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2008-2009
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
SENATE
Tax laws amendment (2008 measures no. 6) bill 2008
REVISED EXPLANATORY MEMORANDUM
(Circulated by the authority of the
Treasurer, the Hon Wayne Swan MP)
THIS MEMORANDUM TAKES ACCOUNT OF AMENDMENTS MADE BY THE HOUSE OF
REPRESENTATIVES TO THE BILL AS INTRODUCED
Table of contents
Glossary 1
General outline and financial impact 3
Chapter 1 CGT roll-overs for corporate restructures 7
Chapter 2 Amendments to assistance in collection provisions 29
Chapter 3 Late payment offset for superannuation guarantee contributions
37
Chapter 4 Minor amendments 45
Chapter 5 Assistance to individuals and communities affected by the
Victorian bushfires and North Queensland floods 55
Index 61
Glossary
The following abbreviations and acronyms are used throughout this
revised explanatory memorandum.
|Abbreviation |Definition |
|ATO |Australian Taxation Office |
|CGT |capital gains tax |
|Commissioner |Commissioner of Taxation |
|DGR |deductible gift recipient |
|FBT |fringe benefits tax |
|GIC |general interest charge |
|GST |goods and services tax |
|ITAA 1936 |Income Tax Assessment Act |
| |1936 |
|ITAA 1997 |Income Tax Assessment Act |
| |1997 |
|MEC group |multiple entry consolidated |
| |group |
|offset |late payment offset |
|PBIs |public benevolent |
| |institutions |
|Register |foreign claims register |
|SG |superannuation guarantee |
|SGAA 1992 |Superannuation Guarantee |
| |(Administration) Act 1992 |
|TAA 1953 |Taxation Administration Act |
| |1953 |
General outline and financial impact
CGT roll-overs for corporate restructures
Schedule 1 to this Bill modifies the capital gains tax (CGT)
provisions in the Income Tax Assessment Act 1997 to prevent a
market value cost base from arising when shares and certain other
interests in an entity are acquired by another entity following a
scrip for scrip CGT roll-over under an arrangement that is taken to
be a restructure.
Date of effect: These amendments apply to arrangements entered
into after 7.30 pm, by legal time in the Australian Capital
Territory, on 13 May 2008.
Proposal announced: This measure was announced in the 2008-09
Budget by the Assistant Treasurer and Minister for Competition
Policy and Consumer Affairs in Media Release No. 033 of
13 May 2008.
Financial impact: The financial impact of these amendments is
unquantifiable.
Compliance cost impact: These amendments are expected to have a
low compliance cost impact.
Amendments to assistance in collection provisions
Schedule 2 to this Bill amends the assistance in collection
provisions found in Division 263 of Schedule 1 to the Taxation
Administration Act 1953. The amendments will overcome legal and
administrative problems associated with deeming foreign tax debts
'never to have been payable' in the event that such debts are
removed from the foreign claims register (Register) or otherwise
reduced.
The amendments also expand the types of payments that the
Commissioner of Taxation (Commissioner) can make to the foreign
country to include certain funds that the Commissioner recovers in
the course of legal proceedings (such as interest attributable to
the debt and costs paid for by the foreign authority).
Finally, these amendments clarify that the role of the Register is
to transform foreign tax debt into Australian tax debts rather than
to act as a day-to-day record of the debtor's liability.
Date of effect: These amendments apply from the day after this
Bill receives Royal Assent.
Proposal announced: These amendments have not previously been
announced.
Financial impact: Nil.
Compliance cost impact: Low. These amendments are minor in nature
and will have no impact on businesses.
Late payment offset for superannuation guarantee contributions
Schedule 3 to this Bill amends the Superannuation Guarantee
(Administration) Act 1992 to vary the period within which an
employer can make a superannuation contribution after the due date
for a quarter and still elect to use the late payment offset to
reduce their superannuation guarantee charge liability for the
quarter. This amendment will encourage employers to make a
contribution on behalf of their employee, albeit late, in a more
timely manner closer to the original due date.
Schedule 3 also amends the calculation of the general interest
charge on an unpaid superannuation guarantee charge where an
employer elects to use the late payment offset.
Date of effect: These amendments commence from the date this Bill
receives Royal Assent.
Proposal announced: These amendments relate to the measure
announced by the Minister for Superannuation and Corporate Law in
Media Release No. 014 of 20 March 2008.
Financial impact: Minimal.
Compliance cost impact: Low. These amendments affect employers
who elect to use the late payment offset after the commencement of
this Bill. There will be a low increase in compliance cost arising
from the need for some employers to be aware of these amendments
and to make a contribution before an assessment for the relevant
quarter is raised.
Minor amendments
Schedule 4 to this Bill makes technical corrections and other minor
amendments to the taxation laws. These amendments are part of the
Government's ongoing commitment to the care and maintenance of the
tax system.
Date of effect: These corrections, amendments and improvements
generally commence from Royal Assent to this Bill but some apply
prospectively or retrospectively.
Proposal announced: These amendments have not previously been
announced.
Financial impact: The revenue impact of extending capital
allowance roll-over relief for depreciating assets to the case
where a fixed trust is converted to a company, is unquantifiable,
but is expected to involve a minimal to small cost to revenue.
Each of the other amendments will have a nil to minimal revenue
impact.
Compliance cost impact: Nil to low.
Assistance to individuals and communities affected by the Victorian
bushfires and North Queensland floods
Part 1 of Schedule 5 to this Bill amends the Income Tax Assessment
Act 1936 and the Income Tax Assessment Act 1997 (ITAA 1997) to make
the income recovery subsidy exempt from income tax, and to ensure
the subsidy is not included in separate net income for the purposes
of calculating an entitlement to certain tax offsets. The income
recovery subsidy will provide financial assistance to employees,
small business owners and farmers who can demonstrate they have
experienced a loss of income as a direct result of the 2009
Victorian bushfires or North Queensland floods.
Part 2 of Schedule 5 to this Bill amends the ITAA 1997 to provide
that the Treasurer may declare an event as a disaster for the
purposes of establishing Australian disaster relief funds. The
declaration of a disaster by the Treasurer will allow Australian
disaster relief funds to receive tax deductible donations, and
provide money for the relief of people in Australia in distress as
a result of the disaster. Public benevolent institutions, which
must normally operate for direct relief efforts, will also be able
to establish Australian disaster relief funds for longer term
recovery and community reconstruction efforts.
Part 2 also specifically lists the 2009 Victorian Bushfire Appeal
Trust Account as a deductible gift recipient (DGR) in Division 30
of the ITAA 1997. This will ensure that the fund can use tax
deductible donations for a wide range of activities, including
recovery and community reconstruction efforts in communities
affected by the 2009 Victorian bushfires, as well as providing
direct benevolent relief to affected communities.
Date of effect: The amendments which make the income recovery
subsidy exempt from income tax, and ensure the subsidy is not
included in separate net income, apply to the 2008-09 income year.
The amendments to the Australian disaster relief fund general
DGR category, and the specific listing as a DGR of the 2009
Victorian Bushfire Appeal Trust Account apply to the 2008-09 income
year and later income years.
Proposal announced: The Prime Minister announced the income
recovery subsidy in Parliament on 10 February 2009.
The amendments to the Australian disaster relief fund general DGR
category were announced by the Assistant Treasurer and Minister for
Competition Policy and Consumer Affairs in Media Release No. 010 of
24 February 2009.
Financial impact: The amendments to make the income recovery
subsidy exempt from income tax, and to ensure the subsidy is not
included in separate net income have a zero revenue cost against
the forward estimates as the payments themselves are newly
announced and thus no tax on these payments is included in the
forward estimates revenue base. There will be a foregone cost to
revenue of approximately $16.3 million as a result of these
payments in the 2008-09 income year.
The amendments to the Australian disaster relief fund category have
a zero revenue cost against the forward estimates, as there are no
disaster relief funds currently awaiting deductible gift recipient
status under this general DGR category.
The amendment to specifically list the 2009 Victorian Bushfire
Appeal Trust Account is expected to have a negative revenue impact
of $46.5 million in the 2009-10 income year.
Compliance cost impact: Negligible.
Chapter 1
CGT roll-overs for corporate restructures
Outline of chapter
1. Schedule 1 to this Bill modifies the capital gains tax (CGT)
provisions in the Income Tax Assessment Act 1997 (ITAA 1997) to
prevent a market value cost base from arising when shares and
certain other interests in an entity (the original entity) are
acquired by another entity (the acquiring entity) following a scrip
for scrip roll-over under an arrangement that is taken to be a
restructure.
Context of amendments
2. Currently, depending on circumstances, Subdivision 124-G of the
ITAA 1997 (exchange of shares in one company for shares in another
company) or Subdivision 124-M (scrip for scrip roll-over) may apply
to allow a CGT roll-over for shareholders who dispose of shares in
a company (the original entity) in exchange for shares in another
company (the acquiring entity). In essence:
. the exchange of shares roll-over is designed for corporate
restructures; and
. the scrip for scrip roll-over is designed for corporate
takeovers.
3. The exchange of shares roll-over provides a tax neutral outcome for
corporate restructures where there is no substantive change in the
underlying assets or the ownership of the original entity. If this
roll-over applies, the cost base of the shares that an acquiring
entity receives in the original entity reflects the cost bases of
the underlying net assets of the original entity.
4. The scrip for scrip roll-over can apply to an arrangement only if
the exchange of shares roll-over does not apply. If the scrip for
scrip roll-over applies, the market value substitution rule
generally applies so that the cost base of the shares that the
acquiring entity receives in the original entity reflects the
market value of the underlying net assets of the original entity.
This recognises that, in a commercial takeover, shares are given in
consideration for the acquisition of the value represented by those
assets.
5. However, the scrip for scrip roll-over contains integrity rules
that apply if the owners of the replacement entity and the original
entity are substantially the same. If the integrity rules apply,
the cost base of the shares that the acquiring entity receives in
the original entity generally reflects the cost bases of the
original shares held in the original entity (rather than the market
value of the original entity).
6. Companies are able to gain significant tax benefits by
restructuring in a way that attracts the scrip for scrip roll-over
rather than the exchange of shares roll-over. These tax benefits
are compounded if the entity taken over becomes a member of the
acquiring entity's consolidated group.
7. For example, some entities have entered into schemes that involve
the insertion of a new holding company above the original entity
(known as 'top hat' schemes). The schemes are designed to attract
a scrip for scrip roll-over. As a result, the holding company
obtains a market value cost base for the shares it acquires in the
original entity under the scheme even though there is no
significant change in the underlying ownership of the assets.
8. Where the original entity subsequently joins the holding company's
consolidated group, the consolidation tax cost setting rules apply
to push this market value cost base into the underlying assets of
the original entity. This effectively allows the tax costs of the
original entity's assets to be reset which, in turn, can lead to an
increase in capital allowance deductions and a reduction in capital
gains that arise on the disposal of those assets.
Summary of new law
9. The scrip for scrip CGT roll-over provisions will be modified to
prevent a market value cost base from arising for any qualifying
interests acquired by the acquiring entity under an arrangement
that is taken to be a restructure.
10. An arrangement will be taken to be a restructure if, broadly, just
after the arrangement was completed (the completion time) the
market value of the replacement interests issued by the acquiring
entity under the arrangement in exchange for qualifying interests
in the original entity is more than 80 per cent of the market value
of all the shares (including options, rights and similar interests
to acquire shares) issued by the replacement entity.
11. If an arrangement that qualifies for scrip for scrip roll-over is
taken to be a restructure, then the cost base for the qualifying
interests that the acquiring entity acquires in the original entity
will reflect the cost bases of the underlying net assets of the
original entity (rather than the market value of the original
entity).
12. In addition, if the original entity becomes a member of a
consolidated group or multiple entry consolidated group (MEC group)
under the arrangement, then the head company of the group can elect
to retain the tax costs of the original entity's assets.
