Commonwealth Coat of Arms of Australia

Taxation Administration Act 1953

No. 1, 1953

Compilation No. 205

Compilation date: 1 January 2024

Includes amendments: Act No. 61, 2023 and Act No. 69, 2023

Registered: 5 January 2024

This compilation is in 4 volumes

Volume 1: sections 1–18

 Schedule 1 (sections 61 to 215)

Volume 2: Schedule 1 (sections 451 to 298110)

Volume 3: Schedule 1 (sections 3081 to 9905)

Volume 4: Endnotes

Each volume has its own contents

About this compilation

This compilation

This is a compilation of the Taxation Administration Act 1953 that shows the text of the law as amended and in force on 1 January 2024 (the compilation date).

The notes at the end of this compilation (the endnotes) include information about amending laws and the amendment history of provisions of the compiled law.

Uncommenced amendments

The effect of uncommenced amendments is not shown in the text of the compiled law. Any uncommenced amendments affecting the law are accessible on the Register (www.legislation.gov.au). The details of amendments made up to, but not commenced at, the compilation date are underlined in the endnotes. For more information on any uncommenced amendments, see the Register for the compiled law.

Application, saving and transitional provisions for provisions and amendments

If the operation of a provision or amendment of the compiled law is affected by an application, saving or transitional provision that is not included in this compilation, details are included in the endnotes.

Editorial changes

For more information about any editorial changes made in this compilation, see the endnotes.

Modifications

If the compiled law is modified by another law, the compiled law operates as modified but the modification does not amend the text of the law. Accordingly, this compilation does not show the text of the compiled law as modified. For more information on any modifications, see the Register for the compiled law.

Selfrepealing provisions

If a provision of the compiled law has been repealed in accordance with a provision of the law, details are included in the endnotes.

 

 

 

Contents

Schedule 1—Collection and recovery of income tax and other liabilities

Chapter 2—Collection, recovery and administration of income tax

Part 210—Pay as you go (PAYG) instalments

Division 45—Instalment payments

Guide to Division 45               2

451 What this Division is about

Subdivision 45A—Basic rules

455 Object of this Part

4510 Application of Part

4515 Liability for instalments

4520 Information to be given to the Commissioner by certain payers

4525 Penalty for failure to notify Commissioner

4530 Credit for instalments payable

Subdivision 45B—When instalments are due

4550 Liability to pay instalments

4560 Meaning of instalment quarter

4561 When quarterly instalments are due—payers of quarterly instalments

4565 Meaning of instalment month

4567 When monthly instalments are due—payers of monthly instalments

4570 When annual instalments are due

4572 Means of payment of instalment

4575 Instalments recoverable in same way as income tax

4580 General interest charge on late payment

4590 Commissioner may withdraw instalment rate

Subdivision 45C—Working out instalment amounts

45110 How to work out amount of quarterly instalment on instalment income basis

45112 Amount of instalment for quarterly payer who pays on basis of GDPadjusted notional tax

45114 How to work out amount of monthly instalment

45115 How to work out amount of annual instalment

45120 Meaning of instalment income

Subdivision 45D—Quarterly payers

45125 Quarterly payer who pays instalments on the basis of instalment income

45130 Quarterly payer who pays on the basis of GDPadjusted notional tax

45132 Quarterly payer who pays 4 instalments annually on the basis of GDPadjusted notional tax

45134 Quarterly payer who pays 2 instalments annually on the basis of GDPadjusted notional tax

Subdivision 45DA—Monthly payers

45136 Monthly payer

45138 Monthly payer requirement

Subdivision 45E—Annual payers

When you start and stop being an annual payer

45140 Choosing to pay annual instalments

45145 Meaning of instalment group

45150 Entity stops being annual payer if involved with GST registration or instalment group

45155 Entity stops being annual payer if notional tax is $8,000 or more, or entity chooses to pay quarterly

45160 Head company of a consolidated group stops being annual payer

Subdivision 45F—Varying the instalment rate for quarterly or monthly payers who pay on the basis of instalment income

45200 Application

45205 Choosing a varied instalment rate

45210 Notifying Commissioner of varied instalment rate

45215 Credit on using varied rate in certain cases

Subdivision 45G—General interest charge payable in certain cases if instalments are too low

45225 Effect of Subdivision in relation to monthly payers

45230 Liability to GIC on shortfall in quarterly instalment worked out on the basis of varied rate

45232 Liability to GIC on shortfall in quarterly instalment worked out on the basis of estimated benchmark tax

45233 Reduction in GIC liability under section 45232 if shortfall is made up in later instalment

45235 Liability to GIC on shortfall in annual instalment

45240 Commissioner may remit general interest charge

Subdivision 45H—Partnership income

45260 Instalment income for a period in which you are in a partnership

Subdivision 45I—Trust income included in instalment income of beneficiary

45280 Instalment income for a period in which you are a beneficiary of a trust

45285 Instalment income includes distributions by certain resident unit trusts

45286 Instalment income includes distributions by certain managed investment trusts

45287 When trusts are disqualified due to concentrated ownership

45288 Resident investment trusts for beneficiaries who are absolutely entitled

45290 Exceptions to exclusion of trust capital gains from beneficiary’s instalment income

Subdivision 45J—How Commissioner works out your instalment rate and notional tax

45320 Working out instalment rate

45325 Working out your notional tax

45330 Working out your adjusted taxable income

45335 Working out your adjusted withholding income

45340 Adjusted tax on adjusted taxable income or on adjusted withholding income

Subdivision 45K—How Commissioner works out your benchmark instalment rate and benchmark tax

45355 When Commissioner works out benchmark instalment rate and benchmark tax

45360 How Commissioner works out benchmark instalment rate

45365 Working out your benchmark tax

45370 Working out your adjusted assessed taxable income for the variation year

45375 Adjusted assessed tax on adjusted assessed taxable income

Subdivision 45L—How Commissioner works out amount of quarterly instalment on basis of GDPadjusted notional tax

45400 Working out amount of instalment—payers of 4 quarterly instalments

45402 Working out amount of instalment—payers of 2 quarterly instalments

45405 Working out your GDPadjusted notional tax

Subdivision 45M—How amount of quarterly instalment is worked out on basis of your estimate of your benchmark tax

45410 Working out amount of instalment—payers of 4 quarterly instalments

45412 Working out amount of instalment—payers of 2 quarterly instalments

45415 Estimating your benchmark tax

45420 Credit in certain cases where amount of instalment is nil

Subdivision 45N—How this Part applies to the trustee of a trust

Trustees to whom this Part applies

45450 Trustees to whom a single instalment rate is given

45455 Trustees to whom several instalment rates are given

45460 Rest of Subdivision applies only to multirate trustees

45465 Meaning of instalment income

45468 Multirate trustee may pay quarterly instalments

How Commissioner works out instalment rate and notional tax for a multirate trustee

45470 Working out instalment rate

45473 Commissioner must notify you of notional tax

45475 Working out your notional tax

45480 Working out your adjusted taxable income

45483 Meaning of reduced beneficiary’s share and reduced no beneficiary’s share

45485 Working out your adjusted withholding income

How Commissioner works out benchmark instalment rate and benchmark tax for a multirate trustee

45525 When Commissioner works out benchmark instalment rate and benchmark tax

45530 How Commissioner works out benchmark instalment rate

45535 Working out your benchmark tax

Subdivision 45P—Antiavoidance rules

45595 Object of this Subdivision

45597 Effect of Subdivision in relation to instalment months

45600 General interest charge on tax benefit relating to instalments

45605 When do you get a tax benefit from a scheme?

45610 What is your tax position for an income year?

45615 What is your hypothetical tax position for an income year?

45620 Amount on which GIC is payable, and period for which it is payable

45625 Credit if you also got a tax detriment from the scheme

45630 When do you get a tax detriment from a scheme?

45635 No tax benefit or detriment results from choice for which income tax law expressly provides

45640 Commissioner may remit general interest charge in special cases

Subdivision 45Q—General rules for consolidated groups

Guide to Subdivision 45Q

45700 What this Subdivision is about

Application of Subdivision

45703 Effect of this Subdivision and Subdivision 45R in relation to monthly payers

45705 Application of Subdivision to head company

Usual operation of this Part for consolidated group members

45710 Single entity rule

45715 When instalments are due—modification of section 4561

45720 Head company cannot be an annual payer—modification of section 45140

Membership changes

45740 Change of head company

45755 Entry rule (for an entity that becomes a subsidiary member of a consolidated group)

45760 Exit rule (for an entity that ceases to be a subsidiary member of a consolidated group)

45775 Commissioner’s power to work out different instalment rate or GDPadjusted notional tax

Subdivision 45R—Special rules for consolidated groups

Guide to Subdivision 45R

45850 What this Subdivision is about

Operative provisions

45855 Section 7011 disregarded for certain purposes

45860 Member having a different instalment period

45865 Credit rule

45870 Head company’s liability to GIC on shortfall in quarterly instalment

45875 Other rules about the general interest charge

45880 Continued application of Subdivision 45Q to the head company of an acquired group

45885 Early application of Subdivision 45Q to the head company of a new group

Subdivision 45S—MEC groups

Guide to Subdivision 45S

45900 What this Subdivision is about

Preliminary

45905 Objects of Subdivision

General modification rules

45910 Extended operation of Part to cover MEC groups

Extended operation of Subdivision 45Q

45913 Sections 45705 and 45740 do not apply to members of MEC groups

45915 Application of Subdivision 45Q to provisional head company

45917 Assumption for applying section 45710 (single entity rule)

45920 Change of provisional head company

45922 Life insurance company

Extended operation of Subdivision 45R

45925 Additional modifications of sections 45855 and 45860

45930 Modifications of sections 45865 and 45870 and a related provision

45935 Additional modifications of section 45885

Part 215—Returns and assessments

Division 70Tax receipts

Guide to Division 70 146

701 What this Division is about

Subdivision 70A—Tax receipts

705 Tax receipt to be provided to certain individual taxpayers

Part 230—Collecting Medicare levy with income tax

Division 90Medicare levy and Medicare levy surcharge

Subdivision 90A—Treatment like income tax

901 Laws apply in relation to Medicare levy and Medicare levy surcharge as they apply in relation to income tax

Part 235—Excess superannuation contributions

Division 97—Excess contributions determinations

Subdivision 97A—Excess concessional contributions determinations

Guide to Subdivision 97A

971 What this Subdivision is about

Operative provisions

975 Determination of excess concessional contributions

9710 Review

Subdivision 97B—Excess nonconcessional contributions determinations

Guide to Subdivision 97B

9720 What this Subdivision is about

Operative provisions

9725 Excess nonconcessional contributions determinations

9730 Associated earnings

9735 Review

Chapter 3—Collection, recovery and administration of other taxes

Part 310—Indirect taxes

Division 105—General rules for indirect taxes

Guide to Division 105 154

1051 What this Division is about

Subdivision 105D—General interest charge and penalties

10580 General interest charge

10585 Amending Acts cannot impose penalties or general interest charge earlier than 28 days after Royal Assent

Subdivision 105F—Indirect tax refund schemes

105120 Refund scheme—defence related international obligations

105125 Refund scheme—international obligations

Subdivision 105G—Other administrative provisions

105145 Commissioner must give things in writing

Division 110—Goods and services tax

Guide to Division 110 159

1101 What this Division is about

Subdivision 110F—Review of GST decisions

11050 Reviewable GST decisions

Division 111—Wine tax and luxury car tax

Guide to Division 111 164

1111 What this Division is about

Subdivision 111C—Review of wine tax decisions

11150 Reviewable wine tax decisions

Subdivision 111D—Effect on contracts from amendments to laws

11160 Alteration of contracts if cost of complying with agreement is affected by later alteration to wine tax or luxury car tax laws

Division 112—Fuel tax

Guide to Division 112 167

1121 What this Division is about

Subdivision 112E—Review of fuel tax decisions

11250 Reviewable fuel tax decisions

Part 315—Major bank levy

Division 115General provisions relating to the major bank levy

1151 What this Division is about

1155 Returns

11510 When major bank levy is due and payable

Division 117—Antiavoidance

Guide to Division 117 171

1171 What this Division is about

Subdivision 117A—Application of this Division

1175 Object of this Division

11710 Application of this Division

11715 Meaning of MBL benefit

11720 Matters to be considered in determining purpose

Subdivision 117B—Commissioner may negate effects of schemes for MBL benefits

11725 Commissioner may negate entity’s MBL benefits

11730 Determination has effect according to its terms

11735 Commissioner may disregard scheme in making determinations

11740 One determination may cover several quarters etc.

11745 Commissioner must give copy of determination to entity affected

11750 Objections

Part 317—Laminaria and Corallina decommissioning levy

Division 125—General provisions relating to Laminaria and Corallina decommissioning levy

1251 What this Division is about

Operative provisions

1255 Returns

12510 When Laminaria and Corallina decommissioning levy and related charges are due and payable

12515 Assessments of Laminaria and Corallina decommissioning levy

Part 320—Superannuation

Division 131—Releasing money from superannuation

Subdivision 131A—Releasing money from superannuation

Guide to Subdivision 131A

1311 What this Subdivision is about

Requesting a release authority

1315 Requesting the release of amounts from superannuation interests

13110 Restrictions on the total amount you can request to be released

Issuing a release authority to superannuation provider

13115 Issuing release authorities

13120 Amount to be stated in a release authority

13125 Contents of a release authority

13130 Varying and revoking a release authority

Complying with a release authority

13135 Obligations of superannuation providers

13140 Voluntary compliance with a release authority relating to defined benefit interests

13145 Meaning of maximum available release amount

13150 Notifying Commissioner

13155 Notifying you

13160 Compensation for acquisition of property

Consequences of releasing amounts

13165 Entitlement to credits

13170 Interest for late payments of money received by the Commissioner in accordance with release authority

13175 Income tax treatment of amounts released—proportioning rule does not apply

Division 133—Division 293 tax

Guide to Division 133 190

1331 What this Division is about

Subdivision 133A—Deferral determination

Guide to Subdivision 133A

1335 What this Subdivision is about

Operative provisions

13310 Determination of tax that is deferred to a debt account

13315 Defined benefit tax

13320 How to attribute the defined benefit tax to defined benefit interests

13325 Determination reducing tax deferred to a debt account

13330 General provisions applying to determinations under this Subdivision

Subdivision 133B—Debt account

Guide to Subdivision 133B

13355 What this Subdivision is about

Operative provisions

13360 Debt account to be kept for deferred tax

13365 Interest on debt account balance

13370 Voluntary payments

13375 Commissioner must notify superannuation provider of debt account

Subdivision 133C—Compulsory payment

Guide to Subdivision 133C

133100 What this Subdivision is about

Debt account discharge liability

133105 Liability to pay debt account discharge liability

133110 When debt account discharge liability must be paid

133115 General interest charge

133120 Meaning of debt account discharge liability

133125 Notice of debt account discharge liability

End benefit

133130 Meaning of end benefit

133135 Superannuation provider may request debt account status

133140 End benefit notice—superannuation provider

133145 End benefit notice—material changes or omissions

Division 135—Releasing money from superannuation

Guide to Division 135 204

1351 What this Division is about

Subdivision 135A—When the Commissioner must issue a release authority

Guide to Subdivision 135A

1355 What this Subdivision is about

Operative provisions

13510 Release authorities

Subdivision 135B—When a release authority can be given to a superannuation provider

Guide to Subdivision 135B

13535 What this Subdivision is about

Operative provisions

13540 When you may give release authority to superannuation provider

Subdivision 135C—Release of superannuation money under a release authority

Guide to Subdivision 135C

13570 What this Subdivision is about

Operative provisions

13575 Requirement for superannuation provider to release money

13580 Compensation for acquisition of property

13585 Release amount

13590 How the Commissioner applies amounts received under a release authority

13595 Defined benefit interests—releasing amounts to pay debt account discharge liability

135100 Income tax treatment of amounts released—proportioning rule does not apply

Division 136—Transfer balance cap

Guide to Division 136 211

1361 What this Division is about

Subdivision 136A—Excess transfer balance determinations

Guide to Subdivision 136A

1365 What this Subdivision is about

Operative provisions

13610 Excess transfer balance determination

13615 Review

13620 Electing to commute a different superannuation income stream

13625 Notifying Commissioner of transfer balance debits

Subdivision 136B—Commutation authorities

Guide to Subdivision 136B

13650 What this Subdivision is about

Obligations of Commissioner

13655 Issuing of commutation authorities

13660 Varying and revoking a commutation authority

13665 Issuing further commutation authorities

13670 Notifying of noncommutable excess transfer balance

Obligations of superannuation income stream providers

13680 Obligations on superannuation income stream providers

13685 Notifying the Commissioner

13690 Notifying you

Division 138—First home super saver scheme

Guide to Division 138 221

1381 What this Division is about

Subdivision 138A—First home super saver determination

Guide to Subdivision 138A

1385 What this Subdivision is about

Operative provisions

13810 First home super saver determination

13815 Review

Subdivision 138B—FHSS maximum release amount

Guide to Subdivision 138B

13820 What this Subdivision is about

Operative provisions

13825 FHSS maximum release amount

13830 FHSS releasable contributions amount

13835 Eligible contributions

13840 Associated earnings

Part 330—Diverted profits tax

Division 145—Assessments of diverted profits tax

Guide to Division 145 228

1451 What this Division is about

1455 DPT assessments—modified application of Division 155

14510 When DPT assessments can be made

14515 Period of review of DPT assessments

14520 Review of assessments

14525 Restricted DPT evidence

Chapter 4—Generic assessment, collection and recovery rules

Part 41—Returns and assessments

Division 155—Assessments

Guide to Division 155 234

1551 What this Division is about

Subdivision 155A—Making assessments

1555 Commissioner may make assessment

15510 Commissioner must give notice of assessment

15515 Selfassessment

15520 Assessment of indirect tax on importations and customs dealing

15525 Special assessment

15530 Delays in making assessments

Subdivision 155B—Amending assessments

When Commissioner may amend assessments

15535 Amendment during period of review

15540 Amendment during period of review—certain applications taken to be notices

15545 Amendment on application

15550 Amendment to give effect to private ruling

15555 Amendment to give effect to certain antiavoidance declarations

15560 Amendment because of review, objection or fraud

Special rules about amending amended assessments

15565 Amending amended assessments

15570 Refreshed period of review

General rules

15575 Refunds of amounts overpaid

15580 Amended assessments are assessments

Subdivision 155C—Validity and review of assessments

15585 Validity of assessment

15590 Review of assessments

Subdivision 155D—Miscellaneous

15595 Entities

Part 415—Collection and recovery of taxrelated liabilities and other amounts

Division 250—Introduction

Subdivision 250A—Guide to Part 415

2501 What this Part is about

2505 Some important concepts about taxrelated liabilities

25010 Summary of taxrelated liabilities

Subdivision 250B—Object of this Part

25025 Object

Division 255—General rules about collection and recovery

Subdivision 255A—Taxrelated liabilities

2551 Meaning of taxrelated liability

2555 Recovering a taxrelated liability that is due and payable

Subdivision 255B—Commissioner’s power to vary payment time

25510 To defer the payment time

25515 To permit payments by instalments

25520 To bring forward the payment time in certain cases

Subdivision 255C—Service of documents if person absent from Australia or cannot be found

Guide to Subdivision 255C

25535 What this Subdivision is about

Operative provisions

25540 Service of documents if person absent from Australia or cannot be found

Subdivision 255D—Security deposits

255100 Commissioner may require security deposit

255105 Notice of requirement to give security

255110 Offence

255115 Order to comply with requirement

255120 Offence

Division 260—Special rules about collection and recovery

Guide to Division 260 268

2601 What this Division is about

Subdivision 260A—From third party

2605 Commissioner may collect amounts from third party

26010 Notice to Commonwealth, State or Territory

26015 Indemnity

26020 Offence

Subdivision 260B—From liquidator

26040 Subdivision does not apply to superannuation guarantee charge

26045 Liquidator’s obligation

26050 Offence

26055 Joint liability of 2 or more liquidators

26060 Liquidator’s other obligation or liability

Subdivision 260C—From receiver

26075 Receiver’s obligation

26080 Offence

26085 Joint liability of 2 or more receivers

26090 Receiver’s other obligation or liability

Subdivision 260D—From agent winding up business for foreign resident principal

260105 Obligation of agent winding up business for foreign resident principal

260110 Offence

260115 Joint liability of 2 or more agents

260120 Agent’s other obligation or liability

Subdivision 260E—From deceased person’s estate

260140 Administered estate

260145 Unadministered estate

260150 Commissioner may authorise amount to be recovered

Division 263—Mutual assistance in the administration of foreign tax laws

Subdivision 263A—Foreign revenue claims

Guide to Subdivision 263A

2635 What this Subdivision is about

Operative provisions

26310 Meaning of foreign revenue claim

26315 Requirements for foreign revenue claims

26320 Foreign Revenue Claims Register

26325 Registering claims

26330 When amount is due and payable

26335 Amending the Register etc.

26340 Payment to competent authority

Subdivision 263B—Service of documents in Australia on behalf of foreign revenue authorities

