South Australian Numbered Acts South Australian Numbered ActsAfter section 40 insert:
Part 6A—Tax avoidance schemes
40A—Object of Part
The object of this Part is to deter artificial, blatant or contrived schemes to reduce or avoid liability for tax.
40B—Payment of tax avoided as a result of tax avoidance scheme
(1) A person is liable to pay the amount of tax avoided by the person as a result of a tax avoidance scheme that is of an artificial, blatant or contrived nature.
(2) For the purposes of this Part, the amount of tax avoided by a person as a result of a tax avoidance scheme is the amount of tax, or the amount of additional tax, that would have been payable by the person, or that is reasonable to expect would have been payable by the person, if the tax avoidance scheme had not been entered into or made.
(3) The Commissioner may make an assessment, or reassessment, of a liability for tax on the basis of the person's liability under this Part to pay an amount of tax avoided by the person.
40C—Nature of a tax avoidance scheme
(1) For the purposes of this Part, a "tax avoidance scheme" is any scheme that a person, whether alone or with others, enters into, makes or carries out for the sole or dominant purpose of enabling liability for tax to be avoided or reduced.
(2) It does not matter that the scheme is entered into, made or carried out wholly or partly outside South Australia.
(3) In determining the sole or dominant purpose for which a scheme is entered into, made or carried out, any purpose relating to avoiding, reducing or postponing a liability for foreign tax is to be disregarded.
(4) In this section—
"foreign tax" means a duty, tax or other impost under a law of another State, a Territory, the Commonwealth or a jurisdiction outside Australia.
40D—Matters relevant to whether scheme is tax avoidance scheme
The following matters are taken into account in determining whether a scheme is a tax avoidance scheme, and whether it is of an artificial, blatant or contrived nature:
(a) the way in which the scheme was entered into, made or carried out;
(b) the form and substance of the scheme, including—
(i) the legal rights and obligations involved in the scheme; and
(ii) the economic and commercial substance of the scheme;
(c) when the scheme was entered into or made and the length of the period during which the scheme was carried out;
(d) the purpose of the relevant taxation law or any provision of the relevant taxation law (whether or not that purpose is expressly stated);
(e) the effect that the relevant taxation law would have in relation to the scheme apart from this Part;
(f) any change in any person's financial position, or other circumstances, that has resulted, will result, or may reasonably be expected to result, from the scheme;
(g) the nature of any connection, whether of a business, family or other nature, between the person whose liability for duty is avoided or reduced as a result of the scheme and any other person whose financial position or other circumstances have changed, will change, or may reasonably be expected to change, as a result of the scheme;
(h) the circumstances surrounding the scheme.
40E—Liability to pay avoidance tax
(1) A liability to pay an amount of tax avoided by a person as a result of a tax avoidance scheme is taken to arise on the date the amount of tax avoided would have been payable if the tax avoidance scheme had not been entered into or made.
(2) Accordingly, a tax default is taken to have occurred on the date the amount of tax avoided would have been payable if the tax avoidance scheme had not been entered into or made.
(3) The tax default will be taken to be a deliberate tax default under Part 5.
(4) This section applies only if the Commissioner issues a notice of assessment, or reassessment, of liability for tax on the basis that a scheme is a tax avoidance scheme of an artificial, blatant or contrived nature.
40F—Reasons for decision to be given
A notice of assessment, or reassessment, of liability for tax that is issued by the Commissioner on the basis that a scheme is a tax avoidance scheme of an artificial, blatant or contrived nature is to be accompanied by a statement of the Commissioner's reasons for making the assessment or reassessment.
40G—Innocent participants
(1) A person is liable under this Part to pay an amount of tax avoided by the person as a result of a tax avoidance scheme whether or not the person entered into, made or carried out the relevant tax avoidance scheme.
(2) However, a person is not liable to pay an amount of tax avoided by the person as a result of a tax avoidance scheme if the Commissioner is satisfied that it would be unfair to impose a liability for tax in the circumstances of the particular case.
40H—Meaning of "scheme"
(1) In this Part—
"scheme" means—
(a) a trust, contract, agreement, arrangement, understanding, promise or undertaking (including all steps and transactions by which it is carried into effect)—
(i) whether entered into or made orally or in writing; and
(ii) whether express or implied; and
(iii) whether or not it is, or is intended to be, enforceable by legal proceedings; or
(b) a scheme, plan, proposal, action, course of action or course of conduct.
(2) A scheme may be a unilateral scheme.
(3) This Part applies in relation to a part of a scheme in the same way as it applies to a scheme.
(4) Accordingly, in connection with subsection (3), a reference in this Part to a scheme includes a reference to a part of a scheme.
40I—Related matter
This Part does not limit a provision under another taxation law that allows the Commissioner to assess or recover tax that a person has sought to avoid.