Comparison of key features of new law and current law
|New law |Current law |
|If an arrangement that |A CGT roll-over (the |
|qualifies for scrip for |scrip for scrip |
|scrip roll-over is taken |roll-over) is available |
|to be a restructure, then|if interests in an entity|
|the cost base for the |(the original entity) are|
|qualifying interests that|exchanged for interests |
|the acquiring entity |in another entity (the |
|acquires in the original |replacement entity) |
|entity will reflect the |where, for example, there|
|cost bases of the |is a company takeover. |
|underlying net assets of |Under these arrangements,|
|the original entity |the acquiring entity |
|(rather than the market |acquires interests in the|
|value of the original |original entity. Subject|
|entity). |to certain integrity |
|An arrangement will be |rules, these interests |
|taken to be a restructure|are given a market value |
|if, broadly, at the |cost base. |
|completion time the | |
|market value of the | |
|replacement interests | |
|issued by the replacement| |
|entity under the | |
|arrangement in exchange | |
|for qualifying interests | |
|in the original entity is| |
|more than 80 per cent of | |
|the market value of all | |
|the shares (including | |
|options, rights and | |
|similar interests to | |
|acquire shares) issued by| |
|the replacement entity. | |
|If the original entity |If the original entity |
|becomes a member of a |becomes a member of a |
|consolidated group or MEC|consolidated group or |
|group under the |MEC group under the |
|arrangement, then the |arrangement, then the |
|head company of the group|head company of the group|
|can elect to retain the |must apply the |
|tax costs of the original|consolidation tax cost |
|entity's assets. |setting rules to reset |
| |the tax costs of the |
| |original entity's assets.|
Detailed explanation of new law
13. The scrip for scrip CGT roll-over provisions (Subdivision 124-M of
the ITAA 1997) will be modified to prevent a market value cost base
from arising for qualifying interests acquired by an acquiring
entity under an arrangement that is taken to be a restructure.
14. Qualifying interests are:
. original interests in the original entity - an interest is
an original interest under paragraph 124-780(1)(a) if the
interest is:
- a share in the original entity acquired by an acquiring
entity; or
- an option, right or similar interest in the original
entity acquired by an acquiring entity; and
. any interests issued by the original entity to an
acquiring entity under the arrangement in respect of other
original interests in the original entity that are
cancelled under the arrangement.
15. If an arrangement that qualifies for scrip for scrip roll-over is
taken to be a restructure, then the cost base for the qualifying
interests that the acquiring entity acquires in the original entity
will reflect the cost bases of the original entity's assets (rather
than the market value of the original entity).
16. In addition, if the original entity becomes a member of a
consolidated group or MEC group under the arrangement, the head
company of the group can elect to retain the tax costs of the
original entity's assets.
When is an arrangement taken to be a restructure?
17. A single arrangement will be taken to be a restructure if:
. the replacement entity for the arrangement knows, or could
reasonably be expected to know:
- that a scrip for scrip roll-over has been, or will be,
obtained in relation to the arrangement; and
- that there is a common stakeholder for the arrangement;
and
. just after the arrangement was completed (the completion
time), the market value of the replacement interests
issued by the replacement entity under the arrangement, or
under an earlier arrangement that was taken to be a
restructure, in exchange for qualifying interests in the
original entity is more than 80 per cent of the market
value of all the shares (including options, rights and
similar interests to acquire shares) issued by the
replacement entity.
[Schedule 1, item 2, subsection 124-784A(1)]
18. The replacement entity may be either the entity that acquires the
original entity (the acquiring entity) or the ultimate holding
company of the acquiring entity (paragraph 124-780(3)(c)).
19. An interest is a replacement interest under paragraph 124-780(1)(a)
if, broadly:
. the interest is a share in the acquiring entity that is
issued in exchange for an interest in the original entity;
or
. the interest is an option, right or similar interest that
gives an entitlement to acquire a share in the acquiring
entity that is issued in exchange for a similar interest
in the original entity.
Reasonable expectation that an arrangement will result in a scrip
for scrip CGT roll-over
20. An arrangement will be taken to be a restructure only if the
replacement entity for the arrangement knows, or could reasonably
be expected to know, that a scrip for scrip CGT roll-over has been,
or will be, obtained in relation to the arrangement. [Schedule 1,
item 2, subparagraph 124-784A(1)(a)(i)]
21. It will be a question of fact as to whether the replacement entity
for an arrangement knows, or could reasonably be expected to know,
that a scrip for scrip CGT roll-over has been, or will be, obtained
in relation to the arrangement. However, if the conditions for a
scrip for scrip CGT roll-over in section 124-780 are satisfied,
then it is likely that the replacement entity will know, or could
reasonably be expected to know, that the arrangement will result in
a scrip for scrip CGT roll-over unless it can establish that a CGT
roll-over is denied to all the shareholders of the original entity
because of the exceptions in section 124-795.
Common stakeholder
22. An arrangement will be taken to be a restructure only if the
replacement entity for an arrangement knows, or could reasonably be
expected to know, that there is no common stakeholder for the
arrangement. [Schedule 1, item 2, subparagraph 124-784A(1)(a)(ii)]
23. It will be a question of fact as to whether the replacement entity
for an arrangement knows, or could reasonably be expected to know,
that that there is no common stakeholder for the arrangement.
24. If there is no common stakeholder under an arrangement, there will
be a significant change in the underlying ownership of the original
entity. As a consequence, the arrangement will be more akin to a
takeover, rather than a restructure.
25. Under subsection 124-783(3), an original interest holder is a
common stakeholder for an arrangement if it had:
. a common stake (as defined in section 124-783) in the
original entity just before the arrangement started; and
. a common stake in the replacement entity just after the
arrangement was completed.
26. For the purpose of determining whether there is a common
stakeholder for an arrangement under section 124-784A,
subsections 124-783(4) and (5), which alter the operation of
subsection 124-783(3), are disregarded. Consequently:
. an original interest holder that has a replacement
interest will not be taken to be a common stakeholder just
because an acquiring entity for the arrangement is an
original interest holder; and
. an original interest holder for an arrangement can be a
common stakeholder even if the replacement entity or the
original entity has 300 members or more just before the
arrangement started.
[Schedule 1, item 2, subparagraph 124-784A(1)(a)(ii)]
Market value of the replacement entity increases by more than
80 per cent
27. If the replacement entity for an arrangement knows, or could
reasonably be expected to know, that a scrip for scrip CGT roll-
over has been, or will be, obtained in relation to the arrangement
and there is a common stakeholder, then the arrangement will be
taken to be a restructure if, just after the arrangement was
completed (the completion time), the market value of the
replacement interests issued by the replacement entity under the
arrangement in exchange for qualifying interests in the original
entity is more than 80 per cent of:
. the market value of the shares issued by the replacement
entity; and
. the market value of options, rights and similar interests
issued by the replacement entity that give the holder an
entitlement to acquire a share in the replacement entity
at or after the completion time.
[Schedule 1, item 2, paragraph 124-784A(1)(b) and steps 1 and 3 in
the method statement in subsection 124-784A(2)]
28. If the replacement entity issued replacement interests in exchange
for interests in the original entity under any earlier arrangements
that were taken to be restructures, then those replacement
interests will be taken into account for the purposes of applying
the test. [Schedule 1, item 2, step 2 in the method statement in
subsection 124-784A(2)]
1.
Nestar Online Pty Ltd (the replacement entity) enters into
an arrangement to acquire Miky Jay Toys Pty Ltd (the
original entity). Just prior to the arrangement:
. Nestar Online has a net market value of $50,000; and
. Miky Jay Toys has a net market value of $1 million.
Under the arrangement, the shareholders of Miky Jay Toys
receive $50,000 cash and shares with a value of $950,000 in
Nestar Online in exchange for their Miky Jay Toys shares.
The arrangement qualifies for a scrip for scrip CGT roll-
over.
The market value, just after the completion time, of the
replacement interests issued under the arrangement by Nestar
Online to the original shareholders of Miky Jay Toys is
$950,000 (step 1 in the method statement in subsection 124-
784A(2)).
As there are no prior arrangements that have been taken to
be restructures, the result of step 2 in the method
statement in subsection 124-784A(2) is also $950,000.
The market value, just after the completion time, of all the
shares (including options, rights and similar interests to
acquire shares) issued by Nestar Online is $1 million
(step 3 in the method statement in subsection 124-784A(2)).
As the result of step 2 in the method statement ($950,000)
is greater than 80 per cent of the result of step 3 (80% ×
$1m = $800,000), the arrangement is taken to
be a restructure.
2.
Zac Megastores Pty Ltd (the replacement entity) enters into
an arrangement to acquire Nestar Online Pty Ltd (the
original entity). Just prior to the arrangement:
. Zac Megastores has a net market value of $50,000; and
. Nestar Online has a net market value of $1 million.
The arrangement is undertaken in three stages.
Under stage 1, Zac Megastores acquires 5 per cent of Nestar
Online shares for $50,000 cash.
Under stage 2, Zac Megastores acquires an additional 80 per
cent of Nestar Online shares by exchanging shares. That is,
the participating shareholders of Nestar Online receive Zac
Megastores shares with a value of $800,000 in exchange for
their Nestar Online shares, and qualify for a scrip for
scrip CGT roll-over.
. The market value, just after the completion time, of the
replacement interests issued by Zac Megastores to the
original shareholders of Nestar Online under stage 2 of the
arrangement is $800,000 (step 1 in the method statement in
subsection 124-784A(2)).
. As there are no prior arrangements that have been taken to
be restructures, the result of step 2 in the method
statement in subsection 124-784A(2) is also $800,000.
. The market value of all the shares (including options,
rights and similar interests to acquire shares) issued by
Zac Megastores just after the completion of stage 2 is
$850,000 (step 3 in the method statement in subsection 124-
784A(2)).
. As the result of step 2 in the method statement ($800,000)
is greater than 80 per cent of the result of step 3
(80% × $850,000 = $680,000), stage 2 of the arrangement
is taken to be a restructure.
Under stage 3, Zac Megastores acquires the final 15 per cent
of Nestar Online shares by exchanging shares. That is, the
remaining shareholders of Nestar Online receive Zac
Megastores shares with a value of $150,000 in exchange for
their Nestar Online shares, and qualify for a scrip for
scrip CGT roll-over.
. The market value, just after the completion time, of the
replacement interests issued by Zac Megastores to original
shareholders of Nestar Online under stage 3 of the
arrangement is $150,000 (step 1 in the method statement in
subsection 124-784A(2)).
. The net market value of the replacement interests issued by
Zac Megastores to original shareholders of Nestar Online
under stage 2 of the arrangement is $800,000. Therefore,
the result of step 2 in the method statement in
subsection 124-784A(2) is $950,000 (ie, $150,000 +
$800,000).
. The market value of all the shares (including options,
rights and similar interests to acquire shares) issued by
Zac Megastores just after the completion of stage 3 is
$1 million (step 3 in the method statement in subsection 124-
784A(2)).
. As the result of step 2 in the method statement ($950,000)
is greater than 80 per cent of the result of step 3
(80% × $1m = $800,000), stage 3 of the arrangement
is also taken to be a restructure.
Value of interests in a listed entity
29. If a replacement entity is listed on an approved stock exchange at
the completion time, then, for the purpose of applying the method
statement in subsection 124-784A(2), the replacement entity may
choose that the market value of the replacement interests is taken
to be the officially quoted price of the interests at that time.
[Schedule 1, item 2, subsection 124-784A(3)]
30. An interest in an entity has an officially quoted price at the
completion time if, during the one week period starting on the day
that the completion time occurred, there was at least one
transaction on the relevant stock exchange of interests in that
class. The officially quoted price is the weighted average of the
prices at which those interests were traded on that stock exchange
(ie, the volume weighted average price) during that period.
[Schedule 1, items 2 and 5, subsection 124-784A(6) and the
definition of 'officially quoted price' in subsection 995-1(1)]
31. If there are no transactions on a relevant stock exchange of
interests in that class during that period, an interest in an
entity will not have an officially quoted price at the completion
time. In these circumstances, the replacement entity cannot make a
choice under subsection 124-784A(3).
32. Where an interest is quoted on two or more approved stock exchanges
on the day that the completion time occurred, the replacement
entity can choose the stock exchange on which interests are traded
to determine the officially quoted price. [Schedule 1, items 2 and
5, subsection 124-784A(7) and the definition of 'officially quoted
price' in subsection 995-1(1)]
More than one original entity acquired under an arrangement
33. If qualifying interests in more than one original entity are
acquired under the same arrangement, then:
. the qualifying interests of each of the original entities
are taken to be acquired under separate arrangements; and
. those separate arrangements are taken to have happened in
the order that the original entities were acquired.
[Schedule 1, item 2, subsection 124-784A(4)]
34. However, if interests are acquired in two or more original entities
at the same time under a single arrangement, the replacement entity
must choose the order in which the original entities were acquired
for the purposes of applying section 124-784A. [Schedule 1,
item 2, subsection 124-784A(5)]
More than one original entity acquired under separate arrangements
that commence at the same time
35. Similarly, if interests are acquired in two or more original
entities under separate arrangements that commence at the same
time, the replacement entity must choose the order in which the
original entities were acquired for the purposes of applying
section 124-784A. [Schedule 1, item 2, subsection 124-784A(5)]
Choice to deny a scrip for scrip CGT roll-over
36. To reduce compliance costs, a replacement entity can make a choice
to prevent taxpayers from being able to choose to obtain a scrip
for scrip CGT roll-over in relation to an arrangement. The
replacement entity or the original entity must notify affected
taxpayers of the choice before the exchange of shares.