Guide to Subdivision 263B

26355 What this Subdivision is about

Operative provisions

26360 Meaning of foreign service of document request

26365 Service of document subject to foreign service of document request

Division 265—Other matters

Subdivision 265A—Right of person to seek recovery or contribution

Guide to Subdivision 265A

26535 What this Subdivision is about

Operative provisions

26540 Right of recovery if another person is liable

26545 Right of contribution if persons are jointly liable

Subdivision 265B—Application of laws

26565 Nonapplication of certain taxation laws

Subdivision 265C—Direction to pay superannuation guarantee charge

Guide to Subdivision 265C

26585 What this Subdivision is about

26590 Direction to pay superannuation guarantee charge

26595 Offence

265100 Variation or revocation

265105 Effect of liability being reduced or ceasing to exist

265110 Taxation objection

265115 Extension of period to comply if taxation objection made

Division 268—Estimates

Guide to Division 268 296

2681 What this Division is about

Subdivision 268A—Object

2685 Object of Division

Subdivision 268B—Making estimates

26810 Commissioner may make estimate

26815 Notice of estimate

Subdivision 268C—Liability to pay estimates

26820 Nature of liability to pay estimate

26825 Accuracy of estimate irrelevant to liability to pay

26830 Estimate provable in bankruptcy or winding up

Subdivision 268D—Reducing and revoking estimates

26835 How estimate may be reduced or revoked—Commissioner’s powers

26840 How estimate may be reduced or revoked—statutory declaration or affidavit

26845 How estimate may be reduced or revoked—rejection of proof of debt

26850 How estimate may be reduced—amount paid or applied

26855 When reduction or revocation takes effect

26860 Consequences of reduction or revocation—refund

26865 Consequences of reduction or revocation—statutory demand changed or set aside

26870 Consequences of reduction or revocation—underlying liability

Subdivision 268E—Late payment of estimates

26875 Liability to pay the general interest charge

26880 Effect of paying the general interest charge

Subdivision 268F—Miscellaneous

26885 Effect of judgment on liability on which it is based

26890 Requirements for statutory declaration or affidavit

26895 Liquidators, receivers and trustees in bankruptcy

268100 Division not to limit or exclude Corporations or Bankruptcy Act

Division 269—Penalties for directors of noncomplying companies

Guide to Division 269 320

2691 What this Division is about

Subdivision 269A—Object and scope

2695 Object of Division

26910 Scope of Division

Subdivision 269B—Obligations and penalties

26915 Directors’ obligations

26920 Penalty

26925 Notice

26930 Effect on penalty of directors’ obligation ending before end of notice period

26935 Defences

Subdivision 269C—Discharging liabilities

26940 Effect of director paying penalty or company discharging liability

26945 Directors’ rights of indemnity and contribution

Subdivision 269D—Miscellaneous

26950 How notice may be given

26952 Copies of notices

26955 Division not to limit or exclude Corporations Act

Part 425—Charges and penalties

Division 280—Shortfall interest charge

Guide to Division 280 338

2801 Guide to Division 280

Subdivision 280A—Object of Division

28050 Object of Division

Subdivision 280B—Shortfall interest charge

280100 Liability to shortfall interest charge—income tax

280101 Liability to shortfall interest charge—excess exploration credit tax

280102 Liability to shortfall interest charge—petroleum resource rent tax

280102A Liability to shortfall interest charge—excess nonconcessional contributions tax

280102B Liability to shortfall interest charge—Division 293 tax

280102C Liability to shortfall interest charge—diverted profits tax

280102D Liability to shortfall interest charge—Laminaria and Corallina decommissioning levy

280103 Liability to shortfall interest charge—general

280105 Amount of shortfall interest charge

280110 Notification by Commissioner

Subdivision 280C—Remitting shortfall interest charge

280160 Remitting shortfall interest charge

280165 Commissioner must give reasons for not remitting in certain cases

280170 Objecting against remission decision

Division 284—Administrative penalties for statements, unarguable positions and schemes

Guide to Division 284 350

2845 What this Division is about

Subdivision 284A—General provisions

28410 Object of Division

28415 When a matter is reasonably arguable

28420 Which statements this Division applies to

28425 Statements by agents

28430 Application of Division to trusts

28435 Application of Division to partnerships

Subdivision 284B—Penalties relating to statements

Guide to Subdivision 284B

28470 What this Subdivision is about

Operative provisions

28475 Liability to penalty

28480 Shortfall amounts

28485 Amount of penalty

28490 Base penalty amount

28495 Joint and several liability of directors of corporate trustee that makes a false or misleading statement

Subdivision 284C—Penalties relating to schemes

Guide to Subdivision 284C

284140 What this Subdivision is about

Operative provisions

284145 Liability to penalty

284150 Scheme benefits and scheme shortfall amounts

284155 Amount of penalty

284160 Base penalty amount: schemes

284165 Exception—threshold for penalty arising from crossborder transfer pricing

Subdivision 284D—Provisions common to Subdivisions 284B and 284C

284220 Increase in base penalty amount

284224 Reduction of base penalty amount if law was applied in an accepted way

284225 Reduction of base penalty amount if you voluntarily tell the Commissioner

Subdivision 284E—Special rules about unarguable positions for crossborder transfer pricing

284250 Undocumented transfer pricing treatment not reasonably arguable

284255 Documentation requirements

Division 286—Penalties for failing to lodge documents on time

Subdivision 286A—Guide to Division 286

2861 What this Division is about

Subdivision 286B—Object of Division

28625 Object of Division

Subdivision 286C—Penalties for failing to lodge documents on time

28675 Liability to penalty

28680 Amount of penalty

Division 288—Miscellaneous administrative penalties

28810 Penalty for nonelectronic notification

28820 Penalty for nonelectronic payment

28825 Penalty for failure to keep or retain records

28830 Penalty for failure to retain or produce declarations

28835 Penalty for preventing access etc.

28840 Penalty for failing to register or cancel registration

28845 Penalty for failing to issue tax invoice etc.

28846 Penalty for failing to ensure tax information about supplies of low value goods is included in customs documents

28850 Penalty for both principal and agent issuing certain documents

28870 Administrative penalties for life insurance companies

28875 Administrative penalty for a copyright or resale royalty collecting society

28880 Administrative penalty for over declaring conduit foreign income

28885 Failure by Reporting Financial Institution to obtain selfcertification

28895 Failing to comply etc. with release authority

288100 Excess money paid under release authority

288105 Superannuation provider to calculate crystallised preJuly 83 amount of superannuation interest by 30 June 2008

288110 Contravention of superannuation data and payment regulation or standard

288115 AMIT under or over resulting from intentional disregard of or recklessness as to taxation law

288120 Prohibited offsets of liabilities using interest etc. accrued on farm management deposits

288125 Producing or supplying electronic sales suppression tools

288130 Possessing electronic sales suppression tools

288135 Incorrectly keeping records using electronic sales suppression tools

Division 290—Promotion and implementation of schemes

Subdivision 290A—Preliminary

2905 Objects of this Division

29010 Extraterritorial application

Subdivision 290B—Civil penalties

29050 Civil penalties

29055 Exceptions

29060 Meaning of promoter

29065 Meaning of tax exploitation scheme

Subdivision 290C—Injunctions

290120 Conduct to which this Subdivision applies

290125 Injunctions

290130 Interim injunctions

290135 Delay in making ruling

290140 Discharge etc. of injunctions

290145 Certain limits on granting injunctions not to apply

290150 Other powers of the Federal Court unaffected

Subdivision 290D—Voluntary undertakings

290200 Voluntary undertakings

Division 295—Miscellaneous civil penalties

Subdivision 295B—Civil penalty for possession of tobacco without relevant documentation

Guide to Subdivision 295B

29570 What this Subdivision is about

29575 Possession of tobacco without relevant documentation etc.

29580 Things treated as tobacco

Division 298—Machinery provisions for penalties

Subdivision 298A—Administrative penalties

2985 Scope of Subdivision

29810 Notification of liability

29815 Due date for penalty

29820 Remission of penalty

29825 General interest charge on unpaid penalty

29830 Assessment of penalties under Division 284 or section 288115

Subdivision 298B—Civil penalties

29880 Application of Subdivision

29885 Civil evidence and procedure rules for civil penalty orders

29890 Civil proceedings after criminal proceedings

29895 Criminal proceedings during civil proceedings

298100 Criminal proceedings after civil proceedings

298105 Evidence given in proceedings for penalty not admissible in criminal proceedings

298110 Civil double jeopardy

Schedule 1Collection and recovery of income tax and other liabilities

Chapter 2Collection, recovery and administration of income tax

Part 210Pay as you go (PAYG) instalments

Division 45Instalment payments

Table of Subdivisions

 Guide to Division 45

45A Basic rules

45B When instalments are due

45C Working out instalment amounts

45D Quarterly payers

45E Annual payers

45F Varying the instalment rate for quarterly payers who pay on the basis of instalment income

45G General interest charge payable in certain cases if instalments are too low

45H Partnership income

45I Trust income included in instalment income of beneficiary

45J How Commissioner works out your instalment rate and notional tax

45K How Commissioner works out your benchmark instalment rate and benchmark tax

45L How Commissioner works out amount of quarterly instalment on basis of GDPadjusted notional tax

45M How amount of quarterly instalment is worked out on basis of your estimate of your benchmark tax

45N How this Part applies to the trustee of a trust

45P Antiavoidance rules

45Q General rules for consolidated groups

45R Special rules for consolidated groups

45S MEC groups

Guide to Division 45

451  What this Division is about

If you have business or investment income, you must pay instalments towards your income tax liability. However, you do not have to do so unless the Commissioner has given you an instalment rate. Generally, instalments are payable for each quarter of your income year. Alternatively, instalments could be payable monthly or annually.

Your instalments may be based on your previous year’s income tax liability and notified to you by the Commissioner, or on your estimate of your income tax liability for the current income year. (In this case, you are a quarterly payer who pays on the basis of GDP adjusted notional tax). Generally, four quarterly instalments are payable annually on this basis, but you may only be required to pay two.

If you are not eligible to pay instalments on that basis, or if you are so eligible but choose not to do so, you must work out the amount of your quarterly instalment by multiplying your instalment income for an instalment quarter by the rate the Commissioner gave you, or by a rate you choose yourself. (In this case, you are a quarterly payer who pays on the basis of instalment income).

If your business or investment income exceeds a certain limit, you may have to pay an instalment after the end of each month. (In this case, you are a monthly payer).

If you are not required to be registered for GST purposes, you may be able to choose to pay an annual instalment after the end of the income year. (In this case, you are an annual payer).

The amount of annual instalment can be your instalment income for the income year multiplied by the rate the Commissioner gave you, or an amount based on your previous year’s income tax liability and notified to you by the Commissioner, or your own estimate of your income tax liability for the income year.

Subdivision 45ABasic rules

Table of sections

455 Object of this Part

4510 Application of Part

4515 Liability for instalments

4520 Information to be given to the Commissioner by certain payers

4525 Penalty for failure to notify Commissioner

4530 Credit for instalments payable

455  Object of this Part

 (1) The object of this Part is to ensure the efficient collection of:

 (a) income tax; and

 (b) *Medicare levy; and

 (ca) amounts of liabilities to the Commonwealth under Chapter 4 of the Higher Education Support Act 2003; and

 (caa) amounts of liabilities to the Commonwealth under Part 3A of the VET Student Loans Act 2016; and

 (cb) amounts of liabilities to the Commonwealth under Chapter 2AA of the Social Security Act 1991; and

 (cc) amounts of liabilities to the Commonwealth under Part 2 of the Student Assistance Act 1973; and

 (cd) amounts of liabilities to the Commonwealth under Chapter 3 of the Australian Apprenticeship Support Loans Act 2014; and

 (d) amounts of liabilities to the Commonwealth under Part 2B.3 of the Social Security Act 1991; and

 (e) amounts of liabilities to the Commonwealth under Division 6 of Part 4A of the Student Assistance Act 1973;

through the application of the principles set out in the rest of this section.

 (2) As you earn *instalment income, you pay instalments after the end of each *instalment quarter worked out on the basis of your instalment income for that quarter if you are required or choose to work out your instalment on this basis. However, you may be able to pay an amount notified by the Commissioner. (There are exceptions to this).

 (2A) Alternatively:

 (a) you may be required to pay instalments after the end of each *instalment month worked out on the basis of your instalment income for that month; or

 (b) you may be able to choose to pay an annual instalment for the income year.

 (3) The total of your instalments for an income year is as close as possible to the total of your liabilities for the income year that are covered by subsection (1), except so far as the amounts of those liabilities are attributable to a *net capital gain. (The exception does not apply to the entities listed in subsections 45120(2) and (2A) or the net capital gains specified in subsection 45120(2B).)

 (4) Consequently, the additional amounts you have to pay to discharge those liabilities, after an assessment of your income tax for the income year is made, are as low as possible.

 (5) If you are a *quarterly payer who pays on the basis of instalment income, the amount of each of your instalments for an income year is the same proportion (as nearly as possible, subject to the principles in subsections (3) and (4)) of the total of those instalments as your *instalment income for that *instalment quarter is of your total instalment income for the income year.

 (5A) If you are a *monthly payer, the amount of each of your instalments for an income year is the same proportion (as nearly as possible, subject to the principles in subsections (3) and (4)) of the total of those instalments as your *instalment income for that *instalment month is of your total instalment income for the income year.

 (6) When instalments are payable, and how their amount is calculated, are the same for different kinds of entities, except as expressly provided.

Note: Subdivision 45P penalises an entity whose tax position, so far as it relates to PAYG instalments and related matters, is altered by a scheme that is inconsistent with the object of this Part.

4510  Application of Part

  This Part applies to individuals, companies, and the entities listed in items 4 to 10, and 12 and 13, of the table in section 91 of the Income Tax Assessment Act 1997 (which lists the entities that must pay income tax).

Note 1: Section 45450 provides for how this Part applies to a trustee covered by any of items 4 to 8, and 12 and 13, of the table in section 91 of the Income Tax Assessment Act 1997. In most respects, the trust is treated like a company.

Note 2: This Part also applies to a trustee covered by item 11 of the table in section 91 of the Income Tax Assessment Act 1997, but only to the extent set out in section 45455, and the rest of Subdivision 45N, in this Schedule.

4515  Liability for instalments

 (1) The Commissioner may give you an instalment rate from time to time, by giving you written notice of the rate.

 (2) You are liable to pay instalments under this Division if the Commissioner has given you an instalment rate.

Note 1: The instalment rate that the Commissioner gives you is worked out under section 45320 or 45775.

Note 2: If your assessable income has always consisted wholly of withholding payments (other than nonquotation withholding payments), the Commissioner will not give you an instalment rate.

Note 3: Work out the amount of your instalments under Subdivision 45C.

Note 4: If the Commissioner withdraws the rate under section 4590, you are not liable to pay further instalments.

Note 5: For provisions about collection and recovery of amounts you are liable to pay under this Part, see Part 415.

4520  Information to be given to the Commissioner by certain payers

 (1) If you are liable to pay an instalment for a period (even if it is a nil amount), you must notify the Commissioner of the amount of your *instalment income for the period.

 (2) You must notify the Commissioner in the *approved form and on or before the day when the instalment is due (regardless of whether it is paid).

 (2A) If you are a *monthly payer for the period, you must give the notification electronically, unless the Commissioner otherwise approves.

Note: A penalty applies if you fail to give the notification electronically as required—see section 28810.

 (2B) The notification is given electronically if it is transmitted to the Commissioner in an electronic format approved by the Commissioner.

Exceptions

 (3) Subsection (1) does not apply to:

 (a) a quarterly instalment worked out under section 45112 (on the basis of GDPadjusted notional tax or estimated benchmark tax); or

 (b) an annual instalment, unless it is worked out under paragraph 45115(1)(a) (based on the Commissioner’s rate and your instalment income for the income year).

4525  Penalty for failure to notify Commissioner

 (1) If you fail to notify the Commissioner of an amount as required by section 4520, or you notify an amount that is less than the correct amount, you are liable to pay the *failure to notify penalty on the amount, or on the shortfall, multiplied by the instalment rate that you are required to use to work out the instalment for the period, for each day in the period that:

 (a) started at the beginning of the day by which the amount was due to be paid; and

 (b) finishes at the end of the day before you notify the Commissioner of the correct amount, or he or she otherwise becomes aware of it.

 (2) This section does not apply to a notification required to be lodged on or after 1 July 2000.

Note: See instead Division 286 in Schedule 1 to the Taxation Administration Act 1953.

4530  Credit for instalments payable

 (1) You are entitled to a credit when the Commissioner makes an assessment of the income tax you are liable to pay for an income year or an assessment that no income tax is payable by you for an income year.

 (2) The credit is equal to:

  the total of each instalment payable by you for the income year (even if you have not yet paid it);

reduced by:

  the total of each credit that you have claimed under section 45215 or 45420 in respect of such an instalment.

 (3) The making of the assessment, and the resulting credit entitlement, do not affect the liability to pay an instalment.

Note: How the credit is applied is set out in Division 3 of Part IIB.

 (4) If:

 (a) you are a *subsidiary member of a *consolidated group at any time during a *consolidation transitional year for you; and

 (b) an amount of instalment payable by you, or an amount of credit claimed by you under section 45215 or 45420, is taken into account in working out a credit to which the *head company of that consolidated group is entitled under section 45865 for a consolidation transitional year for the head company;

that amount, to the extent to which it is so taken into account under that section, is not to be taken into account in working out any credit to which you are entitled under this section for any year.

Subdivision 45BWhen instalments are due

Table of sections

4550 Liability to pay instalments

4560 Meaning of instalment quarter

4561 When quarterly instalments are due—payers of quarterly instalments

4565 Meaning of instalment month

4567 When monthly instalments are due—payers of monthly instalments

4570 When annual instalments are due

4572 Means of payment of instalment

4575 Instalments recoverable in same way as income tax

4580 General interest charge on late payment

4590 Commissioner may withdraw instalment rate

4550  Liability to pay instalments

 (1) Subject to subsection (4), you are liable to pay an instalment for an *instalment quarter in an income year if, at the end of that instalment quarter, you are:

 (a) a *quarterly payer who pays 4 instalments annually on the basis of GDPadjusted notional tax; or

 (b) a *quarterly payer who pays on the basis of instalment income.

 (2) Subject to subsection (4), you are liable to pay an instalment for an *instalment quarter that is the third or fourth instalment quarter in an income year if, at the end of that quarter, you are a *quarterly payer who pays 2 instalments annually on the basis of GDPadjusted notional tax.

 (2A) Subject to subsection (4), you are liable to pay an instalment for an *instalment month if, at the end of that month, you are a *monthly payer.

 (3) Subject to subsection (4), you are liable to pay an instalment for an income year if, at the end of the *starting instalment quarter in that year, you are an *annual payer.

 (4) You are only liable to pay an instalment for an *instalment quarter, an *instalment month or an income year if:

 (a) the Commissioner has given you an instalment rate; and

 (b) the Commissioner has not withdrawn your instalment rate before the end of that quarter, month or year.

4560  Meaning of instalment quarter

  For an income year (whether it ends on 30 June or not), the following are the instalment quarters:

 (a) your first instalment quarter consists of the first 3 months of the income year; and

 (b) your second instalment quarter consists of the fourth, fifth and sixth months of the income year; and

 (c) your third instalment quarter consists of the seventh, eighth and ninth months of the income year; and

 (d) your fourth instalment quarter consists of the tenth, 11th and 12th months of the income year.

4561  When quarterly instalments are due—payers of quarterly instalments

You are not a deferred BAS payer

 (1) Subject to subsection (2), if you are:

 (a) a *quarterly payer who pays on the basis of instalment income; or

 (b) a *quarterly payer who pays 4 instalments annually on the basis of GDPadjusted notional tax; or

 (c) a *quarterly payer who pays 2 instalments annually on the basis of GDPadjusted notional tax;

the instalment for an *instalment quarter that you are liable to pay is due on or before the 21st day of the month after the end of that quarter.

Note: You are only liable to pay instalments for the third and fourth instalment quarters in an income year if you are a quarterly payer who pays 2 instalments annually on the basis of GDPadjusted notional tax. See section 4550.

