TAX LAWS AMENDMENT (POLITICAL CONTRIBUTIONS AND GIFTS) BILL 2010

i Tax Laws Amendment (Political Contributions and Gifts) Bill 2008 No. , 2008

Contents

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

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

Schedule(s) ......................................................................................... 1

Schedule 1--Political contributions and gifts

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

Income Tax Assessment Act 1936

Income Tax Assessment Act 1997

Tax Laws Amendment (Political Contributions and Gifts) Bill 2008 No. , 2008 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 (Political

Contributions and Gifts) Act 2008.

2 Commence ment

This Act commences on the day on which it receives the Royal

Assent.

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repealed as set out in the applicable items in the Schedule

Political contributions and gifts Schedule 1

Tax Laws Amendment (Political Contributions and Gifts) Bill 2008 No. , 2008 3

Schedule 1

Political contributions and gifts

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

1 Amendments of the A New Tax System (Goods and

Services Tax) Act 1999

The provisions of the A New Tax System (Goods and Services Tax) Act

1999 listed in the table are amended as set out in the table.

Amendments

Item Provision

Omit:

Substitute:

Paragraph 38-250(1)(a)

gift-deductible entity

concessional entity

Paragraph 38-250(2)(a)

gift-deductible entity

concessional entity

Subsection 38-250(3)

(examp le)

gift-deductible entity

concessional entity

Subsection 38-250(4)

gift-deductible entity

concessional entity

Subsection 38-250(4)

(note)

gift-deductible entities

concessional entities

Paragraph 38-255(1)(a)

gift-deductible entity

concessional entity

Paragraph 38-255(1)(b)

gift-deductible entity

concessional entity

Subsection 38-255(1)

gift-deductible entity

(last occurring)

concessional entity

Subsection 38-255(2)

(examp le)

gift-deductible entity

concessional entity

Subsection 38-255(3)

gift-deductible entity

concessional entity

Subsection 38-255(3)

(note)

gift-deductible entities

concessional entities

Paragraph 38-270(1)(a)

gift-deductible entity

concessional entity

Subsection 38-270(2)

(examp le)

gift-deductible entity

concessional entity

Subsection 38-270(3)

gift-deductible entity

concessional entity

Subsection 38-270(3)

(note)

gift-deductible entities

concessional entities

Paragraph 40-160(1)(a)

gift-deductible entity

concessional entity

Subsection 40-160(2)

(examp le)

gift-deductible entity

concessional entity

Subsection 40-160(3)

gift-deductible entity

concessional entity

Schedule 1 Po litical contributions and gifts

4 Tax Laws Amendment (Political Contributions and Gifts) Bill 2008 No. , 2008

Amendments

Item Provision

Omit:

Substitute:

Subsection 40-160(3)

(note)

gift-deductible entities

concessional entities

Subparagraph

48-15(1)(e)(iii)

gift-deductible entity

concessional entity

Subsection 48-15(1AA)

(examp le)

gift-deductible entity

concessional entity

Paragraph 63-5(2)(aa)

gift-deductible entity

concessional entity

Subsection 63-5(3)

(examp le)

gift-deductible entity

concessional entity

Paragraph 111-18(1)(a)

gift-deductible entity

concessional entity

Subsection 111-18(1)

gift-deductible entity

(second, third and

fourth occurring)

concessional entity

Subsection 111-18(2)

(examp le)

gift-deductible entity

concessional entity

Subsection 111-18(3)

gift-deductible entity

concessional entity

Subsection 111-18(3)

(note)

gift-deductible entities

concessional entities

Section 129-45 (heading)

129-45 Gifts to

gift-deductible

entities

129-45 Gifts to

concessional entities

Subsection 129-45(1)

gift-deductible entity

concessional entity

Subsection 129-45(2)

(examp le)

gift-deductible entity

concessional entity

Subsection 129-45(3)

gift-deductible entity

concessional entity

Subsection 129-45(3)

(note)

gift-deductible entities

concessional entities

Section 157-1

gift-deductible entity

concessional entity

Subsection 157-5(1)

gift-deductible entity

concessional entity

Subsection 157-5(2)

(examp le)

gift-deductible entity

concessional entity

Subsection 157-5(3)

gift-deductible entity

concessional entity

Subsection 157-5(3)

(note)

gift-deductible entities

concessional entities

Subsection 157-10(1)

gift-deductible entity

concessional entity

Political contributions and gifts Schedule 1

Tax Laws Amendment (Political Contributions and Gifts) Bill 2008 No. , 2008 5

Amendments

Item Provision

Omit:

Substitute:

Subsection 157-10(2)

(examp le)

gift-deductible entity

concessional entity

Subsection 157-10(3)

gift-deductible entity

concessional entity

Subsection 157-10(3)

(note)

gift-deductible entities

concessional entities

2 Section 195-1

Insert:

Australian legislature has the same meaning as in the Income Tax

Assessment Act 1997.

3 Section 195-1

Insert:

concessional entity means:

(a) an entity, gifts or contributions to which can be deductible

under Division 30 of the Income Tax Assessment Act 1997; or

(b) a political party that is registered under Part XI of the

Commonwealth Electoral Act 1918 or under a corresponding

State law or

Territory law; or

independent candidate; or

(d) an

independent member.

4 Section 195-1 (definition of gift-deductible entity)

Repeal the definition.

