
the spectrum licence.
(2) However, a balancing adjustment is not required if:
(a) some or all of the *spectrum licence
is *replaced by another spectrum licence that
you hold after the replacement (Subdivision 380-C applies instead); or
(b) roll-over relief is available under Common rule 1 (see Subdivision
380-E).
(3) A balancing adjustment event is an event listed in the
table.
|
Balancing adjustment events |
|
|---|---|
|
Item |
Event |
|
1 |
You assign the *spectrum licence under
Division 5 of Part 3.2 of the Radiocommunications Act 1992 (except by a
*partial realisation) |
|
2 |
The spectrum licence ceases to exist because it expires, is cancelled, or
is resumed by the *ACA |
|
3 |
Another entity becomes the licensee, but an entity that was the licensee
(alone or with others) immediately beforehand still has an interest in the
spectrum licence immediately afterwards |
(1) You make the adjustment by comparing:
(a) the *spectrum licence’s
*termination value; and
(b) your *unrecouped expenditure on the
spectrum licence just before the *balancing
adjustment event.
(2) If the *termination value
exceeds your *unrecouped expenditure,
the excess is included in your assessable income. However, the amount included
cannot be more than:
• the total of the amounts (if any) you have deducted or can deduct
for earlier income years under this Division for the
*spectrum licence;
reduced by:
• the total of each amount (if any) included in your assessable
income for an income year, in respect of the spectrum licence, under this
Division.
Note 1: An amount may be included in your assessable income
under section 380-40 (because of a partial realisation) or under section 380-70
(because of a replacement).
Note 2: If roll-over relief under Common rule 1 has
previously applied to the spectrum licence: see section 41-40 and subsections
380-100(3) and (4).
Note 3: Subsection (4) of this section reduces your
unrecouped expenditure to nil at the time of the balancing adjustment
event.
(3) If the *termination value is less
than your *unrecouped expenditure, and you
used the *spectrum licence in the
*current year for the
*purpose of producing assessable income, you
can deduct for the current year the amount worked out as follows.
How much you can deduct
Step 1. Subtract the termination value from your unrecouped
expenditure.
Step 2. Work out the number of days in the current year before the
*balancing adjustment event on which you used
the spectrum licence for the purpose of producing assessable income.
Step 3. Divide that number by the number of days in the current year
before the *balancing adjustment
event.
Step 4. Multiply the results in steps 1 and 3. This is the amount
you can deduct under this section.
(4) Your *unrecouped expenditure is
reduced to nil (if it is not nil already) at the time of the
*balancing adjustment event (even if the
*termination value equals your unrecouped
expenditure).
Note: If the termination value equals your unrecouped
expenditure, the balancing adjustment has no effect on your assessable income or
deductions.
(1) The *spectrum licence’s
termination value is worked out using the table. (If more than one
case in the table applies, use the termination value in the last
applicable case.)
(2) However, the termination value is reduced if:
(a) the *balancing adjustment event is an
assignment or resumption of the *spectrum
licence; and
(b) some or all of what you receive for the assignment or resumption is
*ordinary income.
It is reduced by the amount of ordinary income.
|
Termination value of a spectrum licence |
||
|---|---|---|
|
Case |
In this situation: |
The termination value is: |
|
1 |
you assign the spectrum licence |
the consideration less your expenses reasonably attributable to the
assignment |
|
2 |
you assign the spectrum licence with other property, and no separate
consideration is allocated to the spectrum licence |
the part of the consideration that is reasonably attributable to the
spectrum licence, less the same part of your expenses reasonably attributable to
the assignment |
|
3 |
you assign the spectrum licence to another entity for no
consideration |
your *unrecouped expenditure on the
spectrum licence just before the *balancing
adjustment event |
|
4 |
you assign the spectrum licence to an entity with which you are not
dealing at *arm’s length, for no
consideration or for less than the spectrum licence’s market value at the
time of the *balancing adjustment
event |
the greater of: |
|
5 |
the spectrum licence ceases to exist because it expires or is
cancelled |
a nil amount |
|
6 |
the spectrum licence ceases to exist because it is resumed by the
*ACA under Division 6 of Part 3.2 of the
Radiocommunications Act 1992 |
the amount of compensation paid to you under section 93 of that
Act |
|
7 |
the balancing adjustment is required because of item 3 (about partial
changes of ownership) in the table in subsection 380-80(3) |
the spectrum licence’s market value at the time of the
*balancing adjustment event |
Note: If
Case 7 applies and the parties jointly elect for roll-over relief under
subsection 380-100(2), a balancing adjustment is not required.