You are a deferred BAS payer

 (2) If:

 (a) subsection (1) would, but for this subsection, have applied to you in relation to an *instalment quarter; but

 (b) you are a *deferred BAS payer on the 21st day of the month after the end of that quarter;

the instalment for that quarter is instead due on or before:

 (c) the 28th day of the month after the end of that quarter unless all or a part of a December falls within the last month of that quarter; or

 (d) if all or a part of a December falls within the last month of that quarter—the next 28 February.

Note 1: You are only liable to pay instalments for the third and fourth instalment quarters in an income year if you are a quarterly payer who pays 2 instalments annually on the basis of GDPadjusted notional tax. See section 4550.

Note 2: If you are the head company of a consolidated group to which Subdivision 45Q applies, the instalment is due on or before the 21st day of the month after the end of the quarter: see section 45715.

4565  Meaning of instalment month

  For an income year (whether it ends on 30 June or not), the following are instalment months:

 (a) the month that starts on the first day of the income year;

 (b) each subsequent month.

Note: For the meaning of month, see section 2G of the Acts Interpretation Act 1901.

4567  When monthly instalments are due—payers of monthly instalments

You are not a deferred BAS payer

 (1) If you are a *monthly payer, the instalment for an *instalment month that you are liable to pay is due on or before the 21st day of the next instalment month.

 (2) If:

 (a) subsection (1) would, but for this subsection, have applied to you in relation to an *instalment month; but

 (b) you are a *deferred BAS payer on the 21st day of the next instalment month;

the instalment for the month mentioned in paragraph (a) is instead due on or before:

 (c) the 28th day of that next instalment month unless that next instalment month is January; or

 (d) if that next instalment month is January—the next 28 February.

Note: If you are the head company of a consolidated group to which Subdivision 45Q applies, the instalment is due on or before the 21st day of that next month: see section 45715 (as it has effect because of section 45703).

4570  When annual instalments are due

 (1) This section applies if you are liable to pay an annual instalment for the 200203 income year or a later income year.

 (2) If the income year ends on 30 June, the instalment is due on or before the next 21 October.

 (3) If the income year ends on a day other than 30 June, the instalment is due on or before the 21st day of the fourth month after the end of the income year.

4572  Means of payment of instalment

  You must pay an instalment by *electronic payment, or any other means approved in writing by the Commissioner.

4575  Instalments recoverable in same way as income tax

  Instalments are to be treated as income tax for the purposes of sections 254 and 255 of the Income Tax Assessment Act 1936.

4580  General interest charge on late payment

  If you fail to pay some or all of an instalment by the time by which the instalment is due to be paid, you are liable to pay the *general interest charge on the unpaid amount for each day in the period that:

 (a) started at the beginning of the day by which the instalment was due to be paid; and

 (b) finishes at the end of the last day on which, at the end of the day, any of the following remains unpaid:

 (i) the instalment;

 (ii) general interest charge on any of the instalment.

4590  Commissioner may withdraw instalment rate

 (1) The Commissioner may:

 (a) by giving you written notice, withdraw your instalment rate; or

 (b) by legislative instrument, withdraw the instalment rate of a class of entities that includes you.

Note: If the Commissioner does so, you cease to be liable to pay instalments (even if you have chosen a rate under section 45205). See subsection 4550(4).

 (2) If the Commissioner withdraws your instalment rate and later gives you another one:

 (a) you are again liable to pay instalments in accordance with section 4550; and

 (b) this Division has effect as if the Commissioner has given you an instalment rate for the first time.

Subdivision 45CWorking out instalment amounts

Table of sections

45110 How to work out amount of quarterly instalment on instalment income basis

45112 Amount of instalment for quarterly payer who pays on basis of GDPadjusted notional tax

45114 How to work out amount of monthly instalment

45115 How to work out amount of annual instalment

45120 Meaning of instalment income

45110  How to work out amount of quarterly instalment on instalment income basis

 (1) Work out the amount of an instalment you are liable to pay for an *instalment quarter as follows if, at the end of that instalment quarter, you are a *quarterly payer who pays on the basis of instalment income:

Start formula Applicable instalment rate times Your *instalment income for that quarter end formula

 (2) For the purposes of the formula in subsection (1):

Applicable instalment rate means:

 (a) unless paragraph (b) or (c) applies—the most recent instalment rate given to you by the Commissioner under section 4515 before the end of that quarter; or

 (b) if you have chosen an instalment rate for that quarter under section 45205—that rate; or

 (c) if you have chosen an instalment rate under section 45205 for an earlier *instalment quarter in that income year (and paragraph (b) does not apply)—that rate.

Note: If you believe the Commissioner’s rate is not appropriate for the current income year, you may choose a different instalment rate under Subdivision 45F.

45112  Amount of instalment for quarterly payer who pays on basis of GDPadjusted notional tax

 (1) If, at the end of an *instalment quarter in an income year, you are a *quarterly payer who pays on the basis of GDPadjusted notional tax who is liable to pay an instalment for that quarter, the amount of your instalment for that quarter is:

 (a) unless paragraph (b) or (c) applies—the amount that the Commissioner works out under Subdivision 45L, and notifies to you, as the amount of the instalment; or

 (b) if you choose to work out the amount of the instalment on the basis of your estimate of your *benchmark tax for that income year, and you notify the Commissioner in accordance with subsection (2)—the amount worked out under Subdivision 45M; or

 (c) if paragraph (b) applied to your instalment for an earlier *instalment quarter in that income year—the amount that the Commissioner works out under Subdivision 45M, and notifies to you, as the amount of the instalment.

 (2) If the amount of the instalment is worked out under paragraph (1)(b) on the basis of your estimate of your *benchmark tax for the income year, you must notify the Commissioner in the *approved form, on or before the day when the instalment is due (disregarding subsection (3)), of the amount of that estimate.

 (3) If:

 (a) after the end of an *instalment quarter the Commissioner notifies you of an amount as the amount of your instalment for that quarter; and

 (b) the amount of your instalment for that quarter is not worked out under paragraph (1)(b);

the instalment is due on or before the 21st day after the day on which the notice is given.

45114  How to work out amount of monthly instalment

 (1) Work out the amount of an instalment you are liable to pay for an *instalment month as follows if, at the end of that instalment month, you are a *monthly payer:

  Start formula Applicable instalment rate times Your *instalment income for that instalment month end formula

 (2) For the purposes of the formula in subsection (1):

applicable instalment rate means:

 (a) unless paragraph (b) or (c) applies—the most recent instalment rate given to you by the Commissioner under section 4515 before the end of that month; or

 (b) if you have chosen an instalment rate for that month under section 45205—that rate; or

 (c) if you have chosen an instalment rate under section 45205 for an earlier *instalment month in that income year (and paragraph (b) does not apply)—that rate.

Note: If you believe the Commissioner’s rate is not appropriate for the current income year, you may choose a different instalment rate under Subdivision 45F.

 (3) The Commissioner may, by legislative instrument, determine one or more specified additional methods by which a specified class of entity that is a *monthly payer at the end of an *instalment month may work out, in specified circumstances, the amount of an instalment that it is liable to pay for the instalment month.

Note: For specification by class, see subsection 13(3) of the Legislation Act 2003.

 (4) You may choose a method specified in the determination:

 (a) unless paragraph (b) applies—for any *instalment month; or

 (b) if the determination provides that that method can be chosen only for the first instalment month in an *instalment quarter—for the first instalment month in an instalment quarter.

 (5) The determination may provide that an entity that chooses a method in accordance with paragraph (4)(b) for the first *instalment month in an *instalment quarter is taken to have chosen that method under subsection (4) for the other instalment months in that quarter. The determination has effect accordingly.

 (6) Subsection (7) applies if:

 (a) the Commissioner has made a determination under subsection (3); and

 (b) at the end of an *instalment month, you are a *monthly payer; and

 (c) you choose under subsection (4), for that month:

 (i) if the determination specifies one additional method to work out that amount—that method; or

 (ii) if the determination specifies more than one additional method to work out that amount—one of those methods.

 (7) Despite subsection (1), work out the amount of an instalment you are liable to pay for that *instalment month in accordance with the method that you chose for that month under subsection (4).

45115  How to work out amount of annual instalment

 (1) The amount of an instalment you are liable to pay for the 200203 income year or a later income year is whichever of the following you choose:

 (a) the amount worked out using the formula:

Start formula *Commissioner's instalment rate times Your *instalment income for the income year end formula

 (b) your most recent *notional tax notified by the Commissioner before the end of the income year;

 (c) the amount that you estimate will be your *benchmark tax for the income year.

Note 1: You cannot choose a different instalment rate under Subdivision 45F if you are an annual payer. Instead you can work out the amount of your instalment under paragraph (c).

Note 2: You may be liable to general interest charge under section 45235 if working out your instalment under paragraph (c) leads you to pay an instalment that is less than 85% of your benchmark tax for the income year (worked out by the Commissioner under section 45365).

 (2) Commissioner’s instalment rate for an income year means the most recent instalment rate given to you by the Commissioner before the end of the income year.

 (3) If you choose to work out your instalment under paragraph (1)(c), you must notify the Commissioner, in the *approved form, of the amount of the instalment on or before the day when it is due.

45120  Meaning of instalment income

General rule

 (1) Your instalment income for a period includes your *ordinary income *derived during that period, but only to the extent that it is assessable income of the income year that is or includes that period.

Note 1: No other amount is instalment income unless it is covered by another provision of this section or by Subdivision 45H or 45I.

Note 1A: The operation of this section and other provisions relating to instalment income is affected by sections 45855 and 45860 (about a member of a consolidated group during a period before the members of the group are treated as a single entity for the purposes of this Part.)

Note 2: If during that period you are a partner in a partnership, or a beneficiary of a trust, your instalment income also includes some of the partnership’s or trust’s instalment income for the period (except in some cases). See Subdivision 45H or 45I.

Statutory income included for some entities

 (2) The instalment income of:

 (a) a *complying approved deposit fund or a *noncomplying approved deposit fund; or

 (b) a *complying superannuation fund or a *noncomplying superannuation fund; or

 (c) a *pooled superannuation trust;

for a period also includes the entity’s *statutory income, to the extent that:

 (d) it is reasonably attributable to that period; and

 (e) it is assessable income of the income year that is or includes that period.

 (2A) The instalment income of a *life insurance company for a period also includes any part of its *statutory income that:

 (a) is reasonably attributable to that period; and

 (b) is included in the *complying superannuation class of its taxable income for the income year that is or includes that period.

Net gains under Subdivision 250E of the Income Tax Assessment Act 1997 included in instalment income

 (2B) Your instalment income for a period also includes the difference between:

 (a) a gain (or gains) you make from a *financial arrangement to the extent to which it is (or they are):

 (i) assessable under Subdivision 250E of the Income Tax Assessment Act 1997; and

 (ii) reasonably attributable to that period; and

 (b) a loss (or losses) you make from a financial arrangement to the extent to which it is (or they are):

 (i) allowable to you as a deduction under Subdivision 250E of the Income Tax Assessment Act 1997; and

 (ii) reasonably attributable to that period.

This is so only if the gain (or gains) referred to in paragraph (a) exceeds the loss (or losses) referred to in paragraph (b).

Effect of Division 230 of the Income Tax Assessment Act 1997 on instalment income

 (2C) Your instalment income for a period also includes the difference between:

 (a) a gain (or gains) you make from a *financial arrangement to the extent to which it is (or they are):

 (i) assessable under Division 230 of the Income Tax Assessment Act 1997; and

 (ii) reasonably attributable to that period; and

 (b) a loss (or losses) you make from a financial arrangement to the extent to which it is (or they are):

 (i) allowable to you as a deduction under Division 230 of the Income Tax Assessment Act 1997; and

 (ii) reasonably attributable to that period.

This is so only if the gain (or gains) referred to in paragraph (a) equals or exceeds the loss (or losses) referred to in paragraph (b).

 (2D) However, your instalment income for a period is worked out disregarding subsection (2C) if any of the following apply:

 (a) you are an individual;

 (b) the only gains and losses that would be taken into account under subsection (2C) for the period are from *financial arrangements that are *qualifying securities.

 (2E) A gain or loss that is taken into account under subsection (2C) in working out an amount (including a nil amount) to be included in your instalment income for a period is not to be, to any extent, taken into account again under another provision of this section in calculating your instalment income for the same or any other period.

Exclusion: amounts in respect of withholding payments

 (3) Your instalment income for a period does not include amounts in respect of:

 (a) *withholding payments (except *nonquotation withholding payments) made to you during that period; and

 (b) amounts included in your assessable income under section 8615 of the Income Tax Assessment Act 1997 for which there are amounts required to be paid under Division 13; and

 (c) which a penalty is applicable under section 12415.

Farm management deposits: effect of making and repayment

 (4) Your instalment income for a period is reduced (but not below nil) by a *farm management deposit made during that period, but only to the extent that, at the end of that period, you can reasonably expect to be able to deduct the deposit under section 3935 of the Income Tax Assessment Act 1997 for the income year that is or includes that period.

 (5) Your instalment income for a period also includes an amount that section 39310 of the Income Tax Assessment Act 1997 includes in your assessable income, for the income year that is or includes that period, because of a repayment during that period of all or some of a *farm management deposit.

Gross proceeds on disposal of registered emissions units included in instalment income

 (5A) Your instalment income for a period also includes an amount that section 42025 of the Income Tax Assessment Act 1997 includes in your assessable income, for the income year that is or includes that period, because you cease to *hold a *registered emissions unit during that period.

Instalment income of entity that is not liable for instalments

 (6) An entity can have *instalment income for a period even if the entity is not liable to pay an instalment for that period.

Note: For example, although a partnership does not pay instalments, it is necessary to work out the partnership’s instalment income in order to work out instalments payable by the partners. See Subdivision 45H.

Subdivision 45DQuarterly payers

Table of sections

45125 Quarterly payer who pays instalments on the basis of instalment income

45130 Quarterly payer who pays on the basis of GDPadjusted notional tax

45132 Quarterly payer who pays 4 instalments annually on the basis of GDPadjusted notional tax

45134 Quarterly payer who pays 2 instalments annually on the basis of GDPadjusted notional tax

45125  Quarterly payer who pays instalments on the basis of instalment income

 (1) You are a quarterly payer who pays on the basis of instalment income if:

 (a) at the end of the *starting instalment quarter in an income year, you are not a *quarterly payer who pays on the basis of GDPadjusted notional tax and you are not a *monthly payer or an *annual payer; or

 (b) but for this section, you would be a quarterly payer who pays on the basis of GDPadjusted notional tax at the end of the starting instalment quarter in an income year but you choose to pay quarterly instalments on the basis of your instalment income.

Note: The entity must make the choice mentioned in paragraph (b) in accordance with subsection (4).

 (2) The starting instalment quarter in an income year (the current year) is:

 (a) if the Commissioner gives you an instalment rate for the first time during an *instalment quarter in the current year—that instalment quarter (even if it is not the first instalment quarter in the current year); or

 (b) if the Commissioner has given you an instalment rate during a previous income year and your instalment rate has not been withdrawn—the first instalment quarter in the current year.

How and when you become such a payer

 (3) You become a *quarterly payer who pays on the basis of instalment income just before the end of the *starting instalment quarter if paragraph (1)(a) or (b) is satisfied.

 (4) You must make the choice mentioned in paragraph (1)(b) by notifying the Commissioner in the *approved form on or before the day on which the instalment for that quarter is due (disregarding subsection 45112(3)).

How and when you stop being such a payer

 (5) If you are a *quarterly payer who pays on the basis of instalment income because of paragraph (1)(a), you stop being such a payer at the start of the first *instalment quarter in the next income year if:

 (a) at the end of that quarter, you become:

 (i) a quarterly payer who pays on the basis of GDPadjusted notional tax; or

 (ii) an *annual payer; or

 (b) at the end of the first *instalment month of that quarter, you become a *monthly payer.

No quarterly payer status in quarter if monthly payer in following month

 (5A) Despite subsections (1) and (3), you cannot be a *quarterly payer who pays on the basis of instalment income at a time in an *instalment quarter if you are a *monthly payer at a time in the first *instalment month that ends after that quarter.

 (6) If you are a *quarterly payer who pays on the basis of instalment income because of paragraph (1)(b), you stop being such a payer at the start of the first *instalment quarter in the next income year if:

 (a) you become an *annual payer at the end of that quarter; or

 (b) both of the following conditions apply:

 (i) you choose not to be a quarterly payer who pays on the basis of instalment income;

 (ii) you become a *quarterly payer who pays on the basis of GDPadjusted notional tax at the end of that quarter.

 (7) You may only make the choice mentioned in paragraph (6)(b) if you would otherwise satisfy paragraph 45130(1)(a), (b), (c) or (d) at the end of that quarter. You must make that choice by notifying the Commissioner in the *approved form on or before the day on which the instalment for that quarter is due (disregarding subsection 45112(3)).

45130  Quarterly payer who pays on the basis of GDPadjusted notional tax

 (1) You are a quarterly payer who pays on the basis of GDPadjusted notional tax if, at the end of the *starting instalment quarter in an income year:

 (a) you are an individual who is not an *annual payer, a *monthly payer or a *quarterly payer who pays on the basis of instalment income; or

 (b) you are a *selfassessment entity:

 (i) that is not an *annual payer or a *quarterly payer who pays on the basis of instalment income; and

 (ii) your base assessment instalment income (within the meaning of section 45320) for the *base year is $2 million or less; or

 (c) you satisfy all of the following conditions:

 (i) you are a selfassessment entity whose base assessment instalment income (within the meaning of section 45320) for the *base year is more than $2 million;

 (ii) you are not an annual payer, but you satisfy the conditions set out in subsection 45140(1) for an annual payer;

 (iia) you are not a *monthly payer;

 (iii) you are not a quarterly payer who pays on the basis of instalment income; or

 (d) for the 200910 income year or a later income year—you are one of the following kinds of entity (an eligible business entity):

 (i) a *small business entity (other than because of subsection 328110(4) of the Income Tax Assessment Act 1997);

 (ii) an entity covered by subsection (1A) of this section.

Note: Paragraph (a) may apply to you if you are a multirate trustee. See section 45468.

 (1A) An entity is covered by this subsection for an income year if:

 (a) the entity is not a *small business entity (other than because of subsection 328110(4) of the Income Tax Assessment Act 1997) for the income year; and

 (b) the entity would be such a small business entity for the income year if:

 (i) each reference in Subdivision 328C (about what is a small business entity) of that Act to $10 million were instead a reference to $50 million; and

 (ii) the reference in paragraph 328110(5)(b) of that Act to a small business entity were instead a reference to an entity covered by this subsection.

How and when you become such a payer

 (2) You become such a payer just before the end of the *starting instalment quarter if paragraph (1)(a), (b), (c) or (d) is satisfied.

 (2A) For the purposes of subsection (2), you satisfy proposed paragraph (1)(d) at the end of the *starting instalment quarter in an income year if you are an eligible business entity for the income year that includes that instalment quarter.

How and when you stop being such a payer

 (3) You stop being a *quarterly payer who pays on the basis of GDPadjusted notional tax at the start of the first *instalment quarter in the next income year if you fail to satisfy paragraph (1)(a), (b), (c) or (d) at the end of that quarter.

 (3A) For the purposes of subsection (3), you fail to satisfy proposed paragraph (1)(d) at the end of the first *instalment quarter in an income year if you are not an eligible business entity for the income year that includes that instalment quarter.

 (4) In addition, you stop being such a payer at the start of the first *instalment quarter in the next income year if:

 (a) at the end of that quarter, you become:

 (i) a *quarterly payer who pays on the basis of instalment income; or

 (ii) an *annual payer; or

 (b) at the end of the first *instalment month of that quarter, you become a *monthly payer.

No quarterly payer status in quarter if monthly payer in following month

 (5) Despite subsections (1) and (2), you cannot be a *quarterly payer who pays on the basis of GDPadjusted notional tax at a time in an *instalment quarter if you are a *monthly payer at a time in the first *instalment month that ends after that quarter.

45132  Quarterly payer who pays 4 instalments annually on the basis of GDPadjusted notional tax

 (1) You are a quarterly payer who pays 4 instalments annually on the basis of GDPadjusted notional tax if, at the end of the *starting instalment quarter in an income year:

 (a) you satisfy the conditions to be a *quarterly payer who pays on the basis of GDPadjusted notional tax under section 45130; and

 (b) you do not satisfy the conditions to be a *quarterly payer who pays 2 instalments annually on the basis of GDPadjusted notional tax under section 45134.