[Schedule 1, item 3, subsection 124-795(4)]
37. The notification can be in the disclosure documentation sent to
holders of interests in the original entity in relation to the
arrangement or in any other form chosen by the replacement entity
or the original entity.
38. If the replacement entity for an arrangement makes a choice under
subsection 124-795(4), it will know, or could reasonably be
expected to know, that a scrip for scrip CGT roll-over has not
been, or will not be, obtained in relation to the arrangement. As
a result, the arrangement will fall outside the scope of
section 124-784A.
39. The choice to deny a scrip for scrip CGT roll-over is not limited
to arrangements that are taken to be restructures. Therefore, the
replacement entity does not need to establish that an arrangement
will be taken to be a restructure under section 124-784A before
making a choice under subsection 124-795(4).
Modification to the CGT cost base rules when an arrangement is taken to be
a restructure
40. Where an arrangement is taken to be a restructure, the cost base
and reduced cost base of the qualifying interests acquired in the
original entity are worked out by applying the method statement in
subsection 124-784B(2). [Schedule 1, items 1 and 2, item 2A in the
table in section 112-53 and section 124-784B]
41. However, the modifications do not apply if the cost base and
reduced cost base of the qualifying interests is worked out under
section 124-782, because the common stakeholder rules in
section 124-783 apply to the arrangement. [Schedule 1, item 2,
paragraph 124-784B(1)(a)]
42. If an arrangement is taken to be a restructure, the first element
of the cost base and reduced cost base of the qualifying interests
will be worked out at the completion time under the method
statement in subsection 124-784B(2). [Schedule 1, item 2,
subsections 124-784B(2) and (6)]
43. The method statement, which consists of three components, broadly
works out the first element of the cost base and reduced cost base
of the qualifying interests using the formula:
[pic]
44. The first component of the method statement is to add up certain
amounts relating to the original entity's assets - that is,
steps 1, 2 and 3 in the method statement.
45. Step 1 in the method statement, which primarily relates to CGT
assets held by the original entity, is the sum of:
. the market value of the original entity's pre-CGT assets
(except trading stock) at the completion time;
. the cost bases of the original entity's CGT assets (except
trading stock) at the completion time;
. if any of the original entity's CGT assets (except trading
stock) have no cost base, the maximum amount of
consideration the entity would need to receive if it were
to dispose of the assets at the completion time without an
amount being included in its assessable income or allowed
as a deduction; and
. the amounts worked out under steps 2 and 3 in the method
statement.
[Schedule 1, item 2, step 1 in the method statement in
subsection 124-784B(2)]
46. Step 2 in the method statement, which relates to the original
entity's trading stock, is the sum of:
. the value of the original entity's trading stock at the
start of the income year in which the completion time
occurred;
. the cost of livestock acquired by natural increase during
the income year but before the completion time;
. the amount of any outgoing incurred in connection with the
acquisition of trading stock during the income year but
before the completion time (except livestock acquired by
natural increase); and
. the amount of any outgoings forming part of the cost of
the trading stock incurred by the original entity during
its current holding of the trading stock but before the
completion time.
[Schedule 1, item 2, step 2 in the method statement in
subsection 124-784B(2)]
47. Step 3 in the method statement, which relates to assets of the
original entity that are not CGT assets or trading stock, is the
amount that would be an asset's cost base at the completion time if
the asset were a CGT asset. [Schedule 1, item 2, step 3 in the
method statement in subsection 124-784B(2)]
48. The second component of the method statement is to subtract the
original entity's liabilities at the completion time in respect of
those assets from the result of the first component of the method
statement - that is, step 4 in the method statement. For the
purpose of applying the method statement, the relevant liabilities
are those that are recognised for income tax purposes (as distinct
from accounting liabilities). [Schedule 1, item 2, step 4 in the
method statement in subsection 124-784B(2)]
49. When a liability of the original entity is not a liability in
respect of a specific asset or assets of the entity, the liability
is taken to be a liability in respect of all the assets of the
entity. [Schedule 1, item 2, subsection 124-784B(4)]
50. However, if a liability is in respect of two or more assets, the
proportion of the liability in respect of each asset reflects the
relative market value of each of those assets. [Schedule 1,
item 2, subsection 124-784B(5)]
51. The third component of the method statement is to divide the result
of the second component by the total number of membership interests
in the original entity - that is, step 5 in the method statement.
. If the original entity has one class of membership
interests, the result of step 4 is divided by the total
number of those membership interests at the completion
time.
. If the original entity has more than one class of
membership interests:
- a portion of the result of step 4 is allocated to each
class in proportion to the market value of all the
membership interests in that class; and
- the amount allocated to each class is divided by the
total number of membership interests in that class at
the completion time.
[Schedule 1, item 2, step 5 in the method statement in
subsection 124-784B(2)]
52. For the purposes of step 5 in the method statement in
subsection 124-784B(2), a membership interest is taken to include
an option, right or similar interest (including a contingent
option, right or interest) held at the completion time, which is
created or issued by the original entity, to acquire a membership
interest (such as a share) in the original entity. [Schedule 1,
item 2, subsection 124-784B(7)]
53. If an acquiring entity is listed on an approved stock exchange at
the completion time, then, for the purpose of applying step 5 in
the method statement, the replacement entity may choose that the
market value of the membership interests is taken to be the
officially quoted price of those interests at that time.
[Schedule 1, item 2, subsection 124-784A(3)]
1.
Nestar Online Pty Ltd acquired Miky Jay Toys Pty Ltd under
an arrangement that was taken to be a restructure. The
arrangement was completed on 31 March 2009.
Just prior to the arrangement, Miky Jay Toys had:
. pre-CGT assets (other than trading stock) with a market
value of $265,000;
. post-CGT assets (other than trading stock) with cost bases
of $400,000 and a market value of $650,000;
. trading stock with a value at the start of the 2008-09 of
$60,000; and
. trading stock acquired before 31 March 2009 with a cost of
$25,000.
Liabilities in respect of those assets amount to $150,000.
After the completion of the arrangement, Nestar Online holds
100,000 shares in Miky Jay Toys. All of the shares are of
the same class. Each share has a market value of $10.
As part of the arrangement, Nestar Online acquired 5,000
shares for cash, at a cost of $50,000 (ie, $10 per share).
Therefore, the first element of the cost base and reduced
cost base for each of those 5,000 shares is $10.
The remaining 95,000 shares were acquired under the
arrangement by a scrip for scrip exchange. The first
element of the cost base and reduced cost base of those
shares is worked out by applying the method statement in
subsection 124-784B(2).
. The result of step 1 is $750,000 - that is, the sum of:
- the market value of pre-CGT assets - $265,000 (step 1(a));
- the cost bases of post-CGT assets - $400,000 (step 1(b));
- the amount worked out for trading stock under step 2 -
$85,000 (step 1(d))
. The result of step 4 is $150,000 - that is, the value of the
liabilities in respect of those assets.
. The result of step 5 is $6 - that is, step 1 ($750,000) less
step 4 ($150,000) divided by the total number of membership
interests in the original entity (100,000).
Therefore, the first element of the cost base and reduced
cost base of each of the remaining 95,000 shares is $6.
Cost bases of qualifying interests acquired partly with cash and
partly with an exchange of scrip
54. Where a qualifying interest is acquired under an arrangement partly
with a payment of cash and partly with an exchange of scrip, the
method statement in subsection 124-784B(2) will apply to work out
that part of the first element of the cost base and reduced cost
base of the interest that is attributable to the exchange of scrip.
[Schedule 1, item 2, subsection 124-784B(3)]
55. The first element of the cost base and reduced cost base that is
attributable to cash is worked out using the general rules about
cost base.
1.
In Example 1.3 Nestar Online Pty Ltd acquired Miky Jay Toys
Pty Ltd. Under the arrangement, Nestar Online paid cash for
5,000 shares and purchased the remaining 95,000 shares by an
exchange of shares.
Assume that, instead, Nestar Online acquired 100,000 shares
partly by paying cash and partly by an exchange of shares -
that is, 5 per cent of each share was acquired by paying
cash and 95 per cent by exchanging shares.
In these circumstances, the cost base and reduced cost base
of each share will be $6.20 - that is the sum of:
. to the extent that the share is acquired by an exchange of
scrip, the amount worked out under subsection 124-784B(2) -
$5.70 (ie, $6 × $95,000 / $100,000); and
. to the extent that the share is acquired by cash - $0.50
(ie, $10 × $5,000 / $100,000).
Adjustments to the method statement in subsection 124-784B(2) for
arrangements involving consolidated groups
56. The operation of the method statement in subsection 124-784B(2) is
modified where, under an arrangement that is taken to be a
restructure:
. the original entity (other than a head company) joins a
consolidated group or MEC group;
. the original entity is the head company of a consolidated
group or MEC group and does not join another group;
. the original entity is the head company of a consolidated
group or MEC group and joins another group; or
. the original entity leaves a consolidated group or MEC
group and does not join another group.
57. The adjustments primarily ensure that the assets and liabilities
that are taken into account under the method statement in
subsection 124-784B(2) are appropriately identified.
Original entity (other than a head company) joins a consolidated
group
58. Where an original entity (that is not a head company) becomes a
subsidiary member of a consolidated group or MEC group under an
arrangement that is taken to be a restructure, for the purposes of
applying section 124-784B:
. the completion time for the arrangement is taken to be the
time the original entity becomes a member of the group;
and
. the core rules in the consolidation regime (Division 701)
in relation to the original entity becoming a member of
the group are disregarded.
[Schedule 1, item 4, subsections 715-910(1) and (2)]
59. As a result, the method statement in subsection 124-784B(2) is
applied at the joining time disregarding the single entity rule,
the entry history rule and the tax cost setting rules. This will
ensure that the original entity's assets and liabilities are
appropriately recognised for the purposes of applying the method
statement.
Original entity is the head company of a consolidated group and
does not join another group
60. The operation of the method statement in subsection 124-784B(2) is
modified where, under an arrangement that is taken to be a
restructure:
. the original entity is the head company of a consolidated
group or MEC group just before the arrangement was
completed; and
. the original entity does not become a subsidiary member of
another consolidated group or MEC group.
61. In these circumstances, the single entity rule (section 701-1) and
entry history rule (section 701-5) have effect for the purposes of
applying the method statement in subsection 124-784B(2).
[Schedule 1, item 4, section 715-915]
62. As a result, the assets and liabilities that are taken into account
under the method statement in subsection 124-784B(2) are the
underlying assets and liabilities of the group.
Original entity is the head company of a consolidated group and
joins another group
63. The operation of the method statement in subsection 124-784B(2) is
modified where, under an arrangement that is taken to be a
restructure:
. the original entity is the head company of a consolidated
group or MEC group (the acquired group) just before the
arrangement was completed; and
. as a result of the arrangement, the head company and all
of the subsidiary members of the acquired group become
subsidiary members of another consolidated group or
MEC group.
[Schedule 1, item 4, subsection 715-920(1)]
64. In these circumstances, for the purposes of applying the method
statement in subsection 124-784B(2):
. the original entity is taken to be the head company of the
acquired group at the completion time for the arrangement;
. the operation of the consolidation provisions for head
company core purposes in relation to the members of the
group continue to have effect at the completion time for
the arrangement - that is, the acquired group is taken to
remain in existence as a consolidated group or MEC group;
. the completion time for the arrangement is taken to be the
time the original entity becomes a member of the other
group; and
. the core rules in the consolidation regime (Division 701)
in relation to the original entity becoming a member of
the group are disregarded.
[Schedule 1, item 4, subsection 715-920(2)]
65. As a result, the method statement in subsection 124-784B(2) is
applied to the head company of the acquired group at the joining
time disregarding the single entity rule, the entry history rule
and the tax cost setting rules. This will ensure that all the
assets and liabilities of the acquired group are appropriately
recognised for the purposes of applying the method statement.
Original entity leaves a consolidated group and does not join
another group
66. Where, under an arrangement that is taken to be a restructure, an
original entity ceases to be a subsidiary member of a consolidated
group or MEC group after the completion time for the arrangement
and does not become a member of another consolidated group, the
completion time is taken to be the leaving time for the purposes of
applying section 124-784B. [Schedule 1, item 4, section 715-925]
67. As a result, the method statement in subsection 124-784B(2) is
applied to the leaving entity at the leaving time. This will
ensure that all the assets and liabilities of the leaving entity
are appropriately recognised for the purposes of applying the
method statement.
Cost base of equity or debt given by an acquiring entity to an ultimate
holding company
68. For a down stream acquisition where the acquiring subsidiary issues
debt or equity to the ultimate holding company, the acquisition
cost for the ultimate holding company for that debt or equity will
be based on the cost base for the qualifying interests that the
subsidiary acquires. [Schedule 1, item 2, section 124-784C]
69. In these circumstances, the first element of the cost base of the
equity or debt for the ultimate holding company is that part of the
cost base of the qualifying interests worked out under section 124-
784B as:
. may be reasonably allocated to the equity or debt; and
. is not more than the market value of the equity or debt
just after the arrangement was completed.