Table of sections
380-95 Application
of Common rules in Division 41
380-100 Common rule 1 (roll-over relief for related
entities)
These Common rules apply to your
*expenditure incurred in obtaining a
*spectrum licence:
(a) Common rule 1 (roll-over relief for related entities), but with the
qualifications and modifications set out in section 380-100;
(b) Common rule 2 (non-arm’s length transactions), but only if that
expenditure is worked out using Case 1 in the table in subsection
380-25(2).
Note: Non-arm’s length transactions are also dealt
with in section 380-110.
(1) Common rule 1 does not apply to a
*partial realisation, or to a
*replacement, of a
*spectrum licence.
(2) Roll-over relief is also available if:
(a) a *balancing adjustment event happens
that is covered by item 3 (about partial changes in interests) in the table in
subsection 380-80(3); and
(b) the entity or entities that held the
*spectrum licence just before the change (the
transferor) and the entity or entities that held the
*spectrum licence just after the change (the
transferee) jointly elect for roll-over relief.
Note: For the conditions relating to the election, see
section 41-55.
Modifications of Common rule 1
(3) Disregard subsection 41-40(3) (about the transferee being taken to
have incurred the transferor’s expenditure).
Note: This is because the transferee’s expenditure on
the spectrum licence is dealt with in the table in subsection 380-25(2) and is
based on the transferor’s unrecouped expenditure immediately before the
roll-over event.
(4) Instead, the balancing adjustment is affected in this way:
(a) the total of each amount (if any) that section 380-40 or 380-70 has
included in the transferor’s assessable income for an income year (because
of a *partial realisation, or
*replacement, of the
*spectrum licence); or
(b) if there have been 2 or more prior applications of Common rule
1—the total of each amount (if any) that section 380-40 or 380-70 has
included in the assessable income of any of the transferors for an income year
in respect of the spectrum licence;
is taken to have been included by that section in the assessable income of
the transferee for that income year.
(5) The obligation in subsection 41-50(4) applies to the transferee as if
the period for keeping the notice referred to in that subsection were until the
end of 5 years after the next *balancing
adjustment event occurs for the *spectrum
licence.
(6) The obligation in subsection 41-55(5) applies to the transferee as if
the period for keeping the election referred to in that subsection or a copy of
it were until the end of 5 years after the next
*balancing adjustment event occurs for the
*spectrum licence.
Increasing
your unrecouped expenditure
380-105 Variation of spectrum licence to increase
spectrum
Adjusting your expenditure on the spectrum licence
380-110 Spectrum licence acquired in a non-arm’s
length transaction
380-115 Assignment of part of a spectrum licence for no
consideration
(1) This section applies if a *spectrum
licence is varied to increase the *part of the
*spectrum specified in it.
(2) Your *unrecouped expenditure on the
varied *spectrum licence is increased, at the
time of the variation, by:
(a) the amount of capital expenditure you incurred in obtaining the
additional part of the *spectrum; or
(b) if the spectrum licence is varied to
*replace some or all of an
*old spectrum licence—the amount in
subsection 380-65(3) if that subsection applies to the old spectrum licence,
reduced by the amount (if any) you can deduct under subsection
380-65(6).
Note: If subsection 380-65(3) does not apply to the old
spectrum licence, your unrecouped expenditure is not increased at
all.
(3) However, if:
(a) an entity assigned the additional
*part of the
*spectrum to you and you were not dealing with
each other at *arm’s length;
and
(b) the consideration for the assignment is greater than the additional
part’s market value when it was assigned to you;
your *unrecouped expenditure is instead
only increased by that market value.