How and when you become such a payer

 (2) You become such a payer just before the end of the *starting instalment quarter if paragraphs (1)(a) and (b) are satisfied.

How and when you stop being such a payer

 (3) You stop being a *quarterly payer who pays 4 instalments annually on the basis of GDPadjusted notional tax at the start of the first *instalment quarter in the next income year if you fail to satisfy paragraphs (1)(a) and (b) at the end of that quarter.

 (4) In addition, you stop being such a payer at the start of the first *instalment quarter in the next income year if:

 (a) at the end of that quarter, you become:

 (i) a *quarterly payer who pays on the basis of instalment income; or

 (ii) an *annual payer; or

 (b) at the end of the first *instalment month of that quarter, you become a *monthly payer.

45134  Quarterly payer who pays 2 instalments annually on the basis of GDPadjusted notional tax

 (1) You are a quarterly payer who pays 2 instalments annually on the basis of GDPadjusted notional tax if, at the end of the *starting instalment quarter in an income year, you are an individual that is a *quarterly payer who pays on the basis of GDPadjusted notional tax and one or more of the following paragraphs apply:

 (a) both of the following conditions are satisfied:

 (i) you are carrying on a *primary production business in the income year;

 (ii) the assessable income that was *derived from, or resulted from, a primary production business that you carried on in the *base year exceeded the amount of so much of your deductions in that year that are reasonably related to that income;

 (b) both of the following conditions are satisfied:

 (i) you are a *special professional in the income year;

 (ii) your *assessable professional income in the base year exceeded the amount of so much of your deductions in that year that are reasonably related to that income.

Note: This section may apply to you if you are a multirate trustee. See section 45468.

How and when you become such a payer

 (2) You become such a payer just before the end of the *starting instalment quarter if subsection (1) is satisfied.

How and when you stop being such a payer

 (3) You stop being a *quarterly payer who pays 2 instalments annually on the basis of GDPadjusted notional tax at the start of the first *instalment quarter in the next income year if you fail to satisfy subsection (1) at the end of that quarter.

 (4) In addition, you stop being such a payer at the start of the first *instalment quarter in the next income year if:

 (a) at the end of that quarter, you become:

 (i) a *quarterly payer who pays on the basis of instalment income; or

 (ii) an *annual payer; or

 (b) at the end of the first *instalment month of that quarter, you become a *monthly payer.

Subdivision 45DAMonthly payers

Table of sections

45136 Monthly payer

45138 Monthly payer requirement

45136  Monthly payer

 (1) You are a monthly payer at a time if:

 (a) you were a monthly payer immediately before that time; or

 (b) if paragraph (a) does not apply—you satisfy the requirement in subsection 45138(1) for the income year in which that time occurs.

Note: If paragraph (b) applies, see subsection (3) for the time at which you become a monthly payer.

 (2) The starting instalment month in an income year (the current year) is:

 (a) if the Commissioner gives you an instalment rate for the first time during an *instalment month in the current year—the next instalment month in the current year; or

 (b) if the Commissioner has given you an instalment rate during a previous income year and your instalment rate has not been withdrawn—the first instalment month in the current year.

How and when you become such a payer

 (3) Despite subsection (1), if paragraph (1)(b) applies, you become a *monthly payer just before the end of the *starting instalment month in the income year.

How and when you stop being such a payer

 (4) Despite subsection (1), you stop being a *monthly payer at the start of the first *instalment month in a later income year if:

 (a) you do not satisfy the requirement in subsection 45138(1) for that later income year; and

 (b) you give the Commissioner a notice (the MP stop notice) in the *approved form for that later income year before the start of that later income year.

45138  Monthly payer requirement

 (1) You satisfy the requirement in this subsection for an income year if at the start of your *MPR test day for that income year, your base assessment instalment income (within the meaning of section 45320) for the *base year equals or exceeds:

 (a) $20 million; or

 (b) if regulations made for the purposes of this paragraph specify a different amount—that amount.

 (2) However, you do not satisfy the requirement in subsection (1) for an income year if, at the start of your *MPR test day for that income year:

 (a) you have (or, if you are a *member of a *GST group, the *representative member of the GST group has) an obligation to give the Commissioner a *GST return for a quarterly *tax period; and

 (b) you are not the *head company of a *consolidated group nor the *provisional head company of a *MEC group; and

 (c) your base assessment instalment income (within the meaning of section 45320) for the *base year is less than $100 million.

 (3) For the purposes of subsections (1) and (2), at the start of an entity’s *MPR test day:

 (a) determine the amount of the entity’s base assessment instalment income (within the meaning of section 45320) for the *base year only on the basis of the information provided by the Commissioner to the entity before that start of that day; and

 (b) in determining on that day whether an entity has an obligation mentioned in paragraph (2)(a), disregard any creation or removal of such an obligation after that day (even if that change is made retrospective to that day).

 (4) An entity’s MPR test day for an income year is:

 (a) if the Commissioner gives the entity an instalment rate for the first time during an *instalment month in the income year—the last day of that month; or

 (b) otherwise—the first day of the third last month of the previous income year.

 (5) Subsection (6) applies if, disregarding that subsection, an entity does not satisfy the requirement in subsection (1) for an income year.

 (6) For the purposes of this section, in determining the entity’s base assessment instalment income (within the meaning of section 45320) for the *base year:

 (a) disregard subsection 45120(2C); and

 (b) disregard paragraph (3)(a) of this section, to the extent that that paragraph relates to the operation of subsection 45120(2C).

 (7) If, because of subsection (6), the entity satisfies the requirement in subsection (1) for an income year, the entity must give the Commissioner a notice in the *approved form in respect of that income year before:

 (a) if the *starting instalment month in the income year is determined under paragraph 45136(2)(a)—the end of that starting instalment month; or

 (b) if the starting instalment month in the income year is determined under paragraph 45136(2)(b)—the start of that starting instalment month.

Subdivision 45EAnnual payers

Table of sections

When you start and stop being an annual payer

45140 Choosing to pay annual instalments

45145 Meaning of instalment group

45150 Entity stops being annual payer if involved with GST registration or instalment group

45155 Entity stops being annual payer if notional tax is $8,000 or more, or entity chooses to pay quarterly

45160 Head company of a consolidated group stops being annual payer

When you start and stop being an annual payer

45140  Choosing to pay annual instalments

 (1) You may choose to pay instalments annually instead of quarterly if, at the end of the *starting instalment quarter, you satisfy the following conditions:

 (a) you are neither registered, nor *required to be registered, under Part 25 of the *GST Act; and

 (b) you are not a partner in a partnership that is registered, or required to be registered, under that Part; and

 (c) your most recent *notional tax notified by the Commissioner is less than $8,000; and

 (d) in the case of a company—the company is not a *participant in a *GST joint venture under Division 51 of that Act; and

 (e) in the case of a company—the company is not part of an *instalment group.

Note: You cannot choose to be an annual payer while you are the head company of a consolidated group to which Subdivision 45Q applies: see section 45720.

 (1A) You may also choose at a time (subject to subsection (2)) to pay instalments annually instead of quarterly if at that time either:

 (a) an *annual tax period election of yours has effect and, if you are a partner in one or more partnerships that are registered under Part 25 of the *GST Act, an annual tax period election of each of those partnerships has effect; or

 (b) all of the following subparagraphs apply:

 (i) you are neither registered, nor *required to be registered, under Part 25 of the GST Act;

 (ii) you are a partner in one or more partnerships that are registered under that Part;

 (iii) an annual tax period election of each of those partnerships has effect;

and at the end of the *starting instalment quarter, you satisfy the following conditions:

 (c) you are not a partner in a partnership that is required to be registered under Part 25 of the GST Act;

 (d) your most recent *notional tax notified by the Commissioner is less than $8,000;

 (e) in the case of a company—the company is not a *participant in a *GST joint venture under Division 51 of that Act;

 (f) in the case of a company—the company is not part of an *instalment group.

Note: You cannot choose to be an annual payer while you are the head company of a consolidated group to which Subdivision 45Q applies: see section 45720.

 (2) You must make the choice under subsection (1) or (1A) by notifying the Commissioner, in the *approved form, on or before the day on which that instalment would otherwise be due.

 (3) You become an annual payer just before the end of the *starting instalment quarter if:

 (a) you satisfy the conditions in subsection (1) or (1A); and

 (b) you choose to pay instalment annually.

45145  Meaning of instalment group

 (1) An instalment group consists of:

 (a) a company:

 (i) that has *majority control of at least one other company; but

 (ii) of which no other company has *majority control; and

 (b) any other company of which the firstmentioned company has *majority control.

 (2) A company has majority control of another company if, and only if:

 (a) the first company is in a position to cast, or control the casting of, more than 50% of the maximum number of votes that might be cast at a general meeting of the other company; or

 (b) the first company has the power to appoint or remove the majority of the directors of the other company; or

 (c) the other company is, or a majority of its directors are, accustomed or under an obligation, whether formal or informal, to act according to the directions, instructions or wishes of the first company.

45150  Entity stops being annual payer if involved with GST registration or instalment group

 (1) You stop being an *annual payer if, during an *instalment quarter that is in an income year that starts after the commencement of this section:

 (a) you become *required to be registered under Part 25 of the *GST Act; or

 (b) you become a partner in a partnership that is required to be registered under that Part; or

 (c) a partnership in which you are a partner becomes required to be registered under that Part; or

 (d) in the case of a company—the company becomes a *participant in a *GST joint venture under Division 51 of that Act; or

 (e) in the case of a company—the company becomes part of an *instalment group; or

 (f) an *annual tax period election of yours, or of a partnership in which you are a partner, ceases to have effect.

 (2) If you stop being an *annual payer under subsection (1):

 (a) you must still pay an annual instalment for the income year mentioned in that subsection; and

 (b) you must pay an instalment for each instalment quarter in the next income year for which subsection 4550(1) or (2) requires you to do so.

 (3) You may again become an *annual payer if:

 (a) after you stop being an *annual payer under subsection (1), you satisfy the conditions in subsection 45140(1) or (1A); and

 (b) you again choose under section 45140 to pay instalments annually.

45155  Entity stops being annual payer if notional tax is $8,000 or more, or entity chooses to pay quarterly

 (1) You stop being an *annual payer at the start of the first *instalment quarter in an income year (the current year) if:

 (a) after the end of the first instalment quarter in the previous income year and before the end of the first instalment quarter in the current year, the Commissioner notifies you of your *notional tax, and it is $8,000 or more; or

 (b) you choose to pay instalments quarterly instead of annually.

 (1A) You must make the choice by notifying the Commissioner, in the *approved form, on or before the day on which the instalment for the first *instalment quarter for the current year would otherwise be due (disregarding subsection 45112(3)).

 (2) You must pay an instalment for the first *instalment quarter of the next income year, and later instalment quarters, in accordance with Subdivision 45B.

 (3) You must still pay an annual instalment for the previous income year referred to in subsection (1).

 (4) You may again become an *annual payer at the end of the first *instalment quarter in a later income year if:

 (a) at that time, you satisfy the conditions in subsection 45140(1) or in paragraphs 45140(1A)(c), (d), (e) and (f); and

 (b) you again choose under section 45140 to pay annually.

45160  Head company of a consolidated group stops being annual payer

 (1) You stop being an *annual payer at the start of an *instalment quarter if Subdivision 45Q starts applying to you as the *head company of a *consolidated group during that quarter.

 (2) You must pay an instalment for that *instalment quarter and later instalment quarters in accordance with Subdivision 45B.

 (3) You may again become an *annual payer if:

 (a) after you stop being an *annual payer under subsection (1), you satisfy the conditions in subsection 45140(1) or (1A); and

 (b) you again choose under section 45140 to pay instalments annually.

Note: You cannot choose to be an annual payer while you are the head company of a consolidated group to which Subdivision 45Q applies: see section 45720.

Subdivision 45FVarying the instalment rate for quarterly or monthly payers who pay on the basis of instalment income

Table of sections

45200 Application

45205 Choosing a varied instalment rate

45210 Notifying Commissioner of varied instalment rate

45215 Credit on using varied rate in certain cases

45200  Application

 (1) This Subdivision applies if you are a *quarterly payer who pays on the basis of instalment income at the end of an *instalment quarter.

 (2) If you are a *monthly payer, this Subdivision has effect in relation to you in respect of an *instalment month in the same way in which it has effect in relation to a *quarterly payer in respect of an *instalment quarter.

45205  Choosing a varied instalment rate

 (1) You may choose an instalment rate for working out under section 45110 the amount of your instalment for an *instalment quarter in an income year.

 (2) If you do so, you must use that instalment rate to work out the amount of that instalment. (You cannot later choose another instalment rate for working out that amount.)

Note 1: If choosing a rate leads you to pay an instalment that is too low, you may be liable to general interest charge under section 45230.

Note 2: If you choose a rate under this section, you must use it even if the Commissioner later gives you a new instalment rate.

 (3) You must also use that instalment rate to work out the amount of the instalment that you are liable to pay for each later *instalment quarter in that income year, unless you choose another instalment rate under subsection (1) for working out that amount.

Note 1: If you choose a rate under this section, you must use it even if the Commissioner later gives you a new instalment rate.

Note 2: If a rate you have chosen for an instalment quarter is not appropriate for a later instalment quarter in the same income year, you should choose another rate under subsection (1) for the later quarter. If the earlier rate is too low, you may be liable to general interest charge under section 45230.

 (4) However, for working out under section 45110 the amount of your instalment for an *instalment quarter in a later income year, you must use the most recent instalment rate given to you by the Commissioner before the end of that quarter, unless you again choose another instalment rate under subsection (1).

 (5) Subsection (6) applies if you are a monthly payer.

 (6) Treat the references in subsections (1) and (4) to section 45110 as instead being references to section 45114.

45210  Notifying Commissioner of varied instalment rate

  If you work out the amount of an instalment using an instalment rate you have chosen under section 45205, you must specify that rate in the notice about your instalment income that you must give the Commissioner under section 4520.

45215  Credit on using varied rate in certain cases

 (1) You are entitled to claim a credit if:

 (a) the amount of your instalment for an *instalment quarter (the current quarter) in an income year is to be worked out using an instalment rate you chose under section 45205; and

 (b) that rate is lower than the instalment rate you used to work out the amount of your instalment for the previous instalment quarter (if any) in the same income year; and

 (c) the amount worked out using the method statement is greater than nil.

Method statement

Step 1. Add up the instalments you are liable to pay for the earlier *instalment quarters in the income year (even if you have not yet paid all of them).

Step 2. Subtract from the step 1 amount each earlier credit that you have claimed under this section or section 45420 in respect of the income year.

Step 3. Multiply the total of your *instalment income for those earlier *instalment quarters by the instalment rate to be used for the current quarter.

Step 4. Subtract the step 3 amount from the step 2 amount.

Step 5. If the result is a positive amount, it is the amount of the credit you can claim.

 (2) A claim for a credit must be made in the *approved form on or before the day on which the instalment for the current quarter is due.

Note: How the credit is applied is set out in Division 3 of Part IIB.

 (3) The credit entitlement does not affect your liability to pay an instalment.

Subdivision 45GGeneral interest charge payable in certain cases if instalments are too low

Table of sections

45225 Effect of Subdivision in relation to monthly payers

45230 Liability to GIC on shortfall in quarterly instalment worked out on the basis of varied rate

45232 Liability to GIC on shortfall in quarterly instalment worked out on the basis of estimated benchmark tax

45233 Reduction in GIC liability under section 45232 if shortfall is made up in later instalment

45235 Liability to GIC on shortfall in annual instalment

45240 Commissioner may remit general interest charge

45225  Effect of Subdivision in relation to monthly payers

  If you are a *monthly payer, this Subdivision has effect in relation to you in respect of an *instalment month in the same way in which it has effect in relation to a *quarterly payer in respect of an *instalment quarter.

45230  Liability to GIC on shortfall in quarterly instalment worked out on the basis of varied rate

 (1) You are liable to pay the *general interest charge under this section if:

 (a) you use an instalment rate (the varied rate) under section 45205 to work out the amount of your instalment for an *instalment quarter (the variation quarter) in an income year; and

 (b) the varied rate is less than 85% of your *benchmark instalment rate for that income year that the Commissioner works out under Subdivision 45K.

 (2) You are liable to pay the *general interest charge on the amount worked out as follows:

Start formula open bracket Rate discrepancy times Your *instalment income for the variation quarter close bracket plus Credit Adjustment end formula

where:

rate discrepancy means the difference between the varied rate and the lesser of:

 (a) the most recent instalment rate given to you by the Commissioner before the end of the variation quarter; and

 (b) your *benchmark instalment rate for that income year.

credit adjustment means:

 (a) if, as a result of using the varied rate for the variation quarter, you claimed a credit under section 45215—the amount worked out as follows:

Start formula Rate discrepancy times Your *instalment income for the earlier instalment quarters in that income year end formula

  or the amount of the credit, whichever is less; and

 (b) otherwise—nil.

 (2A) If the variation quarter is in a *consolidation transitional year for you as a *subsidiary member of a *consolidated group, a reference in subsection (2) to:

 (a) your *instalment income for the variation quarter; or

 (b) your instalment income for the earlier instalment quarters in the income year;

is taken to be a reference to so much of that income as is reasonably attributable to the period in that quarter or those quarters (as appropriate) during which you are not a subsidiary member of the group.

 (3) You are liable to pay the charge for each day in the period that:

 (a) started at the beginning of the day by which the instalment for the variation quarter was due to be paid; and

 (b) finishes at the end of the day on which your assessed tax for the income year is due to be paid.

 (4) The Commissioner must give you written notice of the *general interest charge to which you are liable under subsection (2). You must pay the charge within 14 days after the notice is given to you.

 (5) If any of the *general interest charge to which you are liable under subsection (2) remains unpaid at the end of the 14 days referred to in subsection (4), you are also liable to pay the *general interest charge on the unpaid amount for each day in the period that:

 (a) starts at the end of those 14 days; and

 (b) finishes at the end of the last day on which, at the end of the day, any of the following remains unpaid:

 (i) the unpaid amount;

 (ii) general interest charge on the unpaid amount.

45232  Liability to GIC on shortfall in quarterly instalment worked out on the basis of estimated benchmark tax

 (1) You are liable to pay the *general interest charge under this section if:

 (a) the amount of your instalment for an *instalment quarter (the variation quarter) in an income year is worked out under paragraph 45112(1)(b) or (c) on the basis of your estimate of your *benchmark tax for that income year; and

 (b) the estimate used is less than 85% of your *benchmark tax for the income year (which the Commissioner works out under section 45365).

Amount on which the charge is payable

 (2) You are liable to pay the *general interest charge on the amount worked out as follows (if it is a positive amount):

Start formula *Acceptable amount of the instalment minus Actual amount end formula

where:

acceptable amount, of your instalment for an *instalment quarter in an income year, has the meaning given by subsections (3), (3A), (3B), (3C) and (3D).

actual amount means:

 (a) the amount of your instalment, as worked out on the basis of the estimate; or

 (b) if, as a result of using the estimate, you claimed a credit under section 45420 for the variation quarter—the amount of the credit, expressed as a negative amount.

 (3) If you are a *quarterly payer who pays 4 instalments annually on the basis of GDPadjusted notional tax, the acceptable amount of your instalment for that instalment quarter is:

 (a) if the amount of the instalment is worked out under paragraph 45112(1)(b) or (c)—the amount worked out using the table in this subsection (which can be a negative amount); or

 (b) otherwise—the amount notified to you by the Commissioner under paragraph 45112(1)(a) as the amount of your instalment for that *instalment quarter.

 

Acceptable amount of an instalment

Item

If the *instalment quarter is:

The acceptable amount of your instalment for that instalment quarter is:

1

the first in that income year for which you are liable to pay an instalment

the lower of:

(a) the amount that the Commissioner notified to you under paragraph 45112(1)(a) as the amount of your instalment for that *instalment quarter; and

(b) 25% of your *benchmark tax for the income year (which the Commissioner works out under section 45365).

2

the second in that income year for which you are liable to pay an instalment

the lower of:

(a) the amount that the Commissioner would have notified to you under paragraph 45112(1)(a) as the amount of your instalment for that *instalment quarter if the amounts of all your instalments for that income year had been required to be worked out under Subdivision 45L; and

(b) the amount worked out by subtracting:

 the *acceptable amount of your instalment for the earlier instalment quarter in that income year;

 from:

 50% of your *benchmark tax for the income year (which the Commissioner works out under section 45365).