5 Section 195-1

Insert:

independent candidate: an individual is an independent candidate

at a time if, at that time:

(a) the individual's candidature in an election for members of an

Australian legislature has been declared or otherwise

publicly announced by an entity authorised under the relevant

electoral legislation; and

Schedule 1 Po litical contributions and gifts

6 Tax Laws Amendment (Political Contributions and Gifts) Bill 2008 No. , 2008

(b) the individual's candidature is not endorsed by a political

party that is registered under Part XI of the Commonwealth

Electoral Act 1918 or under a corresponding

State law or

Territory law; and

(i) the time when the result of the election is declared or

otherwise publicly announced by an entity authorised

under the relevant electoral legislation; and

(ii) the time (if any) when the individual's intention to no

longer be a candidate for the election is publicly

available; and

(iii) the time (if any) when, after the election is taken to have

wholly failed under the relevant electoral legislation,

candidates for the replacement election are declared or

otherwise publicly announced by an entity authorised

under that legislation.

6 Section 195-1

Insert:

independent member: an individual is an independent member at

a time if, at that time:

(a) one of the following applies:

(i) the individual is a member of an

Australian legislature;

(ii) the individual's election as a member of an Australian

legislature (including as a result of an election that is

later declared void) has been declared or otherwise

publicly announced by an entity authorised under the

relevant electoral legislation, in a case where the

individual has not yet started serving as such a member;

(iii) the individual has ceased to be a member of an

Australian legislature because the legislature, or a house

of the legislature, is dissolved or has reached its

maximum duration, because the individual comes up for

election or because the relevant election has been

declared void, in a case where candidates for the

resulting election have not yet been declared or

otherwise publicly announced by an entity authorised

under the relevant electoral legislation; and

Political contributions and gifts Schedule 1

Tax Laws Amendment (Political Contributions and Gifts) Bill 2008 No. , 2008 7

(b) the individual is not a member of a political party that is

registered under Part XI of the Commonwealth Electoral Act

1918 or under a corresponding

State law or

Territory law.

Income Tax Assessment Act 1936

7 Subsections 78A(2), (3) and (4)

Omit "fund, authority, institution or person" (wherever occurring),

substitute "fund, authority or institution".

Income Tax Assessment Act 1997

8 Section 12-

5 (table item headed "political parties")

Repeal the item, substitute:

political contributions and gifts

deductions for ............................................................................ 26-22

9 After section 26-20

Insert:

26-22 Political contributions and gifts

You cannot deduct political contributions or gifts

(1) You cannot deduct under this Act:

(a) a contribution (including a membership fee) or gift to a

political party that is registered under Part XI of the

Commonwealth Electoral Act 1918 or under corresponding

State or Territory legislation; or

(b) a contribution or gift to an individual when the individual is a

candidate in an election for members of:

(i) an

Australian legislature; or

(ii) a

local governing body; or

(i) an Australian legislature; or

(ii) a local governing body.

Schedule 1 Po litical contributions and gifts

8 Tax Laws Amendment (Political Contributions and Gifts) Bill 2008 No. , 2008

Exception for employees and office holders

(2) However, subsection (1) does not apply to a loss or outgoing

incurred in gaining or producing assessable income from which an

amount is required to be withheld under section 12-35 or 12-45 in

Schedule 1 to the Taxation Administration Act 1953.

Note:

These provisions of the Taxation Administration Act 1953 require

amounts to be withheld from income of employees and office holders.

Starting and stopping being a candidate

(3) For the purposes of this section, an individual:

(a) starts being a candidate when the individual's intention to be

or to attempt to be a candidate for the election is publicly

available; and

(b) stops being a candidate at the earlier of:

(i) the time when the result of the election is declared or

otherwise publicly announced by an entity (an electoral

official) authorised under the relevant electoral

legislation; and

(ii) the time (if any) when the individual's intention to no

longer be a candidate for the election is publicly

available.

Starting being a member

(4) An individual who becomes a member as a result of an election

(including an election that is later declared void) is taken to start

being a member when the individual's election as a member is

declared or otherwise publicly announced by an electoral official.

10 Subsection 30-5(1)

Omit "a contribution or gift to a political party, independent candidate

or member, or".

11 Subsection 30-5(1) (note 1)

Omit "Note 1", substitute "Note".

12 Subsection 30-5(1) (note 2)

Repeal the note.

Political contributions and gifts Schedule 1

Tax Laws Amendment (Political Contributions and Gifts) Bill 2008 No. , 2008 9

13 Subsection 30-15(2) (note 1)

Omit "Note 1", substitute "Note".

14 Subsection 30-15(2) (note 2)

Repeal the note.

15 Subdivision 30-DA

Repeal the Subdivision.

16 Subsection 30-315(2) (table item 87)

Repeal the item.

17 At the end of section 110-38

Add:

(6) Expenditure does not form part of any element of the cost base to

the extent that section 26-22 prevents it being deducted.

Note:

Section 26-22 denies deductions for political contributions and gifts.

18 After subsection 110-55(9E)

Insert:

(9F) Expenditure does not form part of the reduced cost base to the

extent that section 26-22 prevents it being deducted.

Note:

Section 26-22 denies deductions for political contributions and gifts.

19 Subsection 995-1(1) (definition of independent candidate)

Repeal the definition.

20 Subsection 995-1(1) (definition of independent member)

Repeal the definition.

21 Application

The amendments made by this Schedule apply in relation to

contributions or gifts made on or after 1 July 2008.

Commonwealth of Australia Bills

TAX LAWS AMENDMENT (POLITICAL CONTRIBUTIONS AND GIFTS) BILL 2010