Commonwealth Numbered Acts

TAXATION LAWS AMENDMENT ACT (No. 4) 1986 No. 154 of 1986 - SECT 39

39. (1) After section 221AA of the Principal Act the following section is
inserted: Modified application of Division for early balancing companies

"221AB. (1) This Division applies, in relation to instalments of tax payable
by an early balancing company in respect of income of the year of income
commencing on 1 July 1986 or a subsequent year of income, as if-

   (a)  references in section 221AC (including that section as it applies in
        accordance with section 102L or 102T) and section 221AF to a year of
        tax were references to the period (in this sub-section referred to as
        the 'substituted instalment period') of one year commencing on-

        (i)    the first day of the month next following the month in which
               the year of income of the company ends; or

        (ii)   1 January in the financial year next preceding the year of tax,
whichever is the later; and

   (b)  references in sections 221AF and 221AG to a specified date in a year
        of tax were references to the date that precedes the specified date by
        the number of months in the period commencing on the first day of the
        substituted instalment period and ending immediately before the
        beginning of the year of tax.

"(2) In this section, 'early balancing company' means a company whose year of
income ends more than 1 month before the beginning of the year of tax.".

(2) Where, but for this sub-section, the earliest date that may be
specified, in a notice (in this sub-section referred to as the "advanced
instalment notice") issued under sub-section 221AF (1) of the amended Act in
respect of an instalment of tax (in this sub-section referred to as the

"advanced instalment") in respect of the income of a company of the
transitional year, as the date on which the advanced instalment is due and
payable would be a date before 1 July 1987, the following provisions apply:

   (a)  15 June 1987 is the earliest date that may be specified in the
        advanced instalment notice as the date on which the advanced
        instalment is due and payable;

   (b)  sub-sections 221AE (1) and 221AG (4), (5), (6) and (7) of the amended
        Act apply, for the purpose of determining the amount of the advanced
        instalment or an amount of additional tax in relation to the advanced
        instalment, as if a reference in those sub-sections to one-quarter
        were a reference to one-twelfth;

   (c)  sub-section 221AE (1A) of the amended Act applies in relation to the
        advanced instalment as if the reference in that sub-section to $250
        were a reference to $84;

   (d)  sub-sections 221AE (5), (6) and (7) of the amended Act apply, in
        relation to the transitional year, as if references in those
        sub-sections to the income tax in respect of the income of the company
        of the year of income were references to the amount of that income tax
        less the original deferred amount;

   (e)  section 204 of the amended Act does not apply to so much of the income
        tax payable by the company under the original assessment in respect of
        the taxable income of the company of the transitional year as is equal
        to the original deferred amount;

   (f)  subject to section 206 of the amended Act-

        (i)    so much of the income tax payable by the company in respect of
               income of the transitional year as is equal to one-half of the
               original deferred amount is due and payable on the date
               specified in a notice issued to the company by the Commissioner
               for the purposes of this sub-paragraph, being a date not
               earlier than 15 June 1988; and

        (ii)   so much of the income tax payable by the company in respect of
               income of the transitional year as is equal to one-half of the
               original deferred amount is due and payable on the date
               specified in a notice issued to the company by the Commissioner
               for the purposes of this sub-paragraph, being a date not
               earlier than 15 June 1989;

   (g)  if an amended assessment is made in respect of the taxable income of
        the company of the transitional year and the revised deferred amount
        in relation to the amended assessment exceeds the original deferred
        amount-

        (i)    where a notice has not been issued under sub-paragraph (f) (i)-

                (A)  section 204 does not apply in relation to so much of the
                     tax payable by virtue of the amended assessment as is
                     equal to the excess; and

                (B)  paragraph (f) has effect as if a reference in that
                     paragraph to the original deferred amount were a
                     reference to the revised deferred amount; and

        (ii)   where a notice has been issued under sub-paragraph (f) (i)-

                (A)  section 204 does not apply in relation to so much of the
                     tax payable by virtue of the amended assessment as is
                     equal to one-half of the excess; and

                (B)  sub-paragraph (f) (ii) has effect as if a reference in
                     that sub-paragraph to the original deferred amount were a
                     reference to the revised deferred amount;

   (h)  if an amended assessment is made in respect of the taxable income of
        the company of the transitional year and the original deferred amount
        exceeds the revised deferred amount-

        (i)    where a notice has not been issued under sub-paragraph (f) (i)-

                (A)  any refund or credit to which the taxpayer would be
                     entitled by virtue of the amended assessment shall be
                     reduced by the excess; and

                (B)  paragraph (f) has effect as if a reference in that
                     paragraph to the original deferred amount were a
                     reference to the revised deferred amount; and

        (ii)   where a notice has been issued under sub-paragraph (f) (i)-

                (A)  any refund or credit to which the taxpayer would be
                     entitled by virtue of the amended assessment shall be
                     reduced by one-half of the excess; and

                (B)  sub-paragraph (f) (ii) has effect as if a reference in
                     that sub-paragraph to the original deferred amount were a
                     reference to the revised deferred amount;

   (j)  no credit or other amount under the amended Act or any other Act shall
        be applied in reduction of an amount payable in accordance with
        paragraph (f) before the amount so payable would, but for section 206
        of the amended Act, be due and payable.

(3) In sub-section (2) and this sub-section-

"amended Act" means the Principal Act as amended by this Act;

"income tax payable" means income tax payable after deducting any credits
under sub-section 98A (2), Division 18 of Part III or Division 3A of Part VI
of the amended Act or under the Income Tax (International Agreements) Act
1953;

"original assessment" means an assessment other than an amended assessment;

"original deferred amount", in relation to a company, means-

   (a)  where the substituted instalment period applicable in relation to the
        company in relation to the transitional year under sub-section 221AB
        (1) of the amended Act commences not later than 1 February
        1987-whichever of the following amounts is the least:

        (i)    one-third of the income tax payable under the original
               assessment in respect of the taxable income of the company of
               the transitional year;

        (ii)   one-third of the amount that, immediately before the issue of
               the notice of the original assessment in respect of the taxable
               income of the company of the transitional year, was the
               notional tax in relation to the transitional year for the
               purposes of Division 1A of Part VI of the amended Act;

        (iii)  the amount by which the income tax payable in respect of the
               taxable income of the company of the transitional year exceeds
               the amount, or the sum of the amounts, that, immediately before
               the issue of the notice of the original assessment in respect
               of the taxable income of the company of the transitional year,
               was or were payable as an instalment or instalments of tax in
               respect of the transitional year in accordance with Division 1A
               of Part VI of the amended Act; or

   (b)  in any other case-the amount that would be applicable under paragraph
        (a) of this definition if that paragraph were applicable and a
        reference in that paragraph to one-third were a reference to
        one-sixth;

"revised deferred amount", in relation to an amended assessment (in this
definition referred to as the "latest amended assessment"), means the amount
that would be the original deferred amount if-

   (a)  the latest amended assessment and any previous amended assessment had
        formed part of the original assessment; and

   (b)  notice of the original assessment had been issued at the time when
        notice of the latest amended assessment was issued;

"transitional year" means the year of income commencing on 1 July 1986.