[Schedule 1, item 2, subsection 124-784C(2)]
70. In addition, any capital gain of the ultimate holding company from
the repayment of new debt owed by an acquiring entity under the
arrangement is disregarded to the extent that it relates to the
difference between the part of the cost base worked out under
section 124-784B and the market value of the debt just after the
arrangement was completed. [Schedule 1, item 2, subsection 124-
784C(3)]
71. Section 124-784C is based on section 124-784, which applies similar
outcomes for a down stream acquisition where the cost base of an
original interest is transferred or allocated under section 124-
782.
Modification to the tax cost setting rules if an original entity becomes a
member of a consolidated group
72. Under the consolidation regime, if an entity joins a consolidated
group or MEC group, the tax cost setting rules (section 701-10 and
subsection 701-35(4)) apply to reset the tax costs of the joining
entity's assets.
73. However, the head company of a consolidated group or MEC group can
choose to disregard the tax cost setting rules where, under an
arrangement that is taken to be a restructure:
. the original entity becomes a member of a consolidated
group or MEC group; or
. the original entity is the head company of a consolidated
group or MEC group (the acquired group) just before the
arrangement was completed and, as a result of the
arrangement, the head company and all of the subsidiary
members of the acquired group become subsidiary members of
another group.
[Schedule 1, item 4, subsections 715-910(3) and 715-920(3)]
74. If the head company makes a choice under subsection 715-910(3) or
715-920(3), the tax costs of the original entity's assets will not
be reset. Instead, the entry history rule will apply so that the
head company's tax costs of the original entity's assets will be
retained.
75. A choice to retain the tax costs of the original assets for an
arrangement that is taken to be a restructure is appropriate
because such an arrangement essentially involves a relatively small
entity taking over a relatively large entity with little increase
in value. The choice significantly reduces compliance costs as:
. there will be no need to apply section 124-784B to work
out the first element of the cost base and reduced cost
base of the qualifying interests acquired in the original
entity; and
. there will be no need to apply the tax cost setting rules
to work out the reset tax costs of the original entity's
assets.
Schemes entered into for a tax avoidance purpose
76. The general anti-avoidance rule in Part IVA of the Income Tax
Assessment Act 1936 applies to certain schemes entered into for the
dominant purpose of obtaining a tax benefit. Ordinarily a
transaction not treated as a restructure under section 124-784A of
the ITAA 1997 will not give rise to any issues that call for a
consideration of the potential application of Part IVA.
77. However, arrangements that are structured in an artificial or
contrived way so as to avoid being treated as a restructure could,
depending on the circumstances, attract the application of
Part IVA. For example, some transactions involving the changing of
the market value of the replacement interests or the interests on
issue (or shifting value between them), or the issuing of interests
before the completion time of the transaction, may contain features
which could lead to the application of Part IVA. Each case will
turn on its own particular facts.
Application and transitional provisions
78. If an arrangement involves a takeover bid (within the meaning of
the Corporations Act 2001), the amendments will apply in relation
to the arrangement if:
. for an off market bid - the bidder lodged with the
Australian Securities and Investments Commission a notice
stating that the bidder's statement and offer document has
been sent to the target (ie, step 4 in the table in
subsection 633(1) of the Corporations Act 2001 is
completed) after 7.30 pm, by legal time in the Australian
Capital Territory, on 13 May 2008; or
. for a market bid - the bidder announced the bid to the
relevant financial market (ie, step 2 in the table in
subsection 635(1) of the Corporations Act 2001 is
completed) after 7.30 pm, by legal time in the Australian
Capital Territory, on 13 May 2008.
[Schedule 1, subitem 6(1)]
79. If an arrangement involves a scheme of arrangement (within the
meaning of the Corporations Act 2001), the amendments will apply in
relation to the arrangement if a court orders, under subsection
411(1) of the Corporations Act 2001, a meeting of a company's
members, or one or more classes of a company's members, about the
arrangement and the application for the order was made after 7.30
pm, by legal time in the Australian Capital Territory, on 13 May
2008. [Schedule 1, subitem 6(2)]
80. If an arrangement does not involve a takeover bid or a scheme of
arrangement, the amendments will apply in relation to the
arrangement if a decision to enter into the arrangement was not
made before 7.30 pm, by legal time in the Australian Capital
Territory, on 13 May 2008. [Schedule 1, subitem 6(3)]
81. It will be a question of fact as to whether a decision to enter
into the arrangement was made before 7.30 pm, by legal time in the
Australian Capital Territory, on 13 May 2008. However, it is
expected that there would be some evidence of the decision in the
records of the acquiring entity or the original entity.
Chapter 2
Amendments to assistance in collection provisions
Outline of chapter
82. Schedule 2 to the Bill amends the assistance in collection
provisions found in Division 263 of Schedule 1 to the Taxation
Administration Act 1953 (TAA 1953). The amendments will overcome
legal and administrative problems associated with deeming debts
'never to have been payable' in the event that claims are removed
from the foreign claims register (Register) or otherwise reduced.
83. The amendments also expand the types of payments that the
Commissioner of Taxation (Commissioner) can make to the foreign
country to include certain funds that the Commissioner recovers in
the course of legal proceedings (such as interest attributable to
the debt and funds paid for in advance by the foreign country).
84. Finally, these amendments clarify that the role of the Register is
to transform foreign tax debts into Australian tax debts, rather
than acting as a day-to-day record of the debtor's liability.
Context of amendments
85. The current assistance in collection provisions were enacted by the
International Tax Agreements Amendment Act (No. 1) 2006 to enable
the Commissioner to meet Australia's existing and future treaty
obligations for the mutual assistance in collection of tax debts.
Specifically, these provisions enable the Commissioner to take
action to collect or to conserve tax debts owed in another country
where the debtor is resident in Australia or has assets in
Australia.
86. Since these provisions have been enacted, however, two issues have
been identified which may impact on the Commissioner's ability to
effectively meet Australia's obligations under relevant
international agreements.
87. The first issue arises because of the consequence of deeming a
foreign tax debt as 'never to have been payable' when the debt is
reduced under subsection 263-35(6). Debts can be reduced in
circumstances such as where a debtor has made a part payment in the
foreign country or where the debt is reduced in the foreign country
as a result of an amendment to the debtor's liability. Deeming
such debts as 'never to have been payable' in this way could
significantly frustrate any proceedings that the Commissioner has
commenced or finalised to collect the debt.
88. The second problem arises in relation to the types of payments that
the Commissioner is able to make to the foreign country. Under the
current law, section 263-40 permits only the principal amount and
any general interest charge (GIC) referable to that amount that has
been collected by the Commissioner to be paid to the foreign
country. However, there may be circumstances where other amounts
will need to be paid.
89. These amendments also provide an opportunity to clarify the role of
the Register.
Comparison of key features of new law and current law
|New law |Current law |
|Any foreign tax debts |Any foreign tax debts |
|that are removed from the|that are removed from the|
|Register or otherwise |Register or otherwise |
|reduced with agreement of|reduced with agreement of|
|the foreign country are |the foreign country are |
|treated as a credit for |deemed never to have been|
|the purposes of Part IIB |payable. |
|of the TAA 1953 | |
|Where foreign tax debts |No change. |
|are removed from the | |
|Register, the debtor's | |
|liability for any GIC | |
|referable to the foreign | |
|tax debt is also removed.| |
|Where foreign tax debts |Where foreign tax debts |
|are reduced and applied |are reduced and deemed |
|as a credit in accordance|never to have been |
|with Part IIB, the debtor|payable, any GIC |
|remains liable for any |referable to the reduced |
|GIC referable to the |debt is also deemed never|
|amount by which the debt |to have been payable. |
|has been reduced. | |
|New law |Current law |
|The Commissioner can |The Commissioner can |
|remit to the foreign |remit to the foreign |
|country any principal |country only the |
|amount of the foreign tax|principal amount and any |
|debt he collects (and any|GIC associated with that |
|GIC associated with that |amount that he collects. |
|debt) in addition to any | |
|judgment interest and any| |
|costs funded by the | |
|foreign country that the | |
|Commissioner recovers in | |
|the course of legal | |
|proceedings. | |
Detailed explanation of new law
90. These amendments address two issues with the existing assistance in
collection provisions found in Division 263 of Schedule 1 to the
TAA 1953. They also clarify the role of the Register.
Deeming amounts never to have been payable
Reducing claims
91. The first issue arises because of the consequence of deeming a
foreign tax debt as 'never to have been payable' when the debt is
reduced under subsection 263-35(6). Debts will be reduced in
circumstances such as where a debtor has made a part payment in the
foreign country or where the debt is reduced in the foreign country
as a result of an amendment of the debtor's liability.
92. The problem of deeming foreign tax debts 'never to have been
payable' in such circumstances arises where the Commissioner has
already commenced legal proceedings to recover the debt. Treating
a foreign tax debt in this way could result in any ongoing or
completed proceedings to be frustrated. For instance, where a
default judgment has been handed down in the Commissioner's favour,
any subsequent reduction of the debt (which will result in the
reduced amount being deemed 'never to have been payable') may
provide the debtor with a strong argument that the judgment was
entered in the wrong amount and should be set aside.
93. To overcome this issue, the amendments remove any reference to the
amount of the foreign tax debt reduction as being deemed 'never to
have been payable'. Instead, any amounts reduced will be treated
as a credit for the purposes of Part IIB of the TAA 1953 (which
deals with running balance accounts, credits and payments).
[Schedule 2, items 6 and 7]
94. This approach ensures any that 'reductions' that occur as a
consequence of a foreign country's notification to the Commissioner
(for instance of a part payment of the debt in the foreign
country), are treated in the same manner as if the debtor made a
part payment in Australia. That is, the amount will be applied
against the liability of the debtor as reflected on its running
balance account (if one has been created) or otherwise be applied
against the debtor's liability if the amount has not been allocated
to a running balance account (see sections 8AAZLA and 8AAZLB of the
TAA 1953).
95. In contrast to the current provisions, one of the effects of this
amendment is that the debtor will remain liable for any GIC that
has accrued in relation to an amount that is reduced. However, as
GIC acts as a replacement for any interest that would be accruing
on the tax debt in the foreign country, it will be appropriate in
some circumstances for the Commissioner to exercise his discretion
to remit any GIC. This would include circumstances such as where
the foreign tax debt is reduced as a result of an amendment to the
debtor's liability in the foreign country.
Removing claims from the Register
96. To ensure consistency in the assistance in collection provisions,
similar amendments will also be made in relation to the removal of
foreign tax debts from the Register. The removal of debts occurs
in circumstances where the debt was registered in error or where
the claim is otherwise withdrawn by the foreign country (and the
Commissioner has the agreement of the foreign country to remove the
debt from the Register) or where the debtor has applied to have the
debt removed from the Register under subsection 263-35(3).
97. Under these amendments, when foreign tax debts are removed from the
Register they will also no longer be considered 'never to have been
payable' but will be treated as a credit and applied against the
debtor's running balance account in accordance with Part IIB of the
TAA 1953. In effect, the credits apply to extinguish any remaining
foreign tax debt for which the debtor is liable. [Schedule 2, item
5, paragraph 255-35(5)(a)]
98. As this will occur in circumstances where the foreign tax debt
should not have been registered or where it is otherwise withdrawn
in its entirety, it is appropriate that the debtor also not be held
liable for any GIC that may have accrued in relation to the debt.
[Schedule 2, item 5, paragraph 255-35(5)(b)]
Clarifying the role of the Register
99. The Register provides a mechanism by which foreign tax debts are
effectively 'transformed' into Australian tax liabilities, in
relation to which the Commissioner may exercise his debt collection
powers. This is reflected in the existing subsection 263-30(1)
which notes that once the foreign tax debt is entered on the
Register, the amount owed by the debtor becomes a pecuniary
liability to the Commonwealth. The explanatory memorandum to the
International Tax Agreements Amendment Bill (No. 1) 2006 (see
paragraph 1.27) further notes that the role of the Register is only
to record liabilities, with any payment or credits received by the
Commissioner being applied against the debtor's running balance
account.
100. To clarify that the role of the register is not to act as a 'day-to-
day' record of the foreign tax debt owed by the debtor, these
amendments introduce a specific provision to reflect this.