(1) Your *expenditure incurred in
obtaining a *spectrum licence may be adjusted
as set out in this section if:
(a) your expenditure would otherwise be worked out using Case 4 or 5 in
the table in subsection 380-25(2); and
(b) you and the entity that assigned to you the spectrum licence did not
deal with each other at *arm’s
length.
(2) If you hold the spectrum licence as a result of the entity assigning
to you all of a spectrum licence held by the entity, compare your
*expenditure, worked out using the applicable
case, with:
(a) that entity’s *unrecouped
expenditure just before the assignment; and
(b) the spectrum licence’s market value when it was assigned to
you.
(3) On the other hand, if you hold the spectrum licence as a result of the
entity assigning to you only part of a spectrum licence held by the
entity, compare your *expenditure, worked out
using the applicable case, with:
(a) so much of that entity’s
*unrecouped expenditure just before the
assignment as is reasonably attributable to the part assigned to you;
and
(b) the part’s market value when it was assigned to you.
(4) If your *expenditure incurred in
obtaining the *spectrum licence, worked out
using the applicable case, is more than either of the amounts that you compare
it with under subsection (2) or (3), your expenditure is instead taken to be the
lesser of those amounts.
If:
(a) you would otherwise work out your
*expenditure incurred in obtaining a
*spectrum licence under Case 6 in the table in
subsection 380-25(2); and
(b) you hold the spectrum licence as a result of an entity assigning to
you only part of a spectrum licence held by the entity;
your expenditure incurred in obtaining the spectrum licence
is instead so much of that entity’s
*unrecouped expenditure, just before assigning
the part to you, as is reasonably attributable to that part.
[The next Division is Division 385.]
Part
2—Consequential
amendments
Income
Tax Assessment Act 1936
2
Subsection 6(1) (after paragraph (db) of the definition of
royalty)
Insert:
(dc) the use of, or the right to use, some or all of the part of the
spectrum (within the meaning of the Radiocommunications Act 1992)
specified in a spectrum licence issued under that Act;
3
Subsection 6(1) (subparagraph (f)(iib) of the definition of
royalty)
Omit “or” (last occurring).
4
Subsection 6(1) (after subparagraph (f)(iib) of the definition of
royalty)
Insert:
(iic) the use of, or the granting of the right to use, some or all of such
part of the spectrum specified in a spectrum licence as is mentioned in
paragraph (dc); or
Insert:
eligible spectrum licence means a spectrum licence, within
the meaning of Division 380 of the Income Tax Assessment Act 1997, in
relation to which there has been incurred capital expenditure specified in
Subdivision 380-A of that Act.
6
Subsection 159GE(1) (definition of
eligible capital expenditure
property)
Omit all the words after “Division 10AAA property”, substitute
“, Division 10C or 10D property or eligible spectrum
licences”.
7
Subsection 159GE(1) (paragraph (c) of the definition of
eligible
property)
Omit “or”.
8
Subsection 159GE(1) (at the end of the definition of
eligible
property)
Add:
; or (e) eligible spectrum licences.
Add:
(6) In this Division, a reference to the residual amount at a particular
time in relation to an amount of expenditure because of which an item of
property is an eligible spectrum licence is a reference to the amount of
unrecouped expenditure (within the meaning of section 380-20 of the Income
Tax Assessment Act 1997) on that licence at that time.
10
At the end of section 159GJ
Add:
(5) If this Division applies in relation to an item of property that is an
eligible spectrum licence:
(a) an amount cannot be deducted under Division 380 of the Income Tax
Assessment Act 1997 in relation to any amount of expenditure (other than
expenditure incurred after the application period) by reason of which the item
is an eligible spectrum licence for any year of income in which any of the
application period occurs; and
(b) the residual amount at any time after the application period (but
before the start of a later application period) in relation to an amount of
expenditure (other than expenditure incurred after the application period)
because of which the item is an eligible spectrum licence is an amount equal
to:
• the amount that, if not for this paragraph, would be the residual
amount at that time in relation to the amount of expenditure under subsection
159GF(6);
reduced by:
• an amount equal to the total notional principal in relation to the
amount of expenditure in relation to the application period and any prior
application period; and
(c) for the purposes of applying Division 380 of the Income Tax
Assessment Act 1997 in relation to an amount of expenditure (other than
expenditure incurred after the application period) because of which the item is
an eligible spectrum licence at any time after the application period, a
deduction under that Division is taken to have been allowed, for the amount of
expenditure, of an amount equal to the total notional principal in relation to
the amount of expenditure in relation to the application period.