3

the third in that income year for which you are liable to pay an instalment

the lower of:

(a) the amount that the Commissioner would have notified to you under paragraph 45112(1)(a) as the amount of your instalment for that *instalment quarter if the amounts of all your instalments for that income year had been required to be worked out under Subdivision 45L; and

(b) the amount worked out by subtracting:

 the total of the *acceptable amounts of your instalments for the earlier instalment quarters in that income year;

 from:

 75% of your *benchmark tax for the income year (which the Commissioner works out under section 45365).

4

the fourth in that income year for which you are liable to pay an instalment

the lower of:

(a) the amount that the Commissioner would have notified to you under paragraph 45112(1)(a) as the amount of your instalment for that *instalment quarter if the amounts of all your instalments for that income year had been required to be worked out under Subdivision 45L; and

(b) the amount worked out by subtracting:

 the total of the *acceptable amounts of your instalments for the earlier instalment quarters in that income year;

 from:

 100% of your *benchmark tax for the income year (which the Commissioner works out under section 45365).

 (3A) Subject to subsections (3B), (3C) and (3D), if you are a *quarterly payer who pays 2 instalments annually on the basis of GDPadjusted notional tax, the acceptable amount of your instalment for an *instalment quarter in an income year is:

 (a) if the amount of the instalment is worked out under paragraph 45112(1)(b) or (c)—the amount worked out using the table in this subsection (which can be a negative amount); or

 (b) otherwise—the amount notified to you by the Commissioner under paragraph 45112(1)(a) as the amount of your instalment for that instalment quarter.

 

Acceptable amount of an instalment

Item

If the *instalment quarter is:

The acceptable amount of your instalment for that instalment quarter is:

1

the third *instalment quarter in that income year

the lower of:

(a) the amount that the Commissioner notified to you under paragraph 45112(1)(a) as the amount of your instalment for that *instalment quarter; and

(b) 75% of your *benchmark tax for the income year (which the Commissioner works out under section 45365).

2

the fourth *instalment quarter in that income year

the lower of:

(a) the amount that the Commissioner would have notified to you under paragraph 45112(1)(a) as the amount of your instalment for that *instalment quarter if the amounts of all your instalments for that income year had been required to be worked out under Subdivision 45L; and

(b) the amount worked out by subtracting:

 the *acceptable amount of your instalment for the earlier instalment quarter in that income year;

 from:

 100% of your *benchmark tax for the income year (which the Commissioner works out under section 45365).

 (3B) If:

 (a) you are a *quarterly payer who pays 2 instalments annually on the basis of GDPadjusted notional tax; and

 (b) the Commissioner first gives you an instalment rate during the second *instalment quarter in an income year;

the acceptable amount of your instalment for an instalment quarter in that income year is:

 (c) if the amount of the instalment is worked out under paragraph 45112(1)(b) or (c)—the amount worked out using the table in this subsection (which can be a negative amount); or

 (d) otherwise—the amount notified to you by the Commissioner under paragraph 45112(1)(a) as the amount of your instalment for that instalment quarter.

 

Acceptable amount of an instalment

Item

If the *instalment quarter is:

The acceptable amount of your instalment for that instalment quarter is:

1

the third *instalment quarter in that income year

the lower of:

(a) the amount that the Commissioner notified to you under paragraph 45112(1)(a) as the amount of your instalment for that *instalment quarter; and

(b) 50% of your *benchmark tax for the income year (which the Commissioner works out under section 45365).

2

the fourth *instalment quarter in that income year

the lower of:

(a) the amount that the Commissioner would have notified to you under paragraph 45112(1)(a) as the amount of your instalment for that *instalment quarter if the amounts of all your instalments for that income year had been required to be worked out under Subdivision 45L; and

(b) the amount worked out by subtracting:

 the *acceptable amount of your instalment for the earlier instalment quarter in that income year;

 from:

 75% of your *benchmark tax for the income year (which the Commissioner works out under section 45365).

 (3C) If:

 (a) you are a *quarterly payer who pays 2 instalments annually on the basis of GDPadjusted notional tax; and

 (b) the Commissioner first gives you an instalment rate during the third *instalment quarter in an income year;

the acceptable amount of your instalment for an instalment quarter in that income year is:

 (c) if the amount of the instalment is worked out under paragraph 45112(1)(b) or (c)—the amount worked out using the table in this subsection (which can be a negative amount); or

 (d) otherwise—the amount notified to you by the Commissioner under paragraph 45112(1)(a) as the amount of your instalment for that instalment quarter.

 

Acceptable amount of an instalment

Item

If the *instalment quarter is:

The acceptable amount of your instalment for that instalment quarter is:

1

the third *instalment quarter in that income year

the lower of:

(a) the amount that the Commissioner notified to you under paragraph 45112(1)(a) as the amount of your instalment for that *instalment quarter; and

(b) 25% of your *benchmark tax for the income year (which the Commissioner works out under section 45365).

2

the fourth *instalment quarter in that income year

the lower of:

(a) the amount that the Commissioner would have notified to you under paragraph 45112(1)(a) as the amount of your instalment for that *instalment quarter if the amounts of all your instalments for that income year had been required to be worked out under Subdivision 45L; and

(b) the amount worked out by subtracting:

 the *acceptable amount of your instalment for the earlier instalment quarter in that income year;

 from:

 50% of your *benchmark tax for the income year (which the Commissioner works out under section 45365).

 (3D) If:

 (a) you are a *quarterly payer who pays 2 instalments annually on the basis of GDPadjusted notional tax; and

 (b) the Commissioner first gives you an instalment rate during the fourth *instalment quarter in an income year;

the acceptable amount of your instalment for an instalment quarter in that income year is the lower of the following amounts:

 (c) the amount that the Commissioner notified to you under paragraph 45112(1)(a) as the amount of your instalment for that instalment quarter;

 (d) 25% of your *benchmark tax for the income year (which the Commissioner works out under section 45365).

Period for which the charge is payable

 (4) You are liable to pay the charge for each day in the period that:

 (a) started at the beginning of the day by which the instalment for the variation quarter was due to be paid; and

 (b) finishes at the end of the day on which your assessed tax for the income year is due to be paid.

Commissioner to notify you

 (5) The Commissioner must give you written notice of the *general interest charge to which you are liable under subsection (2). You must pay the charge within 14 days after the notice is given to you.

Further charge if charge under subsection (2) remains unpaid

 (6) If any of the *general interest charge to which you are liable under subsection (2) remains unpaid at the end of the 14 days referred to in subsection (5), you are also liable to pay the *general interest charge on the unpaid amount for each day in the period that:

 (a) starts at the end of those 14 days; and

 (b) finishes at the end of the last day on which, at the end of the day, any of the following remains unpaid:

 (i) the unpaid amount;

 (ii) general interest charge on the unpaid amount.

Modifications for subsidiary member of consolidated group

 (7) Subsections (1) to (6) apply to you with the modifications set out in subsections (8) to (10) if the variation quarter is in a *consolidation transitional year for you as a *subsidiary member of a *consolidated group.

 (8) For the purposes of subsection (7), a reference in subsection (1), (3), (3A), (3B), (3C) and (3D) to your *benchmark tax for that year is taken to be a reference to the amount worked out as follows:

Start formula start fraction Your *benchmark tax for that year over Number of days in that year when you are not a *subsidiary member of the group end fraction times 365 end formula

 (9) For the purposes of subsection (7), a reference in this section to:

 (a) the acceptable amount of your instalment for an *instalment quarter in an income year; or

 (b) the acceptable amount of your instalment for the earlier instalment quarter in an income year; or

 (c) the acceptable amounts of your instalments for the earlier instalment quarters in an income year;

is taken to be a reference to so much of the acceptable amount of instalment or acceptable amounts of instalments, worked out under subsection (3), (3A), (3B), (3C) or (3D) for that quarter or those quarters (as appropriate), as is reasonably attributable to the period in that quarter or those quarters (as appropriate) during which you are not a *subsidiary member of the group.

 (10) For the purposes of subsection (7), a reference to the actual amount in subsection (2) is taken to be a reference to so much of the actual amount worked out under that subsection as is reasonably attributable to the period in the variation quarter during which you are not a *subsidiary member of the group.

45233  Reduction in GIC liability under section 45232 if shortfall is made up in later instalment

 (1) This section reduces the amount (the shortfall) on which you are liable to pay the *general interest charge under subsection 45232(2) if, for a later *instalment quarter (the later quarter) that is in the same income year as the variation quarter, the amount worked out as follows is a negative amount:

Start formula *Acceptable amount of your instalment for the later quarter minus Actual amount of your instalment for the later quarter end formula

That amount (expressed as a positive number) is called the top up.

 (2) For the purposes of the formula in subsection (1):

actual amount of your instalment for the later quarter means:

 (a) the amount of your instalment for the later quarter, as worked out under section 45112; or

 (b) if you claimed a credit under section 45420 for the later quarter—the amount of the credit, expressed as a negative amount.

Amount of the reduction

 (3) The shortfall is reduced by applying so much of the top up as does not exceed the shortfall.

 (4) However, if some of the top up has already been applied (under any other application or applications of this section) to reduce the amount on which you are liable to pay the *general interest charge under subsection 45232(2) as it applies to a different *instalment quarter, the shortfall is reduced by applying so much of the top up as has not already been applied, and does not exceed the shortfall.

Period for which reduction has effect

 (5) The reduction has effect for each day in the period that:

 (a) started at the beginning of the day by which the instalment for the later quarter was due to be paid; and

 (b) finishes at the end of the day on which your assessed tax for the income year is due to be paid.

45235  Liability to GIC on shortfall in annual instalment

 (1) You are liable to pay the *general interest charge under this section if:

 (a) you choose to estimate the amount of your instalment (the estimated instalment amount) for an income year under paragraph 45115(1)(c) or former paragraph 45175(1)(b); and

 (b) that amount is less than 85% of your *benchmark tax for the income year (which the Commissioner works out under section 45365).

 (2) If you estimated the amount of the instalment under former paragraph 45175(1)(b), you are liable to pay the *general interest charge on the difference between the estimated instalment amount and the lower of the following amounts:

 (a) your most recent *notional tax notified by the Commissioner at least 30 days before the day on which the instalment was due;

 (b) your *benchmark tax for the income year.

 (3) If you estimated the amount of the instalment under paragraph 45115(1)(c), you are liable to pay the *general interest charge on the difference between the estimated instalment amount and the lowest of the following amounts:

 (a) the amount of your instalment worked out using the most recent instalment rate given to you by the Commissioner before the end of the income year;

 (b) your most recent *notional tax notified by the Commissioner before the end of the income year under subsection 45320(5);

 (c) your *benchmark tax for the income year.

 (4) You are liable to pay the charge for each day in the period that:

 (a) started at the beginning of the day by which the instalment for the income year was due to be paid; and

 (b) finishes at the end of the day on which your assessed tax for the income year is due to be paid.

 (5) The Commissioner must give you written notice of the *general interest charge to which you are liable under subsection (2) or (3). You must pay the charge within 14 days after the notice is given to you.

 (6) If any of the *general interest charge to which you are liable under subsection (2) or (3) remains unpaid at the end of the 14 days referred to in subsection (5), you are also liable to pay the *general interest charge on the unpaid amount for each day in the period that:

 (a) starts at the end of those 14 days; and

 (b) finishes at the end of the last day on which, at the end of the day, any of the following remains unpaid:

 (i) the unpaid amount;

 (ii) general interest charge on the unpaid amount.

45240  Commissioner may remit general interest charge

  The Commissioner may, if he or she is satisfied that because special circumstances exist it would be fair and reasonable to do so, remit the whole or any part of any *general interest charge payable under subsection 45230(2) or 45232(2) or subsection 45235(2) or (3).

Subdivision 45HPartnership income

45260  Instalment income for a period in which you are in a partnership

 (1) Your instalment income for a period (the current period) includes an amount for each partnership in which you are a partner at any time during the current period. The amount is worked out using the formula:

Start formula start fraction Your assessable income from the partnership for the last income year over Partnership's *instalment income for that income year end fraction times Partnership's *instalment income for the current period end formula

 (2) For the purposes of the formula in subsection (1):

your assessable income from the partnership for the last income year means so much of your individual interest in the partnership’s net income for an income year as was included by section 92 of the Income Tax Assessment Act 1936 in your assessable income for the most recent income year:

 (a) that ended before the start of the current period; and

 (b) for which you have an assessment, or for which the Commissioner has notified you that you do not have a taxable income.

 (3) However, if for any reason the component defined in subsection (2) does not exist or is a nil amount, or the partnership had no *instalment income for that income year, your instalment income for the current period includes, for that partnership, an amount that is fair and reasonable having regard to:

 (a) the extent of your interest in the partnership during the current period; and

 (b) the partnership’s *instalment income for the current period; and

 (c) any other relevant circumstances.

Exception for corporate limited partnerships

 (4) Your instalment income for the current period does not include an amount for a partnership that is a *corporate limited partnership for the income year that is or includes that period.

Note: Your instalment income will still include a distribution by the partnership that is ordinary income. See section 45120.

Subdivision 45ITrust income included in instalment income of beneficiary

Table of sections

45280 Instalment income for a period in which you are a beneficiary of a trust

45285 Instalment income includes distributions by certain resident unit trusts

45286 Instalment income includes distributions by certain managed investment trusts

45287 When trusts are disqualified due to concentrated ownership

45288 Resident investment trusts for beneficiaries who are absolutely entitled

45290 Exceptions to exclusion of trust capital gains from beneficiary’s instalment income

45280  Instalment income for a period in which you are a beneficiary of a trust

 (1) Your instalment income for a period (the current period) includes an amount for each trust of which you are a beneficiary at any time during the current period. The amount is worked out using the formula:

Start formula start fraction Your assessable income from the trust for the last income year over Trust's *instalment income for that income year end fraction times Trust's *instalment income for the current period end formula

 (2) For the purposes of the formula in subsection (1):

your assessable income from the trust for the last income year means so much of a share of the trust’s net income for an income year as:

 (a) Division 6 of Part III of the Income Tax Assessment Act 1936 included in your assessable income for the most recent income year:

 (i) that ended before the start of the current period; and

 (ii) for which you have an assessment, or for which the Commissioner has notified you that you do not have a taxable income; and

 (b) is not attributable to a *capital gain made by the trust.

Note: For exceptions to paragraph (b), see section 45290.

 (3) However, if for any reason the component defined in subsection (2) does not exist or is a nil amount, or the trust had no *instalment income for that income year, your instalment income for the current period includes, for that trust, an amount that is fair and reasonable having regard to:

 (a) the extent of your interest in the trust, and your interest in the income of the trust, during the current period; and

 (b) the trust’s *instalment income for the current period; and

 (c) any other relevant circumstances.

Exception for corporate unit trusts and public trading trusts

 (4) Your instalment income for the current period does not include an amount for a trust if the trustee is liable to be assessed, and to pay tax, under section 102S of the Income Tax Assessment Act 1936 for the income year that is or includes that period.

Note: Your instalment income will still include a distribution by the trust that is ordinary income. See section 45120.

Exception for certain resident unit trusts

 (5) Your instalment income for the current period does not include an amount for a trust under subsection (1) if the conditions in either subsection 45285(1) or (2) are satisfied for you for that trust for that period.

Note: Your instalment income will instead include a distribution by the trust: see section 45285.

Exception for trusts whose beneficiary is absolutely entitled

 (6) Your instalment income for the current period does not include an amount for a trust under subsection (1) if, throughout the current period:

 (a) the trustee of the trust did not have any active duties to perform in the management of the trust (other than the duty to deal with the trust income and capital in accordance with any requests made or directions given by the beneficiary or beneficiaries); and

 (b) if there was only one beneficiary, the beneficiary:

 (i) was absolutely entitled to the trust assets; and

 (ii) had a vested and indefeasible interest in any trust income arising from time to time; and

 (c) if there was more than one beneficiary, each beneficiary:

 (i) was absolutely entitled to that beneficiary’s interest in the trust assets; and

 (ii) had a vested and indefeasible interest in a proportion of any trust income arising from time to time, being a proportion that corresponded to the beneficiary’s proportional interest in the trust capital.

Instead, your instalment income for the current period includes the following amount:

Start formula Your proportion of the vested and indefeasible interests in the trust income arising from time to time times Trust's *instalment income for the current period end formula

45285  Instalment income includes distributions by certain resident unit trusts

 (1) Your instalment income for a period includes trust income or trust capital that a unit trust distributes to you, or applies for your benefit, during that period if:

 (a) the unit trust is a resident unit trust (within the meaning of section 102Q of the Income Tax Assessment Act 1936) for the income year of the trust that is or includes that period; and

 (b) throughout that period:

 (i) any of the units in the trust were listed for quotation in the official list of a stock exchange in Australia or elsewhere; or

 (ii) any of the units in the trust were offered to the public; or

 (iii) the units in the trust were held by at least 50 persons; and

 (c) section 45287 in this Schedule did not apply to the trust at any time during that period; and

 (d) throughout that period, the trust’s activities consisted only of activities listed in the definition of eligible investment business in section 102M of the Income Tax Assessment Act 1936.

(It does not matter whether the trust income or trust capital is included in your assessable income for the income year that is or includes that period.)

 (2) Your instalment income for a period also includes trust income or trust capital that a unit trust distributes to you, or applies for your benefit, during that period if:

 (a) the income or capital is not included in your instalment income under subsection (1); and

 (b) the unit trust is a resident unit trust (within the meaning of section 102Q of the Income Tax Assessment Act 1936) for the income year of the trust that is or includes that period; and

 (c) throughout that period, the trust’s activities consisted only of activities listed in the definition of eligible investment business in section 102M of the Income Tax Assessment Act 1936; and

 (d) throughout that period, either:

 (i) you are yourself the trustee of a unit trust that satisfies each of paragraphs (1)(a) to (d) of this section; or

 (ii) you are yourself the trustee of one or more trusts covered by section 45288; or

 (iii) you are exempt from tax; or

 (iv) you are a *complying superannuation entity or a statutory fund of a *life insurance company.

(It does not matter whether the trust income or trust capital is included in your assessable income for the income year that is or includes that period.)

Extension—nominee and bare trust situations

 (3) In determining, for the purposes of subparagraph (1)(b)(iii), how many persons hold units in a unit trust, if:

 (a) another trust (the holding trust) is a unit holder in the unit trust; and

 (b) the holding trust is a trust of the kind covered by subsection 45280(6); and

 (c) the beneficiary’s or beneficiaries’ absolute entitlement exists at all times while the holding trust is in existence;

the beneficiary or beneficiaries count as persons who hold units in the unit trust, and the trustee of the holding trust does not.

45286  Instalment income includes distributions by certain managed investment trusts

  Your instalment income for a period includes trust income or trust capital that a trust distributes to you, or applies for your benefit, during that period if:

 (a) the income or capital is not included in your instalment income under section 45280 or 45285; and

 (b) the trust satisfies the condition in paragraph 27510(3)(a) of the Income Tax Assessment Act 1997 in relation to the income year that is or includes that period; and

 (c) the trust is a *managed investment trust for that income year; and

 (d) the trust meets the requirement in section 275110 of that Act throughout the income year.

(It does not matter whether the trust income or trust capital is included in your assessable income for the income year that is or includes that period.)

45287  When trusts are disqualified due to concentrated ownership

Concentrated ownership

 (1) This section applies to a trust if an individual holds, or up to 20 individuals hold between them directly or indirectly and for their own benefit, interests in the trust:

 (a) carrying *fixed entitlements to:

 (i) at least 75% of the trust’s income; or

 (ii) at least 75% of the trust’s capital; or

 (b) if beneficiaries of the trust have a right to vote in respect of activities of the trust—carrying at least 75% of those voting rights.

Single individual

 (2) Subsection (1) operates as if all of these were a single individual:

 (a) an individual, whether or not the individual holds interests in the trust; and

 (b) the individual’s *associates; and

 (c) for any interests in respect of which other individuals are nominees of the individual or of the individual’s associates—those other individuals.

Concentrated ownership—potential due to possible variation of rights etc.

 (3) This section also applies to a trust if, because of:

 (a) any provision in the trust’s constituent document, or in any contract, agreement or instrument:

 (i) authorising the variation or abrogation of rights attaching to any of the interests in the trust; or

 (ii) relating to the conversion, cancellation, extinguishment or redemption of any of those interests; or

 (b) any contract, *arrangement, option or instrument under which a person has power to acquire any of those interests; or

 (c) any power, authority or discretion in a person in relation to the rights attaching to any of those interests;

it is reasonable to conclude that the rights attaching to any of the interests are capable of being varied or abrogated in such a way (even if they are not in fact varied or abrogated in that way) that, directly or indirectly, the trust would be disqualified under subsection (1).