[Schedule 2, item 1]
101. Consistent with the treatment of 'reductions' as credits as
proposed by these amendments, any such reductions will not require
the Commissioner to amend the Register and the Register will
continue to reflect the amount of the foreign tax debt as
originally notified by the foreign country. [Schedule 2, items 3
and 4]
102. However, notwithstanding that amounts 'removed' also give rise to
credits under Part IIB of the TAA 1953, since a 'removal' occurs in
circumstances where it is clear that the claim was placed on the
Register in error or where the foreign country withdraws the claim,
it is appropriate for a removal to also result in the Register
being amended (to reflect that there is no longer any foreign tax
debt which the Commissioner must pursue in Australia on behalf of
the foreign country).
103. It should be noted that, though a 'removal' results in both the
foreign tax debt being removed from the Register and the debtor
being entitled to a credit, this does not effectively 'double
count' the removal of the debtor's liability. The crediting
removes the debtor's liability while the removal of the debt from
the Register merely recognises that the role of the Register, in
'transforming' a foreign tax debt into an Australian tax liability,
is no longer required.
104. To provide further clarification, the table below highlights the
various events that can impact on the debtor's liability and/or the
content of the Register.
|Event |Impact on Register |Impact on debtor's |
| | |running balance |
| | |account |
|Amount of foreign |Particulars of claim|Debtor is entitled |
|tax debt placed on |are removed from the|to a credit up to |
|Register in error, |Register. |the value of the |
|foreign country | |entire amount of the|
|withdraws its claim | |claim plus any GIC |
|or debtor applies to| |that has accrued on |
|Commissioner to have| |such an amount (ie, |
|the foreign tax debt| |the debtor's |
|removed from the | |liability is |
|Register. | |effectively brought |
| | |to nil in relation |
| | |to the claim). |
|The foreign country |None. |Debtor is entitled |
|notifies the | |to a credit equal to|
|Commissioner that | |the amount of the |
|the amount owing by | |reduction. There is|
|the debtor needs to | |no impact on any GIC|
|be reduced (for | |that is on the |
|instance, because | |debtor's running |
|the debtor's | |balance account that|
|liability has been | |is referable to the |
|amended or because | |amount of the |
|the debtor has made | |reduction. However,|
|a part payment in | |the Commissioner has|
|the foreign | |the discretion to |
|country). | |remit such amounts |
| | |if appropriate. |
|Debtor makes a |None. |As with other |
|payment in | |taxation liabilities|
|Australia. | |in Australia, the |
| | |debtor's liability |
| | |is reduced and the |
| | |debtor is entitled |
| | |to a credit equal to|
| | |the amount of the |
| | |payment. |
|There is a minor |The Register can be |Nil. This has no |
|administrative error|amended to correct |impact on the |
|(for instance, the |the error (in |quantum of the |
|name of the debtor |accordance with |claim. |
|is misspelt and so |subsection 263-35(1)| |
|forth). |). | |
Expanding the types of monies that can be paid to the foreign country
105. The final issue which these amendments address arises in relation
to the types of payments that the Commissioner can make to the
foreign country. Under the current law, section 263-40 permits
only the principal amount and any GIC referable to that amount that
has been collected by the Commissioner to be paid to the foreign
country. However, there may be circumstances where other payments
will need to be made.
106. This would include judgment interest, being interest awarded by the
Court as part of obtaining judgment as well as interest that
accrues on the judgment debt from the day after judgment is
entered. Other amounts that should be paid to the foreign country
also includes costs that the Commissioner recovers in the course of
legal proceedings, where those costs had been paid for in advance
by the foreign country. Whether the foreign country is required to
make payments to the Commissioner for the recovery of the foreign
tax debt is a matter determined by an agreement between the
Commissioner and his foreign counterpart.
107. Accordingly, these amendments expand the types of payments that the
Commissioner can make to the foreign country to include judgment
interest and other costs recovered by the Commissioner in
proceedings relating to the foreign tax debt where those costs had
been paid for by the foreign country. [Schedule 2, item 8]
Chapter 3
Late payment offset for superannuation guarantee contributions
Outline of chapter
108. Schedule 3 to this Bill amends the Superannuation Guarantee
(Administration) Act 1992 (SGAA 1992) to vary the period within
which an employer can make a contribution to an employee's
superannuation fund after the due date for a quarter, and still be
able to use the late payment offset (offset). The calculation of
the general interest charge (GIC) on an unpaid amount of the
superannuation guarantee (SG) charge where the offset is used is
also amended.
Context of amendments
109. The SGAA 1992 prescribes a minimum level of superannuation
contribution that an employer is required to make on behalf of an
eligible employee for a quarter, or else pay an SG charge. The
prescribed minimum level of contribution is currently 9 per cent of
the employee's ordinary time earnings. To avoid the SG charge, the
employer is required to pay the prescribed contribution for the
quarter to the employee's superannuation fund by the due date. The
due date for a quarter is 28 days after the end of the quarter.
110. An employer who does not pay the required amount of superannuation
contribution by the due date is liable to pay the SG charge to the
Australian Taxation Office (ATO) by the date the SG charge is due
to be paid (SG charge payable date). The SG charge includes the
contribution shortfall amount, a nominal interest component and an
administration fee.
111. The offset under section 23A of the SGAA 1992 allows an employer
who makes a contribution into an employee's fund after the due date
for a quarter, to elect to use the contribution to offset against
part of their SG charge liability with respect to the employee for
the quarter. Prior to these amendments, the employer could make
the contribution at any time after the due date and still be
eligible to use the offset. That is, there was no specified time
limit as to when the employer was required to make the contribution
by, although they were required to elect to use the offset within
four years of the SG charge payable date.
112. Amending the SGAA 1992 to tighten the period within which an
employer can make a contribution and still use the offset will
encourage employers to make the contribution closer to the original
due date.
113. An employer is liable to pay the GIC on an unpaid amount of the SG
charge. The GIC effectively accrues on the individual employee's
shortfall component of the unpaid SG charge amount, from the SG
charge payable date to the date the SG charge and the GIC are both
fully paid. Prior to these amendments, where an employer makes a
late contribution into an employee's fund and elects to use the
offset, the GIC would be calculated on the full shortfall component
of the unpaid SG charge amount from the SG charge payable date to
the date the Commissioner of Taxation (Commissioner) receives the
election. This is despite a contribution being made earlier into
the employee's fund for the relevant quarter.
114. Amending the calculation of the GIC to take account of the offset
reflects the fact that the employer has earlier made a contribution
for the benefit of the employee for the relevant quarter.
Summary of new law
115. Schedule 3 to this Bill amends the SGAA 1992 with respect to when
an employer can make a contribution to an employee's fund after the
due date for a quarter, and still be able to use the offset. An
employer is eligible to use the offset to reduce their SG charge
liability, where:
. the employer has made a contribution for a quarter into an
employee's fund after the due date for the quarter;
. the contribution in respect of the employee is made before
the employer's original assessment for the SG charge for
the quarter (original SG assessment date);
. the employer has given an election, in the approved form,
to the Commissioner to use the offset in respect of the
employee to reduce their SG charge liability for the
quarter; and
. the election is made within four years after the original
SG assessment date for the quarter.
116. Schedule 3 also amends the SGAA 1992 in relation to the calculation
of the GIC on an unpaid amount of the SG charge where an employer
elects to use the offset. The offset takes effect from the
original SG assessment date. From the original SG assessment date,
the GIC accrues on the remaining shortfall component of the unpaid
SG charge amount after the offset has been applied.
Comparison of key features of new law and current law
|New law |Current law |
|A contribution made after|A contribution made any |
|the due date for a |time after the due date |
|quarter for an employee |for a quarter for an |
|can be used to offset |employee can be used to |
|against the SG charge for|offset against the SG |
|the quarter for the |charge for the quarter |
|employee, provided the |for the employee. |
|contribution is made | |
|before the original SG | |
|assessment date for the | |
|quarter. | |
|Where an employer elects |Where an employer elects |
|to use the offset, the |to use the offset, the |
|GIC accrues on the |GIC accrues on the full |
|remaining shortfall |shortfall component of |
|component of the unpaid |the unpaid SG charge |
|SG charge amount (after |amount (before the offset|
|the offset is applied) |is applied) from the SG |
|from the original SG |charge payable date to |
|assessment date for the |the date of the election.|
|quarter. |The GIC then accrues on |
| |the remaining shortfall |
| |component of the unpaid |
| |SG charge amount (after |
| |the offset is applied) |
| |from the date of the |
| |election. |
Detailed explanation of new law
Eligibility to use the offset
117. The offset can be used by an employer to reduce their SG charge
liability for a quarter for an employee, where all the following
conditions exist:
. the employer makes a contribution into the employee's
superannuation fund after the due date for the quarter
[Schedule 3, item 1, subparagraph 23A(1)(a)(i)];
. the contribution in respect of the employee is made before
the employer's original SG assessment date for the quarter
[Schedule 3, item 1, subparagraph 23A(1)(a)(ii)];
. the employer elects, in the approved form, to use the
contribution as an offset against their SG charge for the
quarter for the employee; and
. the election is made within four years after the
employer's original SG assessment date for the quarter
[Schedule 3, item 2].
118. An employer's original SG assessment date for a quarter is the date
when either of the following first occurs:
. the Commissioner receives an SG statement from the
employer for the quarter and the employer has not
previously lodged an SG statement for that quarter and the
Commissioner has not assessed an SG charge for the
employer for that quarter; or
. a default assessment is raised on the employer for the
quarter.
1.
Catherine is required to make a $1,000 contribution for the
September 2009 quarter on behalf of Jay. Catherine fails to
make the contribution by the due date of 28 October 2009,
but makes a late contribution into Jay's superannuation fund
on 1 December 2009. Catherine is assessed on 31 January
2010 with an SG charge liability for the September 2009
quarter for Jay. Catherine is eligible to use the late
contribution made to Jay's fund to offset against her unpaid
SG charge liability for Jay for the September 2009 quarter.
If Catherine wishes to use the offset she must give her
election in the approved form to the Commissioner by 31
January 2014.
2.
Jeremy does not make super contributions for Phil, Peter and
Michael for the quarter ended 30 September 2009. He pays a
late contribution for all three on 15 December 2009. On 11
January 2010 Jeremy lodges an SG statement with the
Commissioner including his liability for only Phil and
Peter. In that statement, he also elects a late payment
offset for Phil and Peter.
On 27 June 2010 Jeremy realises that he did not include
details for Michael in the SG statement or elect the offset
for him and lodges both an amended SG statement and an
offset election for Michael. Jeremy will be entitled to
claim the offset for Michael as it has been received within
four years of the original SG assessment date (ie, within
four years of 11 January 2010).
119. Where an employer makes a contribution to an employee's fund after
the due date for a quarter but is ineligible to use the offset
because the contribution is not made before the original SG
assessment date for the quarter, then the employer may be able to
apply that contribution to a future quarter for the employee for
the purposes of the SGAA 1992. This is in accordance with
subsection 23(7) of the SGAA 1992. However, the contribution can
only be applied to a future quarter if the contribution is made not
more than 12 months before the beginning of that quarter and the
individual is still an employee of the employer in that future
quarter.
1.
Kim is required to make a $500 contribution for the
September 2009 quarter on behalf of Jean. Kim fails to make
the contribution by the due date of 28 October 2009. Kim is
assessed with an SG charge liability on 1 November 2009 for
the September 2009 quarter for Jean. Kim makes a late
contribution on 1 December 2009 into Jean's fund. Kim is
not able to use the contribution to offset against her
unpaid SG charge liability for the September 2009 quarter.
This is because the contribution was not made before the
original SG assessment date for the September 2009 quarter
(ie, the contribution was not made before 1 November 2009).
However, Kim may apply the contribution to a future quarter
for Jean if the future quarter does not end later than
1 December 2010 and Jean is still employed by Kim in that
future quarter.
Date of effect of the offset
120. Where an employer is eligible to use the offset for a quarter for
an employee, and does elect to use the offset, then the offset
takes effect on the employer's original SG assessment date for the
quarter. [Schedule 3, item 3]
121. The offset takes effect to reduce the employer's SG charge
liability for the quarter in respect of the relevant employee. The
SG charge liability is reduced by first using the contribution to
offset against the nominal interest component of the SG charge,
before any remainder of the contribution is used to offset against
the shortfall amount of the SG charge. This is in accordance with
subsection 23A(4) of the SGAA 1992.
122. Having the date of effect of the offset as the employer's original
SG assessment date should encourage employers who have a shortfall
for a quarter to lodge their SG statement in a timely manner and to
also elect to use the offset in a timely manner, so that the offset
can take effect to reduce their SG charge liability.
123. The date of effect of the offset is also relevant for calculating
the GIC on an SG charge amount (refer to paragraph 3.19).
1.
Following on from Example 3.1, Catherine's SG charge amount
for the September 2009 quarter for Jay at the original SG
assessment date (31 January 2010) is $1,070. This is made
up of the shortfall amount of $1,000, the nominal interest
component of $50 and the administration fee of $20.