11
Subsection 245-140(1) of Schedule 2C (at the end of the
table)
Add:
|
Expenditure incurred in obtaining a spectrum licence to produce assessable
income |
Division 380 of the Income Tax Assessment Act 1997 |
12
Subsection 57-85(3) of Schedule 2D (before table item 15)
Insert:
|
14B |
Spectrum licences |
Subdivision 380-A |
|
13
Subsection 57-110(2) of Schedule 2D (after table item 8)
Insert:
|
8A |
Spectrum licences |
Subdivisions 380-B, 380-C and 380-D |
Subdivision 380-A |
Income
Tax Assessment Act 1997
14
Section 10-5 (after table item headed
“software”)
Insert:
|
spectrum licences |
|
|
|
amount arising from partial realisation of |
Subdivision 380-B |
|
|
amount arising from replacement of |
Subdivision 380-C |
|
|
balancing adjustment relating to |
Subdivision 380-D |
|
15
Section 12-5 (table item headed “balancing
adjustment”)
After “research & development,”, insert
“spectrum licences,”.
16
Section 12-5 (before table item headed
“superannuation”)
Insert:
|
spectrum licences |
|
|
|
amount arising from replacement of |
Subdivision 380-C |
|
|
balancing adjustment relating to |
Subdivision 380-D |
|
|
capital allowance for expenditure incurred in obtaining |
Subdivision 380-A |
|
17
Section 20-30 (after table item 1.12)
Insert:
|
1.12A |
Subdivisions 380-A and 380-C |
capital expenditure incurred in obtaining a spectrum licence |
18
Section 40-30 (after table item dealing with
“software”)
Insert:
|
Spectrum licences |
Capital expenditure incurred in obtaining a spectrum licence to produce
assessable income |
Any entity |
The duration of the licence |
Balancing adjustment required |
Division 380 |
|---|
19
Section 41-5 (after table item dealing with
“Software—other”)
Insert:
|
Spectrum licences |
Applies as modified by section 380-100 |
Applies as modified by section 380-95 |
Does not apply |
Does not apply |
20
Subsection 41-23(1) (at the end of the table)
Add:
|
6.1 |
Spectrum licences |
the transferor and transferee jointly elect for it |
Subsection 380-100(2) |
Insert:
ACA has the meaning given by section 5 of the
Radiocommunications Act 1992.
22
Subsection 995-1(1) (definition of
amount arising)
Repeal the definition, substitute:
amount arising:
(a) from a *partial realisation of an
item of *intellectual property—has the
meaning given by section 373-45; and
(b) from a *partial realisation of a
*spectrum licence—has the meaning given
by section 380-35; and
(c) from a *replacement of some or all of
a *spectrum licence—has the meaning given
by section 380-60.
23
Subsection 995-1(1) (at the end of the table in the definition of
balancing adjustment
event)
Add:
|
3 |
Spectrum licences |
subsection 380-80(3) |
24
Subsection 995-1(1) (definition of
expenditure)
Repeal the definition, substitute:
expenditure:
(a) on an item of *intellectual
property—has the meaning given by section 373-30; and
(b) incurred in obtaining a *spectrum
licence—has the meaning given by section 380-25.
Insert:
new spectrum licence has the meaning given by subsection
380-55(1).
Insert:
old spectrum licence has the meaning given by subsection
380-55(1).
27
Subsection 995-1(1) (definition of
partial
realisation)
Repeal the definition, substitute:
partial realisation:
(a) of an item of *intellectual
property—has the meaning given by section 373-45; and
(b) of a *spectrum licence—has the
meaning given by section 380-35.
Insert:
part of the *spectrum
specified in a *spectrum licence has
the meaning given by section 5 of the Radiocommunications Act
1992.