Tracing

 (4) In applying this section:

 (a) if a *complying superannuation fund, *approved deposit fund or *superannuation fund for foreign residents has more than 50 members and has, directly or indirectly, a *fixed entitlement to any of the trust’s income or capital—that entitlement is taken to be held by more than 20 individuals for their own benefit; and

 (b) if a complying superannuation fund, approved deposit fund or superannuation fund for foreign residents has 50 or fewer members and has, directly or indirectly, a fixed entitlement to any of the trust’s income or capital—each of the members is taken to have a share of that entitlement, in equal proportions, for his or her own benefit.

45288  Resident investment trusts for beneficiaries who are absolutely entitled

  This section covers a trust if:

 (a) the trust is a resident unit trust within the meaning of section 102Q of the Income Tax Assessment Act 1936; and

 (b) the trust is of the kind covered by subsection 45280(6) in this Schedule; and

 (c) the requests or directions that beneficiaries may give the trustee are limited to requests or directions as to which of the activities listed in the definition of eligible investment business in section 102M of the Income Tax Assessment Act 1936 the trustee should engage in; and

 (d) all of the trust’s beneficiaries became beneficiaries as a result of a public offer to invest in the trust; and

 (e) either:

 (i) the trust has 50 or more beneficiaries; or

 (ii) if the trustee of the trust is also the trustee of one or more other trusts that satisfy paragraphs (a), (b), (c) and (d) of this section—all those trusts together have a total of 50 or more beneficiaries.

45290  Exceptions to exclusion of trust capital gains from beneficiary’s instalment income

 (1) This section sets out cases where paragraph (b) of the definition of your assessable income from the trust for the last income year in subsection 45280(2) does not apply.

 (2) It does not apply in the case of:

 (a) a *complying approved deposit fund or a *noncomplying approved deposit fund for the income year that is or includes the current period; or

 (b) a *complying superannuation fund or a *noncomplying superannuation fund for that year; or

 (c) a *pooled superannuation trust for that year.

 (3) It does not apply in the case of a *life insurance company to the extent that the share of the trust’s net income is included in the *complying superannuation class of its taxable income for the income year that is or includes the current period.

Subdivision 45JHow Commissioner works out your instalment rate and notional tax

Table of sections

45320 Working out instalment rate

45325 Working out your notional tax

45330 Working out your adjusted taxable income

45335 Working out your adjusted withholding income

45340 Adjusted tax on adjusted taxable income or on adjusted withholding income

45320  Working out instalment rate

 (1) Except as provided by section 45775, an instalment rate that the Commissioner gives you must be the percentage worked out to 2 decimal places (rounding up if the third decimal place is 5 or more) using the formula:

Start formula start fraction Your *notional tax over Base assessment instalment income end fraction times 100 end formula

However, the instalment rate must be a nil rate if either component of the formula is nil.

 (2) For the purposes of the formula in subsection (1):

base assessment instalment income means so much of your assessable income, as worked out for the purposes of the *base assessment, as the Commissioner determines is *instalment income for the *base year.

 (3) The base assessment is the latest assessment for your most recent income year for which an assessment has been made. However, if the Commissioner is satisfied that there is a later income year for which you do not have a taxable income, the base assessment is the latest return or other information from which an assessment for that income year would have been made.

 (4) The base year is the income year to which the *base assessment relates.

 (5) When the Commissioner gives you the instalment rate, he or she must also notify you of the amount of your *notional tax, as worked out for the purposes of working out the instalment rate.

45325  Working out your notional tax

Notional tax if you have no withholding income

 (1) Your notional tax is your *adjusted tax (worked out under section 45340) on your *adjusted taxable income (worked out under section 45330) for the *base year.

Notional tax if you have noTFN contributions income

 (1A) In working out the notional tax of a *complying superannuation fund, *noncomplying superannuation fund or *RSA provider for the *base year, assume that the entity had no *noTFN contributions income for the base year and that the entity was not entitled to a *tax offset for the base year under Subdivision 295J of the Income Tax Assessment Act 1997.

Notional tax if you have withholding income

 (2) However, your notional tax (as worked out under subsection (1)) is reduced if your assessable income for the *base assessment includes amounts in respect of *withholding payments (except *nonquotation withholding payments).

 (3) It is reduced (but not below nil) by your *adjusted tax (worked out under section 45340) on your *adjusted withholding income (worked out under section 45335) for the *base year.

Commissioner may take into account effect of the law, as applying to income years after base year

 (4) For the purposes of working out your *notional tax, the Commissioner may work out an amount as if provisions of an Act or regulations, as they may reasonably be expected to apply for the purposes of your assessment for a later income year, had applied for the purposes of the *base assessment.

Commissioner may take into account proposed changes to the law so as to reduce instalment rate

 (5) For the purposes of working out your *notional tax, the Commissioner may work out an amount as if provisions of an Act or regulations that, in the Commissioner’s opinion, are likely to be enacted or made had applied for the purposes of the *base assessment. But the Commissioner may do so only if, as a result, the instalment rate given to you is reduced.

 (6) If the *base year is the income year immediately preceding the income year in which 1 July 2000 occurred, subsections (4) and (5) apply for the purpose of working out the *base assessment instalment income of a *life insurance company in the same way as they apply for the purpose of working out such a company’s *notional tax.

45330  Working out your adjusted taxable income

 (1) Your adjusted taxable income for the *base year is your total assessable income for the *base assessment, reduced by:

 (a) any *net capital gain included in that assessable income; and

 (b) your deductions for the base year (except *tax losses), as used in making that assessment; and

 (c) the amount of any tax loss, to the extent that it is *unutilised at the end of the base year.

Exception: superannuation entities and net capital gains

 (2) Paragraph (1)(a) does not apply in the case of:

 (a) a *complying approved deposit fund or a *noncomplying approved deposit fund for the *base year; or

 (b) a *complying superannuation fund or a *noncomplying superannuation fund for that year; or

 (c) a *pooled superannuation trust for that year.

Special rule for some entities

 (2A) If an entity:

 (a) has *tax losses transferred to it under Subdivision 707A of the Income Tax Assessment Act 1997; or

 (b) is a *corporate tax entity at any time during the *base year;

the adjusted taxable income of the entity for the base year is worked out under subsection (1) as if paragraph (1)(c) were replaced by the following provision:

 (c) the lesser of the following amounts:

 (i) the amount of any tax loss, to the extent that it is *unutilised at the end of the base year;

 (ii) the amount of the deductions for tax losses used in making your *base assessment.

Amounts assessable under Subdivision 250E of the Income Tax Assessment Act 1997

 (2AA) To avoid doubt, paragraph (1)(a) does not apply to a *net capital gain that is included in your assessable income under Subdivision 250E of the Income Tax Assessment Act 1997.

Special rule for life insurance companies

 (3) The adjusted taxable income of a *life insurance company for the *base year is worked out as follows:

Method statement

Step 1. Recalculate the taxable income of the *ordinary class for the *base assessment on the basis that it did not include any *net capital gain.

Step 2. Add to the step 1 result the deductions for *tax losses of the *ordinary class that were used in making the *base assessment.

Step 3. Reduce the step 2 result by the lesser of the following amounts:

 (a) the amount of any *tax losses of the *ordinary class, to the extent that they are *unutilised at the end of the *base year;

 (b) deductions for tax losses of the ordinary class that were used in making the *base assessment.

Step 4. Add to the step 3 result the taxable income of the *complying superannuation class for the *base assessment.

Step 5. Add to the step 4 result the deductions for *tax losses of the *complying superannuation class that were used in making the *base assessment.

Step 6. Reduce the step 5 result by the lesser of the following amounts:

 (a) the amount of any *tax losses of the *complying superannuation class, to the extent that they are *unutilised at the end of the *base year;

 (b) deductions for tax losses of the complying superannuation class that were used in making the *base assessment.

 The result of this step is the adjusted taxable income of the company for the *base year.

45335  Working out your adjusted withholding income

  Your adjusted withholding income for the *base year is:

  the total of the amounts included in your assessable income for the *base assessment in respect of *withholding payments (except *nonquotation withholding payments);

reduced by:

  your deductions for that year, as used in making that assessment, to the extent that they reasonably relate to those amounts.

45340  Adjusted tax on adjusted taxable income or on adjusted withholding income

  Your adjusted tax on your *adjusted taxable income, or on your *adjusted withholding income, for the *base year is worked out as follows:

Method statement

Step 1. The income tax payable on your *adjusted taxable income, or on your *adjusted withholding income, for the *base year is worked out disregarding any *tax offset under:

 (aa) section 61110 of the Income Tax Assessment Act 1997 (the Low Income tax offset); or

 (a) Subdivision 61G of the Income Tax Assessment Act 1997 (the private health insurance tax offset); or

 (da) Subdivision 61L of the Income Tax Assessment Act 1997 (tax offset for Medicare levy surcharge (lump sum payments in arrears)); or

 (db) Division 160 of the Income Tax Assessment Act 1997 (the corporate loss carry back tax offset for 202021, 202122 or 202223 for businesses with turnover under $5 billion); or

 (e) section 20570 of the Income Tax Assessment Act 1997 (the tax offset for *franking deficit tax liabilities); or

 (g) section 290230 of the Income Tax Assessment Act 1997 (the tax offset for superannuation contributions made for a spouse); or

 (ga) Subdivision 360A of the Income Tax Assessment Act 1997 (the tax offset for early stage investors in innovation companies); or

 (h) Subdivision 418B of the Income Tax Assessment Act 1997 (the junior minerals exploration incentive tax offset).

Step 2. The *Medicare levy payable on your *adjusted taxable income, or on your *adjusted withholding income, for the *base year is worked out disregarding sections 8B, 8C, 8D, 8E, 8F and 8G of the Medicare Levy Act 1986 (which increase Medicare levy in certain cases).

Step 3. The amount (if any) that you would have been liable to pay for the *base year in respect of an *accumulated HELP debt if your taxable income for the base year had been your *adjusted taxable income, or your *adjusted withholding income, for that year is worked out.

Step 3AAA. The amount (if any) that you would have been liable to pay for the *base year in respect of an *accumulated VETSL debt if your taxable income for the base year had been your *adjusted taxable income, or your *adjusted withholding income, for that year is worked out.

Step 3AA. The amount (if any) that you would have been liable to pay for the *base year in respect of an *accumulated SSL debt if your taxable income for the base year had been your *adjusted taxable income, or your *adjusted withholding income, for that year is worked out.

Step 3AB. The amount (if any) that you would have been liable to pay for the *base year in respect of an *accumulated ABSTUDY SSL debt if your taxable income for the base year had been your *adjusted taxable income, or your *adjusted withholding income, for that year is worked out.

Step 3AC. The amount (if any) that you would have been liable to pay for the *base year in respect of an *accumulated AASL debt if your taxable income for the base year had been your *adjusted taxable income, or your *adjusted withholding income, for that year is worked out.

Step 3A. The amount (if any) that you would have been liable to pay for the *base year by way of an *FS assessment debt if your taxable income for the base year had been your *adjusted taxable income, or your *adjusted withholding income, for that year is worked out.

Step 4. The results of steps 1, 2, 3, 3AAA, 3AA, 3AB, 3AC and 3A are added together. The result is your adjusted tax on your *adjusted taxable income, or on your *adjusted withholding income.

Subdivision 45KHow Commissioner works out your benchmark instalment rate and benchmark tax

Table of sections

45355 When Commissioner works out benchmark instalment rate and benchmark tax

45360 How Commissioner works out benchmark instalment rate

45365 Working out your benchmark tax

45370 Working out your adjusted assessed taxable income for the variation year

45375 Adjusted assessed tax on adjusted assessed taxable income

45355  When Commissioner works out benchmark instalment rate and benchmark tax

 (1) The Commissioner may work out your *benchmark instalment rate for an income year (the variation year) if, under section 45205, you choose an instalment rate to work out the amount of your instalment for an *instalment quarter in that year.

 (1A) The Commissioner may work out your *benchmark tax for an income year (the variation year) if, under paragraph 45112(1)(b) or (c), the amount of your instalment for an *instalment quarter in an income year is worked out on the basis of your estimate of your *benchmark tax for that income year.

 (2) The Commissioner may work out your *benchmark tax for an income year (the variation year) if, under paragraph 45115(1)(c), you estimate the amount of your annual instalment for that year.

45360  How Commissioner works out benchmark instalment rate

 (1) Your benchmark instalment rate for the variation year is the percentage worked out to 2 decimal places (rounding up if the third decimal place is 5 or more) using the formula:

Start formula start fraction Your *benchmark tax over Variation year instalment income end fraction times 100 end formula

However, your benchmark instalment rate is a nil rate if either component of the formula is nil.

 (2) For the purposes of the formula in subsection (1):

variation year instalment income means so much of your assessable income for the variation year as the Commissioner determines is *instalment income for that year.

45365  Working out your benchmark tax

Benchmark tax if you had no withholding income

 (1) Your benchmark tax is your *adjusted assessed tax (worked out under section 45375) on your *adjusted assessed taxable income (worked out under section 45370) for the variation year.

Benchmark tax if you have noTFN contributions income

 (1A) In working out the benchmark tax of a *complying superannuation fund, *noncomplying superannuation fund or *RSA provider for the variation year, assume that the entity had no *noTFN contributions income for the variation year and that the entity was not entitled to a *tax offset for the variation year under Subdivision 295J of the Income Tax Assessment Act 1997.

Benchmark tax if you had withholding income

 (2) However, your benchmark tax (as worked out under subsection (1)) is reduced if your assessable income for the variation year includes amounts in respect of *withholding payments.

 (3) It is reduced (but not below nil) by the sum of:

 (a) the total amount of the credits to which you are entitled for the variation year under section 1815 (for amounts withheld from withholding payments made to you during the variation year); and

 (b) the total amount of the credits to which you are entitled for the variation year under section 1827 (for amounts paid under Division 13 in respect of amounts included in your assessable income under section 8615 of the Income Tax Assessment Act 1997).

45370  Working out your adjusted assessed taxable income for the variation year

 (1) Your adjusted assessed taxable income for the variation year is your taxable income for the year, reduced by any *net capital gain included in your assessable income for the year.

Exception: superannuation entities and net capital gains

 (2) In working out the adjusted assessed taxable income, taxable income is not reduced by any *net capital gain in the case of:

 (a) a *complying approved deposit fund or a *noncomplying approved deposit fund for the variation year; or

 (b) a *complying superannuation fund or a *noncomplying superannuation fund for the variation year; or

 (c) a *pooled superannuation trust for the variation year.

Special rule for life insurance companies

 (3) The adjusted assessed taxable income of a *life insurance company for the variation year is worked out as follows:

Method statement

Step 1. Recalculate the *ordinary class of the taxable income for the variation year on the basis that the assessable income that relates to the class did not include any *net capital gain.

Step 2. Add to the step 1 result the *complying superannuation class of the taxable income for the variation year.

45375  Adjusted assessed tax on adjusted assessed taxable income

  Your adjusted assessed tax on your *adjusted assessed taxable income for the variation year is worked out as follows:

Method statement

Step 1. The income tax payable on your *adjusted assessed taxable income for the variation year is worked out disregarding any *tax offset under:

 (aa) section 61110 of the Income Tax Assessment Act 1997 (the Low Income tax offset); or

 (a) Subdivision 61G of the Income Tax Assessment Act 1997 (the private health insurance tax offset); or

 (ca) Subdivision 61L of the Income Tax Assessment Act 1997 (tax offset for Medicare levy surcharge (lump sum payments in arrears)); or

 (d) section 20570 of the Income Tax Assessment Act 1997 (the tax offset for *franking deficit tax liabilities); or

 (f) section 290230 of the Income Tax Assessment Act 1997 (the tax offset for superannuation contributions made for a spouse); or

 (fa) Subdivision 360A of the Income Tax Assessment Act 1997 (the tax offset for early stage investors in innovation companies); or

 (g) Subdivision 418B of the Income Tax Assessment Act 1997 (the junior minerals exploration incentive tax offset).

Step 2. The *Medicare levy payable on your *adjusted assessed taxable income for the variation year is worked out disregarding sections 8B, 8C, 8D, 8E, 8F and 8G of the Medicare Levy Act 1986 (which increase Medicare levy in certain cases).

Step 3. The amount (if any) that you would have been liable to pay for the variation year in respect of an *accumulated HELP debt if your taxable income for that year had been your *adjusted assessed taxable income for that year is worked out.

Step 3AAA. The amount (if any) that you would have been liable to pay for the variation year in respect of an *accumulated VETSL debt if your taxable income for that year had been your *adjusted assessed taxable income for that year is worked out.

Step 3AA. The amount (if any) that you would have been liable to pay for the variation year in respect of an *accumulated SSL debt if your taxable income for that year had been your *adjusted assessed taxable income for that year is worked out.

Step 3AB. The amount (if any) that you would have been liable to pay for the variation year in respect of an *accumulated ABSTUDY SSL debt if your taxable income for that year had been your *adjusted assessed taxable income for that year is worked out.

Step 3AC. The amount (if any) that you would have been liable to pay for the variation year in respect of an *accumulated AASL debt if your taxable income for that year had been your *adjusted assessed taxable income for that year is worked out.

Step 3A. The amount (if any) that you would have been liable to pay for the variation year by way of an *FS assessment debt if your taxable income for that year had been your *adjusted assessed taxable income for that year is worked out.

Step 4. The results of steps 1, 2, 3, 3AAA, 3AA, 3AB, 3AC and 3A are added together. The result is your adjusted assessed tax on your *adjusted assessed taxable income for the variation year.

Subdivision 45LHow Commissioner works out amount of quarterly instalment on basis of GDPadjusted notional tax

Table of sections

45400 Working out amount of instalment—payers of 4 quarterly instalments

45402 Working out amount of instalment—payers of 2 quarterly instalments

45405 Working out your GDPadjusted notional tax

45400  Working out amount of instalment—payers of 4 quarterly instalments

Scope

 (1) This section applies if you are a *quarterly payer who pays 4 instalments annually on the basis of GDPadjusted notional tax at the end of an *instalment quarter in an income year (the current year).

Working out amount of instalment

 (2) The amount of your instalment for that *instalment quarter which the Commissioner must work out and notify to you under paragraph 45112(1)(a) is:

 (a) the amount worked out in accordance with the table if it is positive; or

 (b) otherwise—nil.

 

Amount of quarterly instalment worked out on basis of GDPadjusted notional tax

Item

If the instalment quarter is:

The amount of the instalment is:

1

the first in that income year for which you are liable to pay an instalment

25% of your *GDPadjusted notional tax

2

the second in that income year for which you are liable to pay an instalment

50% of your *GDPadjusted notional tax, reduced by the amount of your instalment for the earlier *instalment quarter in that income year

3

the third in that income year for which you are liable to pay an instalment

75% of your *GDPadjusted notional tax, reduced by the total of your instalments for earlier *instalment quarters in that income year

4

the fourth in that income year for which you are liable to pay an instalment

100% of your *GDPadjusted notional tax, reduced by the total of your instalments for earlier *instalment quarters in that income year

Note: Your instalments for earlier instalment quarters may have been worked out on a basis other than GDPadjusted notional tax.

Amount reduced in circumstances specified by regulations

 (3) In the circumstances (if any) specified by the regulations, the amount worked out in accordance with the table in subsection (2) is reduced by the amount worked out under the regulations.

 (4) Without limiting subsection (3), the regulations may specify circumstances by:

 (a) specifying the particular *instalment quarter to which the reduction applies; or

 (b) specifying the kind of payers to whom the reduction applies.

 (5) In working out, under subsection (2), the amount of your instalment for an *instalment quarter in an income year, assume that there had not been any reductions under subsection (3) for earlier instalment quarters in that year.

45402  Working out amount of instalment—payers of 2 quarterly instalments

 (1) This section applies if you are a *quarterly payer who pays 2 instalments annually on the basis of GDPadjusted notional tax at the end of an *instalment quarter in an income year (the current year).

 (2) If you are liable to pay an instalment for that *instalment quarter, the amount of that instalment which the Commissioner must work out and notify to you under paragraph 45112(1)(a) is:

 (a) the amount worked out in accordance with this section if it is positive; or

 (b) otherwise—nil.