Catherine gives her election to use the offset in respect of
Jay to the Commissioner on 1 February 2010. On 31 January
2010, the late contribution made by Catherine into Jay's
fund is first offset against the nominal interest component
before the remainder of the contribution is offset against
the shortfall amount.
General interest charge on an unpaid superannuation guarantee charge
124. Section 49 of the SGAA 1992 sets out how the GIC on an unpaid SG
charge is calculated. The GIC does not accrue on the nominal
interest or the administration components of the SG charge, in
accordance with subsection 49(2) of the SGAA 1992. The GIC is
intended to encourage employers to pay an unpaid amount of the SG
charge by the time it is due to be paid (ie, by the SG charge
payable date). The SG charge payable date is set out under
sections 36 and 46 of the SGAA 1992.
125. The GIC accrues from the SG charge payable date to when both the SG
charge and the GIC have been fully paid. This is in accordance
with subsection 49(3) of the SGAA 1992. With the GIC accruing on
any shortfall component of the unpaid SG charge amount employers
have the incentive to pay the unpaid amount in a timely manner.
126. Prior to these amendments, where an employer elects to use the
offset under section 23A of the SGAA 1992, the GIC would accrue on
the full shortfall component of the unpaid SG charge amount from
the SG charge payable date to the date the Commissioner receives
the election. Then from the date the Commissioner receives the
election, the GIC would accrue on the remaining shortfall component
of the unpaid SG charge amount (after the offset has been applied)
to the time when both the SG charge and the GIC are fully paid.
127. Under these amendments, where an employer elects to use the offset
under section 23A, the GIC is calculated on the remaining shortfall
component of the unpaid SG charge amount (after the offset has been
applied) [Schedule 3, item 4]. The offset in respect of an
employee takes effect from the employer's original SG assessment
date for the quarter [Schedule 3, item 3].
1.
Following on from Example 3.4, Catherine is liable to pay
GIC on the remaining shortfall component of the unpaid SG
charge amount after the offset has been applied, from the SG
charge payable date for the September 2009 quarter to when
the SG charge and the GIC are both fully paid.
The offset takes effect on Catherine's original SG
assessment date of 31 January 2010. The remaining shortfall
component of the unpaid SG charge amount is $50 after the
offset has been applied. This amount is arrived by applying
the contribution ($1,000) against the nominal interest
component ($50) before the remainder of the contribution
($950) is applied against the shortfall amount ($1,000).
The GIC accrues on the shortfall amount of the remaining
unpaid SG charge ($50). The administration fee ($20) is
still payable but does not attract GIC.
The GIC will accrue on $50 from the SG charge payable date
of 31 January 2010 to when both the SG charge and the GIC
have been fully paid by Catherine.
Application and transitional provisions
128. These amendments commence from the date this Bill receives Royal
Assent.
129. These amendments apply to a valid election made by an employer to
use the offset on or after the commencement of this Bill [Schedule
3, item 5]. An election by an employer is considered to be valid
where it is made in accordance with section 23A of the SGAA 1992.
130. Schedule 3 to this Bill does not contain any transitional
provision.
Chapter 4
Minor amendments
Outline of chapter
131. Schedule 4 to this Bill makes various minor amendments to the
taxation laws.
Context of amendments
132. Taxation legislation is complex and wide-ranging. Therefore,
errors can occur. Even minor errors can detract from the
readability of the taxation laws and can confuse or mislead
readers, so the errors need correcting.
133. The minor amendments are part of the Government's commitment to the
care and maintenance of the taxation laws.
Summary of new law
134. These amendments deal with issues such as:
. incorrect terminology;
. grammatical or punctuation errors;
. missing asterisks from defined terms;
. inoperative material;
. ambiguities in the law; and
. realign policy with the original policy intent.
135. More significant amendments include:
. extending capital allowance roll-over relief for
depreciating assets to the case where a fixed trust is
converted to a company (see items 16 to 18);
. allowing funds that can make payments to dependents of
deceased estates to still be approved worker entitlement
funds and so retain the fringe benefits tax exemption for
payments to them (see item 5); and
. giving trustees and beneficiaries of employee share trusts
a choice to backdate recently inserted capital gains tax
(CGT)provisions that prevent taxing both trustees and
beneficiaries when the employee becomes absolutely
entitled to shares held in the trust after exercising
rights under an employee share scheme (see item 51).
136. These amendments apply from the date of Royal Assent unless
otherwise stated.
Detailed explanation of new law
1. : Amendments to the Goods and Services Tax Act 1999
|Provision being |What the amendment does |
|amended | |
|195-1 ('hospital |Replaces a reference to a definition |
|treatment') |that has been repealed with the |
| |definition that replaced it. |
| |'Hospital treatment' is a goods and |
| |services tax (GST) free health service. |
| |The current definition of 'hospital |
| |treatment' has the meaning given by |
| |subsection 67(4) of the National Health |
| |Act 1953. That provision was repealed |
| |on the enactment of the Private Health |
| |Insurance Act 2007. As a result, |
| |hospital treatment is defined by |
| |reference to a repealed provision. The |
| |amendment instead refers to the |
| |definition of 'hospital treatment' in |
| |the Private Health Insurance Act 2007 |
| |which achieves the same effect. |
| |[Schedule 4, item 1, section 195-1] |
2. : Amendments to the Fringe Benefits Tax Assessment Act 1986
|Provision being |What the amendment does |
|amended | |
|5C(3) and (4) |Amends the fringe benefits tax (FBT) |
| |calculation of an employer's aggregate |
| |fringe benefits amount to restore the |
| |pre-GST concessional treatment of remote|
| |area property benefits. [Schedule 4, |
| |items 2 and 3, subsections 5C(3) and |
| |(4)] |
| |These amendments also clarify how remote|
| |area housing fringe benefits are |
| |allocated between Type 1 and Type 2 |
| |aggregate fringe benefits amounts, |
| |according to whether the amortised |
| |fringe benefit to which it relates is a |
| |GST-creditable benefit. |
| |The calculation of an employer's |
| |aggregate fringe benefits amount was |
| |amended in 2000 to take the effect of |
| |GST into account. However, the |
| |amendments inadvertently did not |
| |replicate the previous FBT discount for |
| |remote area housing, nor the spreading |
| |of certain remote area property benefits|
| |over an amortisation period. |
| |The amendments, which favour taxpayers, |
| |apply from the FBT year commencing |
| |1 April 2000 (when the original GST |
| |amendments began). [Schedule 4, item 4]|
|58PB(4)(c)(i) |Allows approved worker entitlement funds|
| |to make payments to the dependants of |
| |deceased workers. [Schedule 4, item 5, |
| |subparagraph 58PB(4)(c)(i)] |
| |Sections 58PA and 58PB provide an |
| |exemption from FBT for certain payments |
| |to approved worker entitlement funds. A|
| |fund can only be an approved worker |
| |entitlement fund if it is limited to |
| |making payments to the employees for |
| |whom contributions were received. |
| |This amendment provides that, upon the |
| |death of an employee, the fund is able |
| |to make payments to the employee's |
| |dependants or the trustee of the |
| |employee's deceased estate, without |
| |losing its status as an approved worker |
| |entitlement fund. |
| |This is consistent with the outcome |
| |where a worker with unused leave |
| |entitlements dies and amounts in respect|
| |of those entitlements are paid to the |
| |dependants directly by an employer |
| |rather than by a worker's entitlement |
| |fund. |
3. : Amendments to the Income Tax Assessment Act 1936
|Provision being |What the amendment does |
|amended | |
|23AB(5)(a) |Updates a reference to the now repealed |
| |'Commonwealth Employees' Rehabilitation |
| |and Compensation Act 1988'. The Act was|
| |retitled to the 'Safety, Rehabilitation |
| |and Compensation Act 1988' in 1992 and |
| |1993. [Schedule 4, item 6, paragraph |
| |23AB(5)(a)] |
|Provision being |What the amendment does |
|amended | |
|23AG(1) |Corrects a grammatical error by |
| |replacing the word 'is' with the word |
| |'are'. [Schedule 4, item 7, subsection |
| |23AG(1)] |
|73A(6) (definition |Changes a reference to 'Education |
|of 'Research |Research Act 1970' to 'Australian |
|Secretary') |Research Council Act 2001'. This |
| |restores the capacity of the Secretary |
| |to the Department of Innovation to |
| |declare an institution an approved |
| |research institute. |
| |The Education Research Act 1970 was |
| |repealed on 3 July 2008 by the Statute |
| |Law Revision Act 2008. [Schedule 4, |
| |item 8, subsection 73A(6) (definition of|
| |'Research Secretary')] |
|82KZMGA(1) |Removes a discrepancy in the law that |
| |may inhibit the trading of |
| |pre-2 October 2001 interests in forestry|
| |managed investment schemes. This |
| |amendment reflects the original policy |
| |intent of the Tax Laws Amendment (2007 |
| |Measures No. 3) Act 2007. [Schedule 4, |
| |item 9, subsection 82KZMGA(1)] |
|102T(27) ('unit |Replaces a mistaken reference to |
|trust |'subsection 102M(1)' (which does not |
|distribution') |exist) with the correct reference |
| |'section 102M'. [Schedule 4, item 10, |
| |subsection 102T(27) (unit trust |
| |distribution)] |
4. : Amendments to the Income Tax Assessment Act 1997
|Provision being |What the amendment does |
|amended | |
|20-55(1) (item 1 in|Replaces references to 'allowable |
|the table) |deduction' with 'deduction', which is |
|20-55(1) (item 6 in|the term used in the Income Tax |
|the table) |Assessment Act 1997 (ITAA 1997). There |
|25-5(8) |is no change in outcomes. [Schedule 4, |
|36-17(5) (example) |items 11, 12, 13, 15, 21, 22, 23, 27, |
|43-50(1) and (2) |28, subsections 20-55(1) (item 1 in the |
|43-210 (step 6) |table), 20-55(1) (item 6 in the table), |
|43-215 (step 4) |25-5(8), 36-17(5) (example), 43-50(1) |
|240-55 (heading) |and (2) and 290-90(2) (note 2), sections|
|290-90(2) (note 2) |43-210 (step 6), 43-215 (step 4) and |
| |240-55 (heading)] |
|25-7(b) and (c) |Repeals a paragraph that only relates to|
| |the 2001-02 income year and is therefore|
| |inoperative. [Schedule 4, item 14, |
| |paragraph 25-7(b)] |
|Provision being |What the amendment does |
|amended | |
|26-50(3)(b)(iv) |Corrects asterisking of defined terms. |
|30-15(2) (column |In the ITAA 1997, the protocol is to |
|headed 'How much |mark defined terms with an asterisk but |
|you can deduct') |to do so only for the first occurrence |
|51-50(2)(b)(i) |of the term in each subsection. |
|52-70(b) |[Schedule 4, item 52, subparagraphs |
|52-105(3)(b) |26-50(3)(b)(iv), 215-10(1)(b)(ii) and |
|149-15(1)(b) |215-10(2)(a)(ii), paragraphs |
|152-40(1A)(a) |52-105(3)(b), 149-15(1)(b), |
|215-10(1)(b)(ii) |152-40(1A)(a), 215-10(1)(b), |
|215-10(1)(b) |215-10(1)(c), 295-485(1)(a), |
|215-10(1)(c) |320-107(1)(a) and subsections 30-15(2) |
|215-10(2)(a)(ii) |and 52-70(b)] |
|295-485(1)(a) | |
|320-107(1)(a) | |
|40-340(1) |Extends capital allowance roll-over |
| |relief to the same situations that |
| |Subdivision 124-N covers for CGT |
| |provisions. Because the situations are |
| |the same in both cases, the reasons for |
| |providing roll-over relief for CGT make |
| |it appropriate to also provide it for |
| |capital allowances. [Schedule 4, items |
| |16 and 18, subsections 40-340(1) and |
| |(2)] |
| |Generally roll-over relief is a deferral|
| |of tax where there is no underlying |
| |change in ownership of an asset (eg, |
| |where an asset is transferred from a |
| |company to a trust owned by the same |
| |person). |
| |The law provides situations where |
| |roll-over relief is available in CGT |
| |situations, and capital allowance |
| |situations. Usually these situations |
| |are aligned. |
| |The CGT rules in Subdivision 124-N |
| |provide roll-over relief where a unit |
| |trust transfers its assets to a company |
| |and the unit holders are provided with |
| |shares in the company. This amendment |
| |extends roll-over relief to capital |
| |allowances in the same case. |
| |The amendment applies to balancing |
| |adjustment events in the 2008-09 income |
| |year and later years. This ensures |
| |there is a uniform treatment across the |
| |income year. [Schedule 4, item 17] |
|40-340(5) |Replaces references to 'person' with |
| |'you', the direct form of address |
| |generally used in the ITAA 1997. |
| |[Schedule 4, items 19 and 20, subsection|
| |40-340(5)] |
|Provision being |What the amendment does |
|amended | |
|116-30(2B) |Amends subsection 116-30(2B) to ensure |