Insert:
replace some or all of a spectrum licence has the meaning
given by subsection 380-55(2).
Insert:
spectrum has the meaning given by section 5 of the
Radiocommunications Act 1992.
Insert:
spectrum licence has the meaning given by
section 5 of the Radiocommunications Act 1992.
32
Subsection 995-1(1) (after table item 3 in the definition of
termination
value)
Insert:
|
3A |
Spectrum licences |
section 380-90 |
33
Subsection 995-1(1) (at the end of the table in the definition of
unrecouped
expenditure)
Add:
|
3 |
Spectrum licences |
section 380-20 |
Part
3—International Tax
Agreements Act 1953
Insert:
(11A) If:
(a) the licensee of a spectrum licence (within the meaning of the
Radiocommunications Act 1992), or a person authorised under section 68 of
that Act by the licensee, derives income from operating radiocommunications
devices (within the meaning of that Act) under the licence or from authorising
others to do so; and
(b) the licensee or authorised person is a resident of a country with
which, or with the government of which, Australia, or the Government of
Australia, has made an agreement before this subsection commences; and
(c) under the agreement, the income is to be dealt with in accordance with
the business profits article of the agreement referred to in paragraph
3(11)(b);
for the purpose of determining whether the income may be taxed in Australia
in accordance with the business profits article:
(d) the licensee or authorised person is taken to carry on a business,
through a permanent establishment, in Australia; and
(e) the income is taken to be attributable to that permanent
establishment.
Omit “subsection (11)”, substitute “subsections (11) and
(11A)”.
The amendments made by this Schedule apply to spectrum licences obtained on
or after 11 March 1998.
Omit “Except where the gaps follow a regular pattern, notes
are”, substitute “Where the reason for a gap is not apparent, a note
is”.
2 Subsection 20-20(2)
Omit “An amount you receive”, substitute “An amount you
have received”.
3 Paragraph 20-20(2)(a)
Omit “receive”, substitute “received”.
4 Subsection 20-20(3)
Omit “An amount you receive”, substitute “An amount you
have received”.
5 After subsection 41-30(2)
Insert:
(2A) If the transferee gains the entitlement, the transferee cannot also
deduct under the rules for the *capital
allowance any expenditure incurred in order for the transferee to acquire the
property or otherwise become its owner or
*quasi-owner.
6 Section 42-315
After “over land”, insert “granted by an
*exempt Australian government agency or an
*exempt foreign government
agency”.
7 Section 42-315
After “a grant”, insert “(by such an
agency)”.
8 Section 50-25 (table item
5.2)
Omit “a *Commonwealth law”,
substitute “an *Australian
law”.
9 Before section 70-1
Insert:
10 Paragraph 70-100(10)(a)
Omit “transferee”, substitute
“transferor”.
11 Section 70-110 (example
2)
Omit “purposes: see Subdivision 42-B”, substitute
“purposes (see Subdivision 42-B) and the item’s cost base for CGT
purposes (see Division 110)”.
12 Section 385-5 (table item
1)
Omit “60-D”, substitute
“70-D”.
13 Section 385-5 (table item
2)
Omit “60-D”, substitute “70-D”.
14 Subsection 387-305(1) (note
2)
Repeal the note, substitute:
Note 2: If an amount of the expenditure is recouped, the
amount may be included in your assessable income. See Subdivision
20-A.
15 Subsection 387-355(2) (note
1)
Omit “sections 387-370”, substitute “section
387-370”.
16 Application
The amendments made by this Schedule apply to assessments for the 1997-98
income year and later income years.
1 After subsection 75B(3C)
Insert:
(3D) Subsection (4) does not apply to an amount received in the 1997-98
year of income or a later year of income if the amount is received as recoupment
as defined by section 20-25 of the Income Tax Assessment Act
1997.
Note: Subdivision 20-A of the Income Tax Assessment Act
1997 applies instead.
2 Subsection 82KH(1ABA)
Omit “63 of this Act or section 8-1”, substitute “8-1 or
25-35”.