Amount of instalment

 (3) Subject to subsections (4) to (6), the amount of that instalment is worked out in accordance with the following table:

 

Amount of quarterly instalment

Item

If the *instalment quarter is:

the amount of the instalment is:

1

the third *instalment quarter in the income year

75% of your *GDPadjusted notional tax

2

the fourth *instalment quarter in the income year

100% of your *GDPadjusted notional tax, reduced by your instalment for earlier instalment quarter in that income year

You receive instalment rate for the first time in second quarter

 (4) If the Commissioner gives you an instalment rate for the first time during the second *instalment quarter in that income year, the amount of the instalment is worked out in accordance with the following table:

 

Amount of quarterly instalment

Item

If the *instalment quarter is:

the amount of the instalment is:

1

the third *instalment quarter in the income year

50% of your *GDPadjusted notional tax

2

the fourth *instalment quarter in the income year

75% of your *GDPadjusted notional tax, reduced by your instalment for the earlier instalment quarter in that income year

You receive instalment rate for the first time in third quarter

 (5) If the Commissioner first gives you an instalment rate during the third *instalment quarter in that income year, the amount of the instalment is worked out in accordance with the following table:

 

Amount of quarterly instalment

Item

If the *instalment quarter is:

the amount of the instalment is:

1

the third *instalment quarter in the income year

25% of your *GDPadjusted notional tax

2

the fourth *instalment quarter in the income year

50% of your *GDPadjusted notional tax, reduced by your instalment for the earlier instalment quarter in that income year

You receive instalment rate for the first time in fourth quarter

 (6) If the Commissioner first gives you an instalment rate during the fourth *instalment quarter in that income year, the amount of the instalment must be equal to 25% of your *GDPadjusted notional tax.

45405  Working out your GDPadjusted notional tax

 (1) Except as provided by section 45775, your GDPadjusted notional tax is worked out in the same way as your *notional tax would be worked out for the purposes of working out an instalment rate if that instalment rate were to be given to you at the same time as notice of the amount of the instalment referred to in section 45400 or 45402 (as appropriate).

 (2) However, for the purposes of subsection (1):

 (a) your *adjusted taxable income for the *base year; and

 (b) your *adjusted withholding income (if any) for the *base year;

are each increased in accordance with the formula:

Start formula Original amount times open bracket 1 plus GDP adjustment close bracket end formula

 (3) For the purposes of the formula in subsection (2):

original amount means the amount that, apart from subsection (2), would be your *adjusted taxable income for the *base year, or your *adjusted withholding income for the *base year, as appropriate.

GDP adjustment means:

 (a) the percentage (rounded to the nearest whole number, rounding down a number ending in .5) worked out using the following formula; or

 (b) if the percentage worked out using the formula is negative—0%:

Start formula open bracket 100 times start fraction Sum of GDP amounts (current year) over Sum of GDP amounts (previous year) end fraction close bracket minus 100 end formula

 (4) For the purposes of the formula in subsection (3):

sum of GDP amounts (current year) means the sum of the *GDP amounts, for the *quarters in the last calendar year (the later calendar year) ending at least 3 months before the start of the current year, specified in the document referred to in subsection (6).

sum of GDP amounts (previous year) means the sum of the *GDP amounts, for the *quarters in the calendar year (the earlier calendar year) before the later calendar year, specified in the document referred to in subsection (6).

 (5) The GDP amount for a *quarter is the amount published by the Australian Statistician as the original gross domestic product at current prices for that quarter.

 (6) The GDP adjustment must be worked out on the basis of the first document that:

 (a) is published by the Australian Statistician after the end of the later calendar year; and

 (b) sets out the *GDP amounts for all the *quarters in both the later calendar year and the earlier calendar year.

 (7) To avoid doubt, subsections 45325(4) and (5) also have effect for the purposes of working out your *GDPadjusted notional tax.

Nil GDP adjustment for 202021 income year

 (8) Despite subsections (3) and (6), if the current year is the 202021 income year, then for the purposes of the formula in subsection (2) the GDP adjustment is 0%.

Note: This subsection will be repealed on 1 July 2025: see Part 2 of Schedule 5 to the Treasury Laws Amendment (2020 Measures No. 3) Act 2020.

Reduced GDP adjustment for 202223 income year

 (9) Despite subsections (3) and (6), if the current year is the 202223 income year, then for the purposes of the formula in subsection (2) the GDP adjustment is 2%.

Note: This subsection will be repealed on 1 July 2027: see Part 2 of Schedule 5 to the Treasury Laws Amendment (Cost of Living Support and Other Measures) Act 2022.

Reduced GDP adjustment for 202324 income year

 (10) Despite subsections (3) and (6), if the current year is the 202324 income year, then for the purposes of the formula in subsection (2) the GDP adjustment is 6%.

Note: This subsection will be repealed on 1 July 2028: see Part 2 of Schedule 4 to the Treasury Laws Amendment (2023 Measures No. 2) Act 2023.

Subdivision 45MHow amount of quarterly instalment is worked out on basis of your estimate of your benchmark tax

Table of sections

45410 Working out amount of instalment—payers of 4 quarterly instalments

45412 Working out amount of instalment—payers of 2 quarterly instalments

45415 Estimating your benchmark tax

45420 Credit in certain cases where amount of instalment is nil

45410  Working out amount of instalment—payers of 4 quarterly instalments

 (1A) This section applies if you are a *quarterly payer who pays 4 instalments annually on the basis of GDPadjusted notional tax at the end of an *instalment quarter in an income year (the current year).

 (1) For the purposes of paragraph 45112(1)(b) or (c), the amount of your instalment for that *instalment quarter in an income year is:

 (a) the amount worked out, in accordance with this section, on the basis of the estimate of your *benchmark tax for that income year that section 45415 requires to be used, if that amount is positive; or

 (b) otherwise—nil.

Note: If the amount is negative, you can claim a credit under section 45420.

First instalment quarter

 (2) If the *instalment quarter is the first in that income year for which you are liable to pay an instalment, the amount is 25% of the estimate of your *benchmark tax.

Second instalment quarter

 (3) If the *instalment quarter is the second in that income year for which you are liable to pay an instalment, the amount is worked out by subtracting:

  the amount of your instalment under section 45112 for the earlier *instalment quarter in that income year;

from:

  50% of the estimate of your *benchmark tax.

Third instalment quarter

 (4) If the *instalment quarter is the third in that income year for which you are liable to pay an instalment, the amount is worked out using this method statement.

Method statement

Step 1. The total of your instalments under section 45112 for earlier *instalment quarters in that income year is subtracted from 75% of the estimate of your *benchmark tax.

Step 2. If you were entitled to claim a credit under section 45420 for the second of those earlier *instalment quarters, the amount of the credit is added to the step 1 amount.

Fourth instalment quarter

 (5) If the *instalment quarter is the fourth in that income year for which you are liable to pay an instalment, the amount is worked out using this method statement.

Method statement

Step 1. The total of your instalments under section 45112 for earlier *instalment quarters in that income year is subtracted from the estimate of your *benchmark tax.

Step 2. For each credit that you were entitled to claim under section 45420 for any of those earlier *instalment quarters, the amount of the credit is added to the step 1 amount.

45412  Working out amount of instalment—payers of 2 quarterly instalments

 (1) This section applies if you are a *quarterly payer who pays 2 instalments annually on the basis of GDPadjusted notional tax at the end of an *instalment quarter in an income year.

 (2) If you are liable to pay an instalment for that quarter, the amount of that instalment for the purposes of paragraph 45112(1)(b) or (c) is:

 (a) the amount worked out, in accordance with this section, on the basis of the estimate of your *benchmark tax for that income year that section 45415 requires to be used, if that amount is positive; or

 (b) otherwise—nil.

Note: If the amount is negative, you can claim a credit under section 45420.

Instalment for third quarter

 (3) Subject to subsections (5) to (9), the amount of the instalment for the third *instalment quarter in that year is 75% of the estimate of your *benchmark tax.

Instalment for fourth quarter

 (4) Subject to subsections (5) to (9), the amount of the instalment for the fourth *instalment quarter in that year is worked out by subtracting:

 (a) the amount of your instalment for the earlier instalment quarter in that year;

from:

 (b) the estimate of your *benchmark tax.

You receive instalment rate for the first time in second quarter

 (5) If the Commissioner gives you an instalment rate for the first time during the second *instalment quarter in the income year, the amount of the instalment for the third *instalment quarter in that year is 50% of the estimate of your *benchmark tax.

 (6) If the Commissioner gives you an instalment rate for the first time during the second *instalment quarter in the income year, the amount of the instalment for the fourth instalment quarter in that year is worked out by subtracting:

 (a) the amount of your instalment for the earlier instalment quarter in that year;

from:

 (b) 75% of the estimate of your *benchmark tax.

You receive instalment rate for the first time in third quarter

 (7) If the Commissioner gives you an instalment rate for the first time during the third *instalment quarter in the income year, the amount of the instalment for the third instalment quarter in that year is 25% of the estimate of your *benchmark tax.

 (8) If the Commissioner gives you an instalment rate for the first time during the third *instalment quarter in the income year, the amount of the instalment for the fourth instalment quarter in that year is worked out by subtracting:

 (a) the amount of your instalment for the earlier instalment quarter in that year;

from:

 (b) 50% of the estimate of your *benchmark tax.

You receive instalment rate for the first time in fourth quarter

 (9) If the Commissioner gives you an instalment rate for the first time during the fourth *instalment quarter in the income year, the amount of the instalment for that quarter is 25% of the estimate of your *benchmark tax.

45415  Estimating your benchmark tax

 (1) If you choose under paragraph 45112(1)(b) to work out the amount of your instalment for an *instalment quarter in an income year on the basis of your estimate of your *benchmark tax for that income year, you must make the estimate on or before the day on which the instalment is due (disregarding subsection 45112(3)).

 (2) Having done so, you must use that estimate to work out the amount of that instalment. (You cannot later make another estimate for working out that amount.)

Note: If your estimate leads you to pay an instalment that is too low, you may be liable to general interest charge under section 45232.

 (3) The Commissioner must also use that estimate to work out under this Subdivision the amount of each instalment:

 (a) that you are liable to pay for a later *instalment quarter in that income year; and

 (b) whose amount he or she must notify to you under paragraph 45112(1)(c);

unless a later application of this subsection requires him or her to use a later estimate you make under subsection (1) of this section.

Note: This means that if an estimate you have made is not appropriate for a later instalment quarter in the same income year, you should choose under paragraph 45112(1)(b) to work out the amount of your instalment for that later quarter on the basis of a new estimate under this section. If the instalment that the Commissioner works out on the basis of the earlier estimate is too low, you may be liable to general interest charge under section 45232.

45420  Credit in certain cases where amount of instalment is nil

 (1) You are entitled to claim a credit if the amount of your instalment for an *instalment quarter (the current quarter) in an income year is nil because the amount worked out for the current quarter in accordance with section 45410 or 45412 (as appropriate) is negative. The amount of the credit is equal to that amount, expressed as a positive amount.

 (2) A claim for a credit must be made in the *approved form on or before the day on which the instalment for the current quarter is due.

Note: How the credit is applied is set out in Division 3 of Part IIB.

Subdivision 45NHow this Part applies to the trustee of a trust

Table of sections

Trustees to whom this Part applies

45450 Trustees to whom a single instalment rate is given

45455 Trustees to whom several instalment rates are given

45460 Rest of Subdivision applies only to multirate trustees

45465 Meaning of instalment income

45468 Multirate trustee may pay quarterly instalments

How Commissioner works out instalment rate and notional tax for a multirate trustee

45470 Working out instalment rate

45473 Commissioner must notify you of notional tax

45475 Working out your notional tax

45480 Working out your adjusted taxable income

45483 Meaning of reduced beneficiary’s share and reduced no beneficiary’s share

45485 Working out your adjusted withholding income

How Commissioner works out benchmark instalment rate and benchmark tax for a multirate trustee

45525 When Commissioner works out benchmark instalment rate and benchmark tax

45530 How Commissioner works out benchmark instalment rate

45535 Working out your benchmark tax

Trustees to whom this Part applies

45450  Trustees to whom a single instalment rate is given

 (1) This Part applies to a trustee covered by any of items 4 to 8, and 12 and 13, of the table in section 91 of the Income Tax Assessment Act 1997.

 (2) Such a trustee is called a singlerate trustee.

 (3) This Part applies to the trustee of a trust that is a *public trading trust, for an income year as if the trustee had a taxable income for the income year equal to the net income of the trust for the income year.

45455  Trustees to whom several instalment rates are given

Trustee previously assessed in respect of beneficiary

 (1) This Part also applies for an income year (the current year), to the trustee of a trust, in respect of a beneficiary of the trust, if for a previous income year the trustee of the trust was liable to be assessed, and to pay tax, under subsection 98(1) or (2) of the Income Tax Assessment Act 1936 in respect of that beneficiary.

 (2) However, this Part does not apply for the current year to the trustee in respect of that beneficiary if:

 (a) for that previous income year the trustee was liable to be assessed, and to pay tax, under subsection 98(1) of the Income Tax Assessment Act 1936 in respect of that beneficiary; and

 (b) that beneficiary will no longer be under a legal disability, or it is reasonable to expect that he or she will no longer be under a legal disability, at the end of the current year.

Trustee previously assessed under section 99 or 99A

 (3) This Part also applies for an income year to the trustee of a trust if for a previous income year the trustee was liable to be assessed, and to pay tax, under section 99 or 99A of the Income Tax Assessment Act 1936.

Multiple applications of this Part to the same trustee for the same income year

 (4) The application of this Part for an income year, to the trustee of a trust, in respect of a beneficiary of the trust, because of subsection (1), is distinct from, and additional to, each of the following:

 (a) the application of this Part for that income year, to the trustee of the trust, in respect of another beneficiary;

 (b) the application of this Part for that income year, to the trustee of the trust, because of subsection (3);

 (c) the application of this Part for that income year to a beneficiary of the trust.

 (5) The application of this Part for an income year, to the trustee of a trust, because of subsection (3), is distinct from, and additional to, each of the following:

 (a) the application of this Part for that income year, to the trustee of the trust, in respect of a beneficiary of the trust, because of subsection (1);

 (b) the application of this Part for that income year to a beneficiary of the trust.

 (6) A multirate trustee is a trustee to whom this Part applies because of this section.

45460  Rest of Subdivision applies only to multirate trustees

  The rest of this Subdivision applies to you if, and only if, you are a *multirate trustee. (It applies instead of Subdivisions 45J and 45K.)

Note: Except as provided in the rest of this Subdivision or elsewhere, this Part applies according to its terms to a multirate trustee. For example, a multirate trustee can become an annual payer under Subdivision 45E.

45465  Meaning of instalment income

  Your instalment income for a period is the whole of the trust’s *instalment income for that period.

45468  Multirate trustee may pay quarterly instalments

  Subdivision 45D (about quarterly payers) applies to you in the same way as it applies to an individual.

Note: This means that a multirate trustee may pay instalments on the basis of GDPadjusted notional tax if the trustee otherwise satisfies the relevant test that applies to an individual.

How Commissioner works out instalment rate and notional tax for a multirate trustee

45470  Working out instalment rate

 (1) An instalment rate that the Commissioner gives you must be the percentage worked out to 2 decimal places (rounding up if the third decimal place is 5 or more) using the formula:

Start formula start fraction Your *notional tax over Base assessment instalment income end fraction times 100 end formula

However, the instalment rate must be a nil rate if either component of the formula is nil.

 (2) For the purposes of the formula in subsection (1):

base assessment instalment income means so much of the assessable income of the trust, as worked out for the purposes of the *base assessment, as the Commissioner determines is *instalment income of the trust for the *base year.

 (3) The base assessment is the latest assessment for the most recent income year for which an assessment has been made of the tax payable by you:

 (a) under subsection 98(1) or (2) of the Income Tax Assessment Act 1936 in respect of the same beneficiary; or

 (b) under section 99 or 99A of the Income Tax Assessment Act 1936;

as appropriate.

 (4) However, if the Commissioner is satisfied that there is a later income year for which no tax is payable as mentioned in subsection (3), the base assessment is the latest return or other information from which an assessment of tax so payable for that income year would have been made.

 (5) The base year is the income year to which the *base assessment relates.

45473  Commissioner must notify you of notional tax

  When the Commissioner gives you the instalment rate, he or she must also notify you of the amount of your *notional tax, as worked out for the purposes of working out the instalment rate.

45475  Working out your notional tax

Notional tax if no withholding income

 (1) Your notional tax is your *adjusted tax (worked out under section 45340) on your *adjusted taxable income (worked out under section 45480) for the *base year.

Notional tax if trust has withholding income

 (2) However, your notional tax (as worked out under subsection (1)) is reduced if the trust’s assessable income for the *base assessment includes amounts in respect of *withholding payments (except *nonquotation withholding payments).

 (3) It is reduced (but not below nil) by your *adjusted tax (worked out under section 45340) on your *adjusted withholding income (worked out under section 45485) for the *base year.

Commissioner may take into account actual and proposed changes to the law

 (4) Subsections 45325(4) and (5) apply for the purposes of working out your *notional tax under this section.

45480  Working out your adjusted taxable income

 (1) Your adjusted taxable income for the *base year is worked out using the formula:

Start formula Adjusted net income of the trust times start fraction Relevant share over Reduced net income of the trust end fraction end formula

 (2) For the purposes of the formula in subsection (1):

adjusted net income of the trust means the net income of the trust, as worked out for the purposes of the *base assessment and:

 (a) reduced by any *net capital gain included in the trust’s assessable income as so worked out; and

 (b) increased by any deductions for *tax losses that were made in so working out that net income; and

 (c) reduced by the amount of any tax loss, to the extent that it is *unutilised at the end of the *base year.

reduced net income of the trust means the net income of the trust, as worked out for the purposes of the *base assessment and reduced by any *net capital gain included in the trust’s assessable income as so worked out.

relevant share means the *reduced beneficiary’s share, or the *reduced no beneficiary’s share, as appropriate, of the net income of the trust, as worked out for the purposes of the *base assessment.

45483  Meaning of reduced beneficiary’s share and reduced no beneficiary’s share

 (1) If the trustee of a trust is liable to be assessed, and to pay tax, for an income year under subsection 98(1) or (2) of the Income Tax Assessment Act 1936 in respect of a particular beneficiary, the reduced beneficiary’s share of the net income is the amount on which the trustee is so liable to be assessed and to pay tax, except so much of that amount as is attributable to a *net capital gain included in the trust’s assessable income for that income year.

 (2) If the trustee of a trust is liable to be assessed, and to pay tax, for an income year under section 99 or 99A of the Income Tax Assessment Act 1936, the reduced no beneficiary’s share of the net income is the amount on which the trustee is so liable to be assessed and to pay tax, except so much of that amount as is attributable to a *capital gain made by the trust during that income year.

45485  Working out your adjusted withholding income

 (1) Your adjusted withholding income for the *base year is worked out using the formula:

Start formula Net withholding income of the trust times start fraction Relevant share over Reduced net income of the trust end fraction end formula

 (2) For the purposes of the formula in subsection (1):

net withholding income of the trust means:

  the total of the amounts included in the trust’s assessable income for the *base assessment in respect of *withholding payments (except *nonquotation withholding payments);

reduced by:

  the trust’s deductions for that year, as used in making that assessment, to the extent that they reasonably relate to those amounts.

reduced net income of the trust has the meaning given by subsection 45480(2).

relevant share has the meaning given by subsection 45480(2).

How Commissioner works out benchmark instalment rate and benchmark tax for a multirate trustee

45525  When Commissioner works out benchmark instalment rate and benchmark tax

 (1) The Commissioner may work out your *benchmark instalment rate for an income year (the variation year) if, under section 45205, you choose an instalment rate to work out the amount of your instalment for an *instalment quarter in that year.

 (2) The Commissioner may work out your *benchmark tax for an income year (the variation year) if, under paragraph 45112(1)(b) or (c), the amount of your instalment for an *instalment quarter in an income year is worked out on the basis of your estimate of your *benchmark tax for that income year.

 (3) The Commissioner may work out your *benchmark tax for an income year (the variation year) if, under paragraph 45115(1)(c), you estimate the amount of your annual instalment for that year.

45530  How Commissioner works out benchmark instalment rate

 (1) Your benchmark instalment rate for the variation year is the percentage worked out to 2 decimal places (rounding up if the third decimal place is 5 or more) using the formula:

Start formula start fraction Your *benchmark tax over Variation year instalment income end fraction times 100 end formula

However, your benchmark instalment rate is a nil rate if either component of the formula is nil.

 (2) For the purposes of the formula in subsection (1):

variation year instalment income means so much of the trust’s assessable income for the variation year as the Commissioner determines is *instalment income for that year.

45535  Working out your benchmark tax

Benchmark tax if no withholding income

 (1) Your benchmark tax is your *adjusted assessed tax (worked out under section 45375) on the *reduced beneficiary’s share, or the *reduced no beneficiary’s share, as appropriate, of the net income of the trust for the variation year.