| |that it applies as intended. |
| |Subsection 116-30(2B) ensures that the |
| |CGT market value substitution rule in |
| |subsection 116-30(2) does not apply when|
| |CGT event C2 (about the cancellation, |
| |surrender and similar endings of an |
| |intangible CGT asset) happens to |
| |interests in certain widely held |
| |companies and trusts. |
| |Subsection 116-30(2B) was intended to |
| |apply only in those cases where the |
| |capital proceeds differ from the market |
| |value of the asset (ie, in paragraph |
| |116-30(2)(b) cases). However, |
| |subsection 116-30(2B) at present also |
| |inappropriately extends to cases where |
| |some or all of the capital proceeds |
| |cannot be valued (ie, paragraph |
| |116-30(2)(a) cases). The amendment |
| |ensures that the market value |
| |substitution rule can still apply in |
| |116-30(2)(a) cases. [Schedule 4, item |
| |24, subsection 116-30(2B)] |
| |This amendment (which favours taxpayers)|
| |applies to CGT events happening after |
| |the start of the 2006-07 income year so |
| |that it is consistent with the original |
| |application of subsection 116-30(2B). |
| |[Schedule 4, item 25] |
|122-50(1) example |Amends an example so that it correctly |
| |reflects the law. |
| |The example was correct when it was |
| |first introduced, but the need to amend |
| |it was overlooked when amendments were |
| |made to the operative provision in 2001.|
| | |
| |[Schedule 4, item 26, subsection |
| |122-50(1) example] |
|707-310 |Changes references to 'income' to the |
| |less ambiguous equivalent 'ordinary or |
| |statutory income'. [Schedule 4, |
| |items 29 to 31, section 707-310] |
|711-30(3) |Replaces an unnecessary internal tag |
| |'the receivable' with 'the asset' to |
| |remove unnecessary verbiage in the law. |
| |[Schedule 4, items 32 to 35, subsection |
| |711-30(3)] |
5. : Amendments to the Income Tax Rates Act 1986
|Provision being |What the amendment does |
|amended | |
|23(2)(c) |Updates references to provisions that |
| |were renumbered in 2007. [Schedule 4, |
| |item 35, paragraph 23(2)(c)] |
| |The amendment applies to assessments for|
| |the 2007-08 and later income years (when|
| |the error first applied) to avoid any |
| |confusion in the law. [Schedule 4, item|
| |36] |
6. : Amendments to the Taxation Administration Act 1953
|Provision being |What the amendment does |
|amended | |
|16-5 in Schedule 1,|The note refers to a number of sections |
|note 2 |and then refers to the time required by |
| |'that section'. An amendment made by |
| |the Tax Laws Amendment (Election |
| |Commitments No. 1) Act 2008 inserted 'or|
| |subsection 12-390(4)', in the note. |
| |Consequently, the use of 'that section' |
| |no longer covers all the provisions |
| |mentioned. The amendment corrects that |
| |by replacing 'that section' with 'that |
| |provision'. [Schedule 4, item 37, |
| |section 16-5 in Schedule 1] |
|20-35(2)(b) in |The paragraph refers to a number of |
|Schedule 1 |sections and then refers to the receipt |
| |mentioned in 'that section'. A |
| |consequential amendment made by the Tax |
| |Laws Amendment (Election Commitments No.|
| |1) Act 2008 inserted 'or |
| |subsection 12-390(4),' in the paragraph.|
| |Consequently, the use of 'that section' |
| |no longer covers all the provisions |
| |mentioned. The amendment corrects that |
| |by replacing 'that section' with 'that |
| |provision'. [Schedule 4, item 38, |
| |paragraph 20-35(2)(b) in Schedule 1] |
| |The application applies to income years |
| |starting on or after 1 July 2008 to |
| |avoid confusion. [Schedule 4, item 39] |
|45-10 in Schedule 1|Updates cross-references that were |
|(note 1) |missed when section 9-1 of the ITAA 1997|
|45-10 in Schedule 1|was re-ordered in 2007. [Schedule 4, |
|(note 2) |items 40 to 43, section 45-450 in |
|45-450 in Schedule |Schedule 1] |
|1 |The amendments are backdated to |
| |assessment for the 2007-2008 and later |
| |income years (when the references were |
| |missed) to avoid confusion in the law. |
| |[Schedule 4, item 44] |
7. : Amendments to the Taxation (Interest on Overpayments and Early
Payments) Act 1983
|Provision being |What the amendment does |
|amended | |
|3(1) |Restores the provision that allows |
| |interest to be paid to taxpayers when |
| |they have overpaid certain amounts. |
| |[Schedule 4, item 45, subsection 3(1)] |
| |Paragraph (a) of the definition of |
| |'income tax crediting amount' in section|
| |3 was repealed as a consequential |
| |amendment to the introduction of the new|
| |foreign tax offset provisions (item 213 |
| |of Schedule 1 to the Tax Laws Amendment |
| |(2007 Measures No. 4) Act 2007). |
| |Part of that paragraph allowed interest |
| |to be paid to taxpayers when a credit |
| |entitlement arose that was not related |
| |to foreign tax credits. |
| |The amendment restores that part of the |
| |repealed paragraph. It applies from the|
| |time that the repeal of the old |
| |paragraph applied (ie, accounting |
| |periods starting on or after |
| |1 July 2008). [Schedule 4, item 46] |
|10(1)(a) |Repeals an inoperative provision and |
|10(1) |makes consequential amendments to |
|9(2) and (3) |references. [Schedule 4, items 47 to |
| |49, paragraph 10(a), subsections 9(2) |
| |and (3) and 10(1)] |
| |The subparagraph deals with the |
| |calculation of interest payable to a |
| |person for a period that commenced in |
| |the mid-eighties. |
| |A savings provision ensures that, in the|
| |unlikely event a taxpayer is still owed |
| |interest from that period, the operation|
| |of the subparagraph is preserved. |
| |[Schedule 4, item 50] |
8. : Amendments to the Tax Laws Amendment (Budget Measures) Act 2008
|Provision being |What the amendment does |
|amended | |
|Item 14 of Schedule|Provides taxpayers with a choice to |
|1 |amend their assessments for the 1998-99 |
| |to 2007-08 income years. |
| |Subsection 130-90(3) of the ITAA 1997 |
| |was amended in 2008 to prevent taxing |
| |both a trustee and a beneficiary of an |
| |employee share trust when the employee |
| |becomes absolutely entitled to shares |
| |held in the trust after exercising |
| |rights under an employee share scheme. |
| |That amendment applied to CGT events |
| |happening after 7.30 pm on 13 May 2008 |
| |(the time of announcement of the |
| |amendment). |
| |The application date was based on the |
| |understanding that taxpayers were not |
| |using these arrangements because of the |
| |potential double taxation that may |
| |apply. This understanding has proved to|
| |be incorrect. A number of public |
| |company schemes involving employee share|
| |trusts have been used since 1998 (when |
| |section 130-90 was introduced into the |
| |ITAA 1997). |
| |The current amendment provides taxpayers|
| |with the choice to apply for |
| |retrospective amendment of their |
| |assessments back to 1998-99. [Schedule |
| |4, item 51, item 14 of Schedule 1] |
| |This allows taxpayers to use the |
| |amendment in those cases where they |
| |would otherwise suffer double taxation, |
| |but still allows taxpayers to avoid any |
| |disadvantage retrospective application |
| |that the original amendment might |
| |impose. In other words, it ensures that|
| |the backdating is only to the benefit of|
| |taxpayers. |
| |Standard amendment periods (typically, |
| |two or four years depending on the |
| |taxpayer's circumstances) still apply. |
9. : Amendments to the Pay-roll Tax Act 1941
|Provision being |What the amendment does |
|amended | |
|All provisions |Repeals an inoperative Act. |
| |The Pay-roll Tax Assessment Act 1941 was|
| |repealed in 2006 by the Tax Laws |
| |Amendment (Repeal of Inoperative |
| |Provisions) Act 2006 but repealing the |
| |inoperative imposition Act was |
| |overlooked. [Schedule 4, item 53, |
| |Pay-roll Tax Act 1941] |
| |Commonwealth payroll tax ceased to apply|
| |to wages paid after 1 September 1971, |
| |which is the date the Commonwealth |
| |transferred responsibility for payroll |
| |tax to the States. |
Chapter 5
Assistance to individuals and communities affected by the Victorian
bushfires and North Queensland floods
Outline of chapter
137. Part 1 of Schedule 5 to this Bill amends the Income Tax Assessment
Act 1936 (ITAA 1936) and the Income Tax Assessment Act 1997
(ITAA 1997) to make the income recovery subsidy exempt from income
tax, and to ensure the subsidy is not included in separate net
income for the purposes of calculating an entitlement to certain
tax offsets.
138. Part 2 of Schedule 5 to this Bill amends the ITAA 1997 to provide
that the Treasurer may declare an event as a disaster for the
purposes of establishing Australian disaster relief funds. The
declaration of a disaster by the Treasurer will allow Australian
disaster relief funds to receive tax deductible donations, and
provide money for the relief of people in Australia in distress as
a result of the disaster. Public benevolent institutions, which
must normally operate for direct relief efforts, will also be able
to establish Australian disaster relief funds for longer term
recovery and community reconstruction efforts.
139. Part 2 of Schedule 5 also specifically lists the 2009 Victorian
Bushfire Appeal Trust Account as a deductible gift recipient (DGR)
in Division 30 of the ITAA 1997. This will ensure that the fund
can use tax deductible donations for a wide range of activities,
including recovery and community reconstruction efforts in
communities affected by the 2009 Victorian bushfires, as well as
providing direct benevolent relief to affected communities.
Context of amendments
Income recovery subsidy
140. The income recovery subsidy will provide financial assistance to
employees, small business owners and farmers who can demonstrate
they have experienced a loss of income as a direct result of the
2009 Victorian bushfires or North Queensland floods.
141. The Prime Minister announced the income recovery subsidy in
Parliament on 10 February 2009.
142. The income recovery subsidy is administered by Centrelink, and is
equivalent to the maximum rate of the Newstart allowance.
143. A payment received by a taxpayer as replacement for lost salary,
wages or income is generally taxable. A legislative amendment is
required to make the payment exempt from income tax.
144. Such payments would also normally be included in the calculation of
separate net income. The calculation of separate net income can
affect a taxpayer's eligibility for certain tax offsets.
145. Exempting these payments from income tax and separate net income
will lessen the financial hardship experienced by those individuals
and communities affected by the 2009 Victorian bushfires or North
Queensland floods.
Australian disaster relief funds
146. Subsection 30-15(2) of the ITAA 1997 allows a tax deduction to
taxpayers who make a gift or contribution to a fund, authority or
institution covered by the tables in Subdivision 30-B, subject to
certain conditions. Entities able to receive tax deductible gifts
are known as DGRs.
147. There are more than 35 existing general DGR categories.
Organisations which meet the criteria under these categories can
apply to be endorsed by the Commissioner of Taxation (Commissioner)
as a DGR. Gifts of $2 or more in cash or property to DGRs may be
tax deductible.
148. A public fund is eligible to be endorsed by the Commissioner as a
DGR under the Australian disaster relief fund category where it is
established and maintained for charitable purposes solely to
provide funds for the relief (including assistance to re-establish
a community) of people in Australia who have suffered a disaster.
149. For an event in Australia to be recognised as a disaster under the
current DGR provisions, it must be declared to be a disaster, or
give rise to a declaration of a state of emergency, by the relevant
Minister of a State or Territory.
150. Taxpayers can claim a tax deduction for a donation to an Australian
disaster relief fund endorsed as a result of a declared disaster if
it is made within two years from the first day of the event as
specified in the declaration, or if no day is declared, within two
years of the declaration.
151. Organisations endorsed as public benevolent institutions (PBIs)
must operate for the direct relief of poverty, sickness, suffering,
distress, misfortune, disability or helplessness. PBIs would not
generally be able to support longer term recovery or community
reconstruction efforts.
Victorian Government reconstruction fund - specific listing as a DGR
152. In order to be a DGR, an organisation must either be specifically
listed by name in the gift provisions of the ITAA 1997 or fall
within one of the general DGR categories set out in those
provisions.
153. Entities are specifically listed in the most exceptional
circumstances, and where the entity provides a broad public
benefit.
154. As a result of the 2009 Victorian bushfires, the 2009 Victorian
Bushfire Appeal Trust Account was established in partnership with
the Commonwealth Government and the Australian Red Cross. The 2009
Victorian Bushfire Appeal Trust Account was established under
section 19 of the Victorian Financial Management Act 1994.