3 Before subsection 122T(1)
Insert:
(1A) This section does not apply to an amount received in the 1997-98 year
of income or a later year of income if the amount is received as recoupment as
defined by section 20-25 of the Income Tax Assessment Act 1997.
Note: Subdivision 20-A of the Income Tax Assessment Act
1997 applies instead.
4 Before subsection 123A(2)
Insert:
(1H) Subsections (2) and (3) do not apply to an amount received in the
1997-98 year of income or a later year of income if the amount is received as
recoupment as defined by section 20-25 of the Income Tax Assessment Act
1997.
Note: Subdivision 20-A of the Income Tax Assessment Act
1997 applies instead.
5 Before subsection
123BD(4)
Insert:
(3A) Subsections (4) and (5) do not apply to an amount received in the
1997-98 year of income or a later year of income if the amount is received as
recoupment as defined by section 20-25 of the Income Tax Assessment Act
1997.
Note: Subdivision 20-A of the Income Tax Assessment Act
1997 applies instead.
6 Before subsection
124AQ(1)
Insert:
(1A) This section does not apply to an amount received in the 1997-98 year
of income or a later year of income if the amount is received as recoupment as
defined by section 20-25 of the Income Tax Assessment Act 1997.
Note: Subdivision 20-A of the Income Tax Assessment Act
1997 applies instead.
7 Paragraph 160ZK(1A)(a)
After “Part III”, insert “of”.
8 Paragraph 399A(2)(a)
Omit “63 of this Act or section 8-1”, substitute “8-1 or
25-35”.
9 Subsection 399A(5)
Omit “63 of this Act or section 8-1”, substitute “8-1 or
25-35”.
10 Subsection 413(3)
Omit “Division 10C or 10D of Part III”, substitute
“Division 43 of the Income Tax Assessment Act 1997 or Division 10C
or 10D of Part III of this Act”.
11 Application
The amendments made by this Schedule apply to assessments for the 1997-98
income year and later income years.
Airports
(Transitional) Act 1996
1 Subparagraph
49A(2)(a)(ii)
Omit “under subsection 42-310(2) of the Income Tax Assessment Act
1997”.
2 Paragraph 49A(2)(d)
Omit “42-310(2)(b) of that Act”, substitute “42-310(1)(b)
of the Income Tax Assessment Act 1997”.
3 Paragraph 49A(3)(c)
Omit “42-310(2)(b)”, substitute
“42-310(1)(b)”.
4 Paragraph 49A(3)(e)
Omit “acquisition of the lease”, substitute “acquisition
of the right”.
5 Application
The amendments made by items 1 to 4 apply to assessments for the 1997-98
income year and later income years.
Income
Tax (Transitional Provisions) Act 1997
6 Section 20-5 (after table item
2)
Insert:
|
2A |
122T |
General mining and quarrying expenditure |
|
2B |
123A(2) and (3) |
Expenditure on transporting minerals |
|
2C |
123BD(4) and (5) |
Expenditure on transporting quarry materials |
|
2D |
124AQ |
Petroleum mining expenditure |
7 Subsection 42-2(2)
Repeal the subsection, substitute:
(2) However, section 42-15 of the 1997 Act does not apply to allow you to
deduct an amount for depreciation of a ship for an income year if you calculate
the amount of a deduction in accordance with section 57AM of the 1936 Act for
the ship for that year.
Note: Depreciation deductions for these ships are allowable
under the 1936 Act: see subsection 53I(2) of the 1936 Act.
8 Paragraph 330-75(1)(d)
Repeal the paragraph.
9 After subsection
330-75(1)
Insert:
(1A) If:
(a) Common rule 1 applies as mentioned in subsection (1) of this section;
and
(b) any of the old recoupment provisions has applied to:
(i) the transferor; or
(ii) if there have been 2 or more prior applications of that Common
rule—any of the prior transferors of the property;
section 170 of the Income Tax Assessment Act 1936 does not stop the
Commissioner amending, at any time, an assessment of the transferee.
The amendments made by items 6 to 9 apply to assessments for the 1997-98
income year and later income years.
11 Items 120, 134 and 135 of Schedule
4
The items are taken never to have commenced.
Note: Those items are superseded by the amendments made by
items 2, 8 and 9 of Schedule 3 to this Act.
12 Item 43 of Schedule 8
The item is taken never to have commenced.
Note: The item is superseded by the amendment made by item 1
of Schedule 3 to this Act.
Part
1—Amendment of the Income
Tax Assessment Act 1997
1 Section 11-15 (table item headed
“education”)
Repeal the item, substitute:
|
education |
|
|
bursary, educational allowance etc. |
51-10 and 51-35 |
|
CRAFT scheme, employer’s income from |
51-10 |
|
foreign student, scholarship and bursary to |
23(ya) |
|
full-time student, income from a scholarship, bursary, other educational
allowance or educational assistance |
|
|
isolated child, income for the provision of education of |
51-10 and 51-40 |
|
secondary student, income for the provision of education of |
|
2 Section 11-15 (table item headed “social
security or like payments”)
Before:
|
disability services payment |
53-10 |
|
insert:
|
Commonwealth education or training payment |
Subdivision 52-F |
|
3 Section 51-10 (before table item
2.1)
Insert:
|
2.1A |
a full-time student at a school, college or university |
a scholarship, bursary, educational allowance or educational
assistance |
see section 51-35 |
|
2.1B |
(a) a student; or |
a payment under a Commonwealth scheme for assistance of: |
see section 51-40 |
4 Section 51-30 (link note)
Repeal the link note.
5 After section 51-30
Insert:
The following payments made to or on behalf of a full-time student at a
school, college or university are not exempt from income tax under item
2.1A of the table in section 51-10:
(a) a payment by the Commonwealth for assistance for secondary education
or in connection with education of isolated children;
(b) a *Commonwealth education or training
payment;
(c) a payment by a person or an authority on the condition that the
student will (or will if required) become, or continue to be, an employee of the
person or authority;
(d) a payment by a person or an authority on the condition that the
student will (or will if required) enter into, or continue to be a party to, a
contract with the person or authority that is wholly or principally for the
labour of the student;
(e) a payment under a scholarship where the scholarship is not provided
principally for educational purposes;
(f) an education entry payment under Part 2.13A of the Social Security
Act 1991.
Note: The whole or part of a Commonwealth education or
training payment may be exempt under Subdivision 52-F.
The following payments made to or on behalf of a student are not
exempt from income tax under item 2.1B of the table in section 51-10:
(a) a *Commonwealth education or training
payment;
(b) an education entry payment under Part 2.13A of the Social Security
Act 1991.
Note: The whole or part of a Commonwealth education or
training payment may be exempt under Subdivision 52-F.
6 At the end of Division 52
Add:
Table of sections
52-140 Supplementary amount of a Commonwealth education or
training payment is exempt
52-145 Meaning of Commonwealth education or training
payment
(1) This section tells you about the income tax treatment of a
*Commonwealth education or training
payment.
(2) The *supplementary amount of the
payment is exempt from income tax.
(3) The supplementary amount is the total of:
(a) so much of the payment as is included to assist you with, or to
reimburse you for, the costs of any one or more of the following:
(i) rent;
(ii) living in a remote area;
(iii) commencing employment;
(iv) travel to, or participation in, courses, interviews, education or
training;
(v) a child or children wholly or substantially dependent on
you;
(vi) telephone bills;
(vii) living away from your usual residence;
(viii) maintaining your usual residence while living away from that
residence;
(ix) accommodation, books or equipment;
(x) discharging a HEC assessment debt (within the meaning of
Chapter 4 of the Higher Education Funding Act 1988);
(xi) transport in travelling to undertake education or training, or to
visit your usual residence when undertaking education or training away from that
residence;
(xii) if you are disabled—acquiring any special equipment, services
or transport as a result of the disability;
(xiii) anything that would otherwise prevent you from beginning,
continuing or completing any education or training; and
(b) so much of the payment as is included by way of pharmaceutical
allowance.