155. This fund will receive monies collected from the Victorian Bushfire
Appeal 2009, a public appeal for donations coordinated by the
Australian Red Cross. It may also receive donations from other
entities.
Summary of new law
Income recovery subsidy
156. This measure amends:
. subsection 159J(6) of the ITAA 1936 to exclude the income
recovery subsidy from the definition of separate net
income; and
. section 51-30 of the ITAA 1997 to make the income recovery
subsidy exempt from income tax.
Australian disaster relief funds
157. This measure amends:
. subsection 30-45(1) of the ITAA 1997 to ensure that a PBI
may operate an Australian disaster relief fund; and
. that an Australian disaster relief fund may be established
as a result of a disaster event declared by the Treasurer.
Victorian Government reconstruction fund - specific listing as a DGR
158. This measure amends the table in subsection 30-45(2) of the
ITAA 1997 to provide that gifts made to the 2009 Victorian Bushfire
Appeal Trust Account are tax deductible, if the gift is made after
7 February 2009, and before 6 February 2014.
Detailed explanation of new law
Income recovery subsidy
Exclude the income recovery subsidy from the definition of separate
net income
159. A taxpayer may be eligible to certain tax offsets when they
contribute to the maintenance of a dependant, but eligibility for
an offset, or the amount of that offset, may be reduced as a
dependant's separate net income increases.
160. The amendment to subsection 159J(6) of the ITAA 1936 will exclude
the income recovery subsidy from the definition of separate net
income. [Schedule 5, item 1, paragraphs 159J(6)(e) and (f)]
161. The amendment will mean that an individual otherwise entitled to a
tax offset, will still be entitled to the same amount of offset,
despite any income recovery subsidy payments received by their
dependants.
Exempt the income recovery subsidy from income tax
162. Section 51-30 of the ITAA 1997 lists welfare recipients and
payments that are exempt from income tax.
163. The amendment to section 51-30 of the ITAA 1997 will make the
income recovery subsidy exempt from income tax. [Schedule 5, item
3, items 5.2 and 5.3 in the table in section 51-30]
164. Section 11-15 of the ITAA 1997 lists income which is exempt from
income tax only if it is derived by certain entities. This list
will be amended to include the income recovery subsidy as an exempt
payment. [Schedule 5, item 2, section 11-15]
Australian disaster relief funds
Ensure that a PBI may operate an Australian disaster relief fund
165. Subsection 30-45(1) of the ITAA 1997 sets out the general DGR
categories of welfare and rights, including Australian disaster
relief funds.
166. The amendment to item 4.1.5 in the table in subsection 30-45(1) of
the ITAA 1997 will ensure that a PBI may operate an Australian
disaster relief fund. [Schedule 5, item 7, item 4.1.5 in the table
in subsection 30-45(1)]
167. Australian disaster relief funds, including those operated by PBIs,
may provide money or direct assistance for relief, recovery and
community reconstruction work, to assist people in Australia
affected by a declared disaster.
168. PBIs which collect donations for relief work as a result of a
disaster recognised under the DGR provisions may pass these funds
to another DGR fund established for relief or recovery work as a
result of that disaster.
Provide that an event may be declared as a disaster by the
Treasurer for DGR purposes
169. The amendment to item 4.1.5 in the table in subsection 30-45(1) of
the ITAA 1997 will provide that Australian disaster relief funds
may be established as a result of an event which is declared by the
Treasurer as a disaster. [Schedule 5, item 7, item 4.1.5 in the
table in subsection 30-45(1)]
170. The Treasurer may declare an event as a disaster for DGR purposes
if he or she is satisfied that it developed rapidly, and it
resulted in the death, serious injury or other physical suffering
of a large number of people, or in widespread damage to property or
the natural environment. [Schedule 5, item 9, subsection 30-
45A(1)]
171. The Treasurer's declaration of an event must be in writing, specify
the first day of the event, and be published on the Internet or by
another method. [Schedule 5, item 9, subsection 30-45A(2)]
172. Australian disaster relief funds established as a result of a
disaster declared by the Treasurer will be subject to the same
conditions as Australian disaster relief funds established under
the current provisions. The current provisions require that an
event must be declared to be a disaster, or give rise to a
declaration of a state of emergency, by the relevant Minister of a
State or Territory.
Victorian Government reconstruction fund - specific listing as a DGR
173. Subsection 30-45(2) of the ITAA 1997 sets out specific welfare and
rights DGR recipients.
174. The amendment to the table in subsection 30-45(2) will make the
2009 Victorian Bushfire Appeal Trust Account a DGR. [Schedule 5,
item 8, item 4.2.41 in the table in subsection 30-45(2)]
175. The 2009 Victorian Bushfire Appeal Trust Account will use donated
monies for recovery and community reconstruction efforts, as well
as providing direct relief, for communities affected by the 2009
Victorian bushfires.
Application and transitional provisions
Income recovery subsidy
176. The income recovery subsidy amendments apply for the 2008-09 income
year. [Schedule 5, item 14]
177. As the amendments only apply for the 2008-09 income year, they will
be repealed on 1 July 2011, by which time the amendments would have
become inoperative. [Schedule 5, items 4 to 6]
Australian disaster relief funds
178. These amendments apply to gifts made in the 2008-09 income year and
later income years.
Victorian Government reconstruction fund - specific listing as a DGR
179. These amendments apply to gifts made after 7 February 2009 and
before 6 February 2014.
Index
Schedule 1: CGT roll-overs for corporate restructures
|Bill reference |Paragraph |
| |number |
|Items 1 and 2, item 2A in the table in |1.40 |
|section 112-53 and section 124-784B | |
|Item 2, subsection 124-784A(1) |1.17 |
|Item 2, subparagraph 124-784A(1)(a)(i) |1.20 |
|Item 2, subparagraph 124-784A(1)(a)(ii) |1.22, 1.26 |
|Item 2, paragraph 124-784A(1)(b) and steps 1|1.27 |
|and 3 in the method statement in | |
|subsection 124-784A(2) | |
|Item 2, step 2 in the method statement in |1.28 |
|subsection 124-784A(2) | |
|Item 2, subsection 124-784A(3) |1.29, 1.53 |
|Item 2, subsection 124-784A(4) |1.33 |
|Item 2, subsection 124-784A(5) |1.34, 1.35 |
|Items 2 and 5, subsection 124-784A(6) and |1.30 |
|the definition of 'officially quoted price' | |
|in subsection 995-1(1) | |
|Items 2 and 5, subsection 124-784A(7) and |1.32 |
|the definition of 'officially quoted price' | |
|in subsection 995-1(1) | |
|Item 2, paragraph 124-784B(1)(a) |1.41 |
|Item 2, subsections 124-784B(2) and (6) |1.42 |
|Item 2, step 1 of the method statement in |1.45 |
|subsection 124-784B(2) | |
|Item 2, step 2 of the method statement in |1.46 |
|subsection 124-784B(2) | |
|Item 2, step 3 of the method statement in |1.47 |
|subsection 124-784B(2) | |
|Item 2, step 4 of the method statement in |1.48 |
|subsection 124-784B(2) | |
|Item 2, step 5 of the method statement in |1.51 |
|subsection 124-784B(2) | |
|Item 2, subsection 124-784B(3) |1.54 |
|Item 2, subsection 124-784B(4) |1.49 |
|Item 2, subsection 124-784B(5) |1.50 |
|Item 2, subsection 124-784B(7) |1.52 |
|Item 2, section 124-784C |1.68 |
|Item 2, subsection 124-784C(2) |1.69 |
|Item 2, subsection 124-784C(3) |1.70 |
|Item 3, subsection 124-795(4) |1.36 |
|Bill reference |Paragraph |
| |number |
|Item 4, subsections 715-910(1) and (2) |1.58 |
|Item 4, subsections 715-910(3) and |1.73 |
|715-920(3) | |
|Item 4, section 715-915 |1.61 |
|Item 4, subsection 715-920(1) |1.63 |
|Item 4, subsection 715-920(2) |1.64 |
|Item 4, section 715-925 |1.66 |
|Subitem 6(1) |1.78 |
|Subitem 6(2) |1.79 |
|Subitem 6(3) |1.80 |
Schedule 2: Mutual assistance in collection
|Bill reference |Paragraph |
| |number |
|Item 1 |2.19 |
|Items 3 and 4 |2.20 |
|Item 5, paragraph 255-35(5)(a) |2.16 |
|Item 5, paragraph 255-35(5)(b) |2.17 |
|Items 6 and 7 |2.12 |
|Item 8 |2.26 |
Schedule 3: Late payment offset for superannuation guarantee contributions
|Bill reference |Paragraph |
| |number |
|Item 1, subparagraph 23A(1)(a)(i) |3.9 |
|Item 1, subparagraph 23A(1)(a)(ii) |3.9 |
|Item 2 |3.9 |
|Item 3 |3.12, 3.19 |
|Item 4 |3.19 |
|Item 5 |3.21 |
Schedule 4: Minor amendments
|Bill reference |Paragraph |
| |number |
|Item 1, section 195-1 |Table 4.1 |
|Items 2 and 3, subsections 5C(3) and (4) |Table 4.2 |
|Item 4 |Table 4.2 |
|Item 5, subparagraph 58PB(4)(c)(i) |Table 4.2 |
|Item 6, paragraph 23AB(5)(a) |Table 4.3 |
|Item 7, subsection 23AG(1) |Table 4.3 |
|Item 8, subsection 73A(6) (definition of |Table 4.3 |
|'Research Secretary') | |
|Item 9, subsection 82KZMGA(1) |Table 4.3 |
|Item 10, subsection 102T(27) (unit trust |Table 4.3 |
|distribution) | |
|Items 11, 12, 13, 15, 21, 22, 23, 27, 28, |Table 4.4 |
|subsections 20-55(1) (item 1 in the table ),| |
|20-55(1) (item 6 in the table), 25-5(8), | |
|36-17(5) (example), 43-50(1) and (2) and | |
|290-90(2) (note 2), sections 43-210 (step | |
|6), 43-215 (step 4) and 240-55 (heading) | |
|Item 14, paragraph 25-7(b) |Table 4.4 |
|Items 16 and 18, subsections 40-340(1) and |Table 4.4 |
|(2) | |
|Item 17 |Table 4.4 |
|Items 19 and 20, subsection 40-340(5) |Table 4.4 |
|Item 24, subsection 116-30(2B) |Table 4.4 |
|Item 25 |Table 4.4 |
|Item 26, subsection 122-50(1) example |Table 4.4 |
|Items 29 to 31, section 707-310 |Table 4.4 |
|Items 32 to 35, subsection 711-30(3) |Table 4.4 |
|Item 35, paragraph 23(2)(c) |Table 4.5 |
|Item 36 |Table 4.5 |
|Item 37, section 16-5 in Schedule 1 |Table 4.6 |
|Item 38, paragraph 20-35(2)(b) in Schedule 1|Table 4.6 |
|Item 39 |Table 4.6 |
|Items 40 to 43, section 45-450 in Schedule 1|Table 4.6 |
|Item 44 |Table 4.6 |
|Item 45, subsection 3(1) |Table 4.7 |
|Item 46 |Table 4.7 |
|Items 47 to 49, paragraph 10(a), subsections|Table 4.7 |
|9(2) and (3) and 10(1) | |
|Item 50 |Table 4.7 |
|Item 51, item 14 of Schedule 1 |Table 4.8 |
|Bill reference |Paragraph |
| |number |
|Item 52, subparagraphs 26-50(3)(b)(iv), |Table 4.4 |
|215-10(1)(b)(ii) and 215-10(2)(a)(ii), | |
|paragraphs 52-105(3)(b), 149-15(1)(b), | |
|152-40(1A)(a), 215-10(1)(b), 215-10(1)(c), | |
|295-485(1)(a), 320-107(1)(a) and subsections| |
|30-15(2) and 52-70(b) | |
Schedule 5: Assistance to individuals and communities affected by the
Victorian bushfires and North Queensland floods
|Bill reference |Paragraph |
| |number |
|Item 1, paragraphs 159J(6)(e) and (f) |5.24 |
|Item 2, section 11-15 |5.28 |
|Item 3, items 5.2 and 5.3 in the table in |5.27 |
|section 51-30 | |
|Items 4 to 6 |5.40 |
|Item 7, item 4.1.5 in the table in |5.30, 5.32 |
|subsection 30-45(1) | |
|Item 8, item 4.2.41 in the table in |5.37 |
|subsection 30-45(2) | |
|Item 9, subsection 30-45A(1) |5.33 |
|Item 9, subsection 30-45A(2) |5.34 |
|Item 14 |5.39 |
Do not remove section break.
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