(1) A Commonwealth education or training
payment is a payment by the Commonwealth, or in connection with a
payment by the Commonwealth, of an allowance or reimbursement:
(a) to or on behalf of a participant in a
*Commonwealth labour market program;
or
(b) to or on behalf of a student under:
(i) the scheme known as ABSTUDY; or
(ii) the scheme known as the Assistance for Isolated Children Scheme;
or
(iii) the scheme known as the Veterans’ Children Education
Scheme;
in respect of a period commencing at a time when the student was at least
16 years old.
(2) A Commonwealth labour market program is a program
administered by the Commonwealth under which:
(a) unemployed persons are given training in skills to improve their
employment prospects; or
(b) unemployed persons are assisted in obtaining employment or to become
self-employed; or
(c) employed persons are given training in skills and other assistance to
aid them in continuing to be employed by their current employer or in obtaining
other employment.
7 Subsection 995-1(1)
Insert:
Commonwealth education or training payment has the meaning
given by subsection 52-145(1).
8 Subsection 995-1(1)
Insert:
Commonwealth labour market program has the meaning given by
subsection 52-145(2).
9 Subsection 995-1(1) (table in the definition
of supplementary amount)
Repeal the table, substitute:
|
Supplementary amount of a payment |
||
|---|---|---|
|
Item |
Supplementary amount of this kind of payment: |
has the meaning given by: |
|
1 |
Commonwealth education or training payment |
section 52-140 |
|
2 |
Exceptional circumstances relief payment, or payment of restart income
support or farm household support |
section 53-15 |
|
3 |
Payment made because of the Veterans’ Entitlements (Transitional
Provisions and Consequential Amendments) Act 1986 |
section 52-105 |
|
4 |
Social security payment |
section 52-15 |
|
5 |
Veterans’ affairs payment |
section 52-70 |
10 Application of
amendments
The amendments made by this Part apply to assessments for the 1998-99
income year and later income years.
Part
2—Amendment of the Income
Tax Assessment Act 1936
11 At the end of section
22A
Add:
Provisions cut off from 1998-99
(2) A provision of this Act set out in the second column of the table does
not apply to an assessment for the 1998-99 year of income or a later year of
income.
Note: The last column of the table shows the provision of
the Income Tax Assessment Act 1997 that applies instead.
|
Old exempt income provisions that no longer apply |
||
|---|---|---|
|
Item |
Provision of this Act |
Corresponding provision of the Income Tax Assessment Act
1997 |
|
1 |
Paragraph 23(z) |
table item 2.1A in section 51-10 |
|
2 |
Paragraph 23(zaa) |
table item 2.1B in section 51-10 |
12 At the end of section 24
Add:
(2) Subdivision BA does not apply to an assessment for the 1998-99 year of
income or a later year of income.
Note: For the law applying to the 1998-99 year of income and
later years of income, see Subdivision 52-F of the Income Tax Assessment Act
1997.
13 Subsection 159ZR(1) (paragraph (e) of the
definition of eligible income)
Repeal the paragraph, substitute:
(e) a payment that is covered by Division 52, 53 or 55 of the Income
Tax Assessment Act 1997, but that is not exempt from income tax under that
Division;
14 Subsection 221A(1) (definition of salary
or wages)
Omit “Subdivision BA of Division 1AA of Part III of this Act
or”.
15 Application
The amendment made by item 13 applies for the purpose of determining
whether a lump sum payment is eligible income in the 1998-99 year of income or a
later year of income.
Income
Tax Assessment Act 1936
1 Subsection 221YAAA(4)
Omit “(GDP(I))”.
2 Application
The amendment made by item 1 applies in relation to provisional tax
(including instalments) payable for the 1999-2000 year of income and all later
years of income.
Income
Tax Assessment Act 1936
1 Subsection 6(1) (at the end of paragraph (b)
of the definition of Commonwealth education or training
payment)
Add:
or (v) the scheme known as youth allowance; or
(vi) the scheme known as austudy payment;
Income
Tax Assessment Act 1997
2 After subparagraph
52-145(1)(b)(iii)
Insert:
or (iv) the scheme known as youth allowance; or
(v) the scheme known as austudy payment;
3 Application of amendments
The amendments made by this Schedule apply to assessments for the 1998-99
income year and later income years.