Benchmark tax if you had withholding income

 (2) However, your benchmark tax (as worked out under subsection (1)) is reduced if the trust’s assessable income for the variation year includes amounts in respect of *withholding payments.

 (3) It is reduced (but not below nil) by the total amount of the credits to which you are entitled for the variation year under section 1825 (for amounts withheld from the withholding payments).

Subdivision 45PAntiavoidance rules

Table of sections

45595 Object of this Subdivision

45597 Effect of Subdivision in relation to instalment months

45600 General interest charge on tax benefit relating to instalments

45605 When do you get a tax benefit from a scheme?

45610 What is your tax position for an income year?

45615 What is your hypothetical tax position for an income year?

45620 Amount on which GIC is payable, and period for which it is payable

45625 Credit if you also got a tax detriment from the scheme

45630 When do you get a tax detriment from a scheme?

45635 No tax benefit or detriment results from choice for which income tax law expressly provides

45640 Commissioner may remit general interest charge in special cases

45595  Object of this Subdivision

 (1) The object of this Subdivision is to penalise an entity whose *tax position, so far as it relates to *PAYG instalments (and related credits and *general interest charge), is altered by a *scheme that is inconsistent with:

 (a) the purposes and objects of this Part ; or

 (b) the purposes and objects of any relevant provisions of this Part;

(whether those purposes and objects are stated expressly or not).

 (2) This Subdivision is not intended to apply to a straightforward use of structural features of this Part if that use is consistent with the purposes and objects mentioned in subsection (1).

 (3) This Subdivision is to be interpreted and applied accordingly.

45597  Effect of Subdivision in relation to instalment months

  This Subdivision has effect in relation to an *instalment month in the same way in which it has effect in relation to an *instalment quarter.

45600  General interest charge on tax benefit relating to instalments

 (1) You are liable to pay the *general interest charge under section 45620 if:

 (a) you get a *tax benefit from a *scheme; and

 (b) the tax benefit relates to a *component of your *tax position for an income year, and that component is covered by section 45610; and

 (c) having regard to the matters referred to in subsection (3), it would be concluded that an entity that entered into or carried out the scheme (or part of it) did so for the sole or dominant purpose of:

 (i) an entity (whether you, that entity or another entity) getting one or more tax benefits from the scheme; or

 (ii) 2 or more entities (whether or not including you or that entity) each getting one or more tax benefits from the scheme.

 (2) It does not matter:

 (a) whether or not you entered into or carried out the *scheme (or part of it); or

 (b) whether the entity that entered into or carried out the scheme (or part of it) did so alone or together with one or more others; or

 (c) whether the scheme (or any part of it) was entered into or carried out inside or outside Australia; or

 (d) whether or not the *tax benefit you got is of the same kind as a tax benefit mentioned in paragraph (1)(c).

Matters to be considered in determining purpose of scheme

 (3) In considering an entity’s purpose in entering into or carrying out a *scheme (or part of one), have regard to these matters:

 (a) the manner in which the scheme or part was entered into 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) the purposes and objects of this Part and of any relevant provisions of this Part (whether those purposes and objects are stated expressly or not);

 (d) the timing of the scheme;

 (e) the period over which the scheme was entered into and carried out;

 (f) the effect that this Act would have in relation to the scheme apart from this Subdivision;

 (g) any change in your financial position that has resulted from the scheme, or may reasonably be expected to result from it;

 (h) any change that has resulted from the scheme, or may reasonably be expected to result from it, in the financial position of an entity that has or had a connection or dealing with you, whether the connection or dealing is or was of a family, business or other nature;

 (i) any other consequence for you, or for such an entity, of the scheme having been entered into or carried out;

 (j) the nature of the connection between you and such an entity, including the question whether the dealing is or was at *arm’s length.

GIC is payable on each of 2 or more tax benefits

 (4) If you get 2 or more *tax benefits from the *scheme, this section has a separate application to each of them.

45605  When do you get a tax benefit from a scheme?

 (1) This section describes how to work out whether you get a tax benefit from a *scheme and, if so, the amount of the tax benefit.

 (2) First, determine your actual *tax position for an income year (apart from this Subdivision).

 (3) Next, determine your *hypothetical tax position for the same income year (apart from this Subdivision).

 (4) Then compare each *component of the 2 positions. If the amount of that component of the actual *tax position is lower than the amount of that component of the *hypothetical tax position, the difference between the 2 amounts is a tax benefit that you get from the *scheme.

Note 1: The difference between the 2 amounts is not a tax benefit to the extent that it is attributable to certain things for which the income tax law expressly provides. See section 45635.

Note 2: An entity may get 2 or more tax benefits from the same scheme. One reason is that the scheme may affect 2 or more components of the entity’s tax position for an income year. Another reason is that the scheme may affect the tax position for 2 or more income years.

45610  What is your tax position for an income year?

  Your tax position for an income year consists of a number of components. The table sets out each component, and how to work out the amount of the component.

 

Components of your tax position that relate to PAYG instalments and credits

Item

Each of these is a component:

The amount of that component is:

1

Your instalment for each *instalment quarter in the income year is a quarterly instalment component.

The amount worked out as follows:

(a) if you are liable to pay an instalment for that instalment quarter—the amount of the instalment; or

(b) if for any reason you are not liable to pay an instalment for that instalment quarter—nil (even if you are an *annual payer or a *quarterly payer who pays 2 instalments annually on the basis of GDPadjusted notional tax); or

(c) if you are entitled to claim a credit for that instalment quarter under section 45420 (because the instalment for that quarter is to be worked out on the basis of your estimated benchmark tax)—the amount of the credit (expressed as a negative amount).

2

Your annual instalment for the income year is the annual instalment component.

The amount worked out as follows:

(a) if you are liable to pay an annual instalment for the income year—the amount of the instalment; or

(b) if for any reason you are not liable to pay an annual instalment for the income year—nil (even if you are a *quarterly payer).

3

A variation credit component is a credit arising under section 45215 because the amount of your instalment for an *instalment quarter in the income year is to be worked out using an instalment rate you chose under section 45205.

The amount worked out as follows:

(a) if you are entitled to the credit—the amount of the credit (expressed as a negative amount); or

(b) otherwise—nil.

4

A variation GIC component is the *general interest charge you are liable to pay under:

(a) subsection 45230(2) (varied instalment rate); or

(b) subsection 45232(2) (estimated benchmark tax); or

(c) subsection 45235(2) or (3) (annual instalment);

because of how your instalment for an *instalment quarter in the income year, or for the income year, was worked out.

The amount worked out as follows:

(a) if you are liable to pay the charge—the amount of the charge; or

(b) otherwise—nil.

Example: A scheme results in X Pty Ltd being able to choose to be an annual payer for the 200001 income year.

 The following table shows the actual tax position of X Pty Ltd for that year, and also its hypothetical tax position as defined in section 45615. X Pty Ltd has got 4 tax benefits from the scheme: one for each of the 4 instalment quarters.

 

200001 income year

For this component:

The amount of that component of the actual tax position is:

The amount of that component of the hypothetical tax position is:

Quarterly instalment component for first instalment quarter

nil

$3,000

Quarterly instalment component for second instalment quarter

nil

$4,000

Quarterly instalment component for third instalment quarter

nil

$3,000

Quarterly instalment component for fourth instalment quarter

nil

$2,000

Annual instalment component

$12,000

nil

45615  What is your hypothetical tax position for an income year?

  Your hypothetical tax position for an income year is what would have been, or what could reasonably be expected to have been, your *tax position for the income year if the *scheme had not been entered into or carried out.

45620  Amount on which GIC is payable, and period for which it is payable

 (1) You are liable to pay the *general interest charge on twice the *tax benefit mentioned in paragraph 45600(1)(a).

Note 1: To the extent that you also got a tax detriment from the scheme, you get a credit: see section 45625.

Note 2: In special circumstances the Commissioner can remit some or all of the general interest charge: see section 45640.

 (2) You are liable to pay the charge for each day in the period that:

 (a) started at the beginning of the day by which your instalment for the period mentioned in the applicable item of the table in section 45610 was due to be paid, or would have been due to be paid if you had been liable to pay an instalment for that period; and

 (b) finishes at the end of the day on which your assessed tax for the income year is due to be paid.

 (3) The Commissioner must give you written notice of the *general interest charge to which you are liable under subsection (1). You must pay the charge within 14 days after the notice is given to you.

 (4) If any of the *general interest charge to which you are liable under subsection (1) remains unpaid at the end of the 14 days referred to in subsection (3), you are also liable to pay the general interest charge on the unpaid amount for each day in the period that:

 (a) starts at the end of those 14 days; and

 (b) finishes at the end of the last day on which, at the end of the day, any of the following remains unpaid:

 (i) the unpaid amount;

 (ii) general interest charge on the unpaid amount.

45625  Credit if you also got a tax detriment from the scheme

 (1) You are entitled to a credit if:

 (a) you are liable to pay *general interest charge under section 45620 because you got one or more *tax benefits from the *scheme; and

 (b) the Commissioner is satisfied that:

 (i) you got a *tax detriment from the scheme; and

 (ii) the tax detriment relates to a *component of your *tax position for an income year, and that component is covered by section 45610.

(It does not matter whether that income year is the same as the one referred to in section 45600.)

Note: How the credit is applied is set out in Division 3 of Part IIB.

 (2) The credit is equal to the *general interest charge on twice the amount of the *tax detriment for each day in the period that:

 (a) started at the beginning of the day by which your instalment for the period mentioned in the item of the table in section 45610 that applies for the purposes of working out the amount of the tax detriment:

 (i) was due to be paid; or

 (ii) would have been due to be paid if you had been liable to pay an instalment for that period; and

 (b) finishes at the end of the day on which your assessed tax for the income year is due to be paid.

 (3) However, the credit cannot exceed the total *general interest charge you are liable to pay under section 45620 because you got one or more *tax benefits from the *scheme.

Credit for each of 2 or more tax detriments

 (4) If you get 2 or more *tax detriments from the scheme, subsections (1) and (2) have a separate application to each of them. However, the total of the credits cannot exceed the total *general interest charge referred to in subsection (3).

45630  When do you get a tax detriment from a scheme?

 (1) This section describes how to work out whether you get a tax detriment from a *scheme and, if so, the amount of the tax detriment.

 (2) First, determine your actual *tax position for an income year (apart from this Subdivision).

 (3) Next, determine your *hypothetical tax position for the same income year (apart from this Subdivision).

 (4) Then compare each *component of the 2 positions. If the amount of that component of the actual *tax position is higher than the amount of that component of the *hypothetical tax position, the difference between the 2 amounts is a tax detriment that you get from the *scheme.

Example: In the fact situation in the example in section 45610, X Pty Ltd gets a tax detriment from the scheme for the annual instalment component of its tax position for the income year.

Note 1: The difference between the 2 amounts is not a tax detriment to the extent that it is attributable to certain things for which the income tax law expressly provides. See section 45635.

Note 2: An entity may get 2 or more tax detriments from the same scheme. One reason is that the scheme may affect 2 or more components of the entity’s tax position for an income year. Another reason is that the scheme may affect the tax position for 2 or more income years.

45635  No tax benefit or detriment results from choice for which income tax law expressly provides

Choice under the income tax law generally

 (1) The difference between the 2 amounts referred to in subsection 45605(4) or 45630(4) is not a *tax benefit or *tax detriment if there would have been no difference between the 2 amounts but for one or more matters covered by subsection (3).

 (2) The difference between the 2 amounts is not a *tax benefit or *tax detriment to the extent that the difference between the 2 amounts would have been less but for one or more matters covered by subsection (3).

 (3) This subsection covers:

 (a) an entity making an agreement, choice, declaration, election or selection; or

 (b) an entity giving a notice or exercising an option;

for which this Act expressly provides. However, this subsection does not cover an entity doing such a thing under:

 (c) Subdivision 126B (about CGT rollovers involving certain companies in the same whollyowned group) of the Income Tax Assessment Act 1997; or

 (d) Subdivision 170B of that Act (about transferring a net capital loss between certain companies in the same whollyowned group).

Matters excluded in applying subsection (1) or (2)

 (4) Subsection (1) or (2) does not apply to a matter covered by subsection (3) if an entity entered into or carried out the *scheme (or part of it) for the sole or dominant purpose of creating a circumstance or state of affairs whose existence is necessary for the entity referred to in subsection (3):

 (a) to make the agreement, choice, declaration, election or selection; or

 (b) to give the notice or exercise the option.

Choice under some CGT provisions

 (5) The difference between the 2 amounts is not a *tax benefit or *tax detriment if:

 (a) there would have been no difference between the 2 amounts but for one or more matters covered by subsection (7); and

 (b) the *scheme consisted wholly of that matter or those matters.

 (6) Also, the difference between the 2 amounts is not a *tax benefit or *tax detriment to the extent that the difference between the 2 amounts would have been less but for one or more matters covered by subsection (7), but only if the *scheme consisted wholly of that matter or those matters.

 (7) This subsection covers:

 (a) a choice made under Subdivision 126B (about CGT rollovers involving certain companies in the same whollyowned group) of the Income Tax Assessment Act 1997; or

 (b) an agreement made under Subdivision 170B of that Act (about transferring a net capital loss between certain companies in the same whollyowned group);

45640  Commissioner may remit general interest charge in special cases

 (1) The Commissioner may, if he or she is satisfied that because special circumstances exist it would be fair and reasonable to do so, remit the whole or any part of any *general interest charge payable under section 45620.

 (2) If the Commissioner does so, section 45625 (about credits for tax detriments from schemes) applies, and is taken always to have applied, as if the remitted amount had never been payable.

Subdivision 45QGeneral rules for consolidated groups

Guide to Subdivision 45Q

45700  What this Subdivision is about

This Subdivision allows the members of a consolidated group to be treated as a single entity for the purposes of Pay as you go (PAYG) instalments. Generally, the head company of the group is the entity liable to pay PAYG instalments.

The PAYG instalments provisions in this Part apply to the head company in much the same way as they apply to any other company. However, the operation of some of these provisions is modified by this Subdivision.

This Subdivision also contains special rules to deal with changes in the membership of the group.

Note 1: Subdivision 45R contains special rules that apply to members of a consolidated group before they are treated as a single entity for the purposes of this Part. It also contains special rules that affect the operation of this Subdivision (see sections 45880 and 45885).

Note 2: Subdivision 45S extends the operation of this Subdivision so that it can apply to members of a MEC group. It contains modifications of this Subdivision for the purposes of that extended operation.

Table of sections

Application of Subdivision

45703 Effect of this Subdivision and Subdivision 45R in relation to monthly payers

45705 Application of Subdivision to head company

Usual operation of this Part for consolidated group members

45710 Single entity rule

45715 When instalments are due—modification of section 4561

45720 Head company cannot be an annual payer—modification of section 45140

Membership changes

45740 Change of head company

45755 Entry rule (for an entity that becomes a subsidiary member of a consolidated group)

45760 Exit rule (for an entity that ceases to be a subsidiary member of a consolidated group)

45775 Commissioner’s power to work out different instalment rate or GDPadjusted notional tax

Application of Subdivision

45703  Effect of this Subdivision and Subdivision 45R in relation to monthly payers

 (1) If:

 (a) a company is the *head company of a *consolidated group; and

 (b) the company is a *monthly payer;

this Subdivision and Subdivision 45R have effect in relation to the company as the head company of the group in respect of an *instalment month in the same way in which they have effect in relation to a company that is a *quarterly payer as the head company of a consolidated group in respect of an *instalment quarter.

 (2) If:

 (a) an entity is a *subsidiary member of a *consolidated group; and

 (b) the entity is a *monthly payer;

this Subdivision and Subdivision 45R have effect in relation to the entity in respect of an *instalment month in the same way in which they have effect in relation to an entity that is a *quarterly payer in respect of an *instalment quarter.

 (3) However, those effects are subject to any modifications set out in those Subdivisions.

Note: Subdivision 45S can also have effect in relation to a monthly payer because of the operation of this section and section 45910.

45705  Application of Subdivision to head company

Period during which Subdivision applies to head company

 (1) Subject to sections 45880 and 45885, this Subdivision applies to a company as the *head company of a *consolidated group during the period:

 (a) starting at the start of the *instalment quarter of the company determined under subsection (2), (3) or (4); and

 (b) ending:

 (i) at the end of the instalment quarter of the company determined under paragraph (5)(a) or (b); or

 (ii) just before the instalment quarter of the company determined under paragraph (5)(c) or (d).

When the period begins—initial head company instalment rate

 (2) This Subdivision starts to apply to a company as the *head company of a *consolidated group at the start of an *instalment quarter under this subsection if, during that quarter, the Commissioner gives the company (as that head company) the *initial head company instalment rate.

Note: The operation of this subsection may be affected by section 45885.

When the period begins—group created from MEC group

 (3) This Subdivision starts to apply to a company as the *head company of a *consolidated group at the start of an *instalment quarter (the starting quarter) under this subsection if all of the following conditions are satisfied:

 (a) the consolidated group is *created from a *MEC group during the starting quarter;

 (b) the company is the head company of the consolidated group when the consolidated group is created from the MEC group;

 (c) either of the following applies:

 (i) this Subdivision applied, in accordance with Subdivision 45S, to the *provisional head company of the MEC group at the end of the previous instalment quarter;

 (ii) the Commissioner gives the *initial head company instalment rate to the provisional head company of the MEC group during the starting quarter.

Note: For the application of this Subdivision to a provisional head company of a MEC group: see section 45915.

When the period begins—new head company

 (4) This Subdivision starts to apply to a company as the *head company of a *consolidated group at the start of an *instalment quarter (the starting quarter) under this subsection if all of the following conditions are satisfied:

 (a) the company is an interposed company mentioned in subsection 61530(2) of the Income Tax Assessment Act 1997;

 (b) the company chooses under that subsection that the consolidated group is to continue in existence at and after the completion time mentioned in that subsection;

 (c) the completion time occurs during the starting quarter;

 (d) one of the following subparagraphs applies:

 (i) this Subdivision applied to the original entity mentioned in that subsection (as the head company of the consolidated group) at the end of the previous instalment quarter;

 (ii) the Commissioner gives the *initial head company instalment rate to the original entity mentioned in that subsection (as the head company of the consolidated group) during the starting quarter;

 (iii) the consolidated group is *created from a *MEC group during the starting quarter and this Subdivision applied to the *provisional head company of the MEC group at the end of the previous instalment quarter;

 (iv) the consolidated group is created from a MEC group during the starting quarter and the Commissioner gives the initial head company instalment rate to the provisional head company of the MEC group during the starting quarter.

When the period begins—modified timing for head company that is monthly payer

 (4A) Subsection (4B) applies if:

 (a) apart from subsection (4B), this Subdivision starts to apply to a company as the *head company of a *consolidated group at a particular time because of the operation of subsection (2), (3) or (4); and

 (b) the company is a *monthly payer; and

 (c) the Commissioner gave the *initial head company instalment rate as mentioned in subsection (2), subparagraph (3)(c)(ii), subparagraph (4)(d)(ii) or subparagraph (4)(d)(iv) in an *instalment month.

 (4B) Treat subsection (2), (3) or (4) (as the case requires) as providing that this Subdivision starts to apply to the company as the *head company of the group at the start of the next *instalment month.

Note: For the application of this Subdivision to a monthly payer, see section 45703.

When the period ends

 (5) This Subdivision stops applying to a company as the *head company of a *consolidated group at the earliest of the following times after the company becomes the head company:

 (a) the end of the *instalment quarter during which the consolidated group ceases to exist (other than because a *MEC group is *created from the consolidated group);

 (b) the end of the instalment quarter during which the Commissioner is notified of the creation of a MEC group from the consolidated group if the MEC group is created during that instalment quarter;

 (c) just before the instalment quarter during which the Commissioner is notified of the creation of a MEC group from the consolidated group if the MEC group was created before that instalment quarter;

 (d) just before the instalment quarter that includes the completion time mentioned in subsection 61530(2) of the Income Tax Assessment Act 1997 where an interposed company mentioned in that subsection chooses under that subsection that the consolidated group is to continue in existence.

Note: The operation of this subsection because of paragraph (a) may be affected by section 45880.

 (6) For the purposes of subsection (5), the Commissioner is notified of the creation of a *MEC group from a *consolidated group when the Commissioner receives a notice of the consolidation of the MEC group under subsection 71940(1) of the Income Tax Assessment Act 1997.

 (7) If this Subdivision stops applying to a company as the *head company of a *consolidated group just before an *instalment quarter under paragraph (5)(c), then, for the purposes of this Part, this Act has effect for the company and other *members of the group as if:

 (a) the consolidated group had continued to exist until just before the start of that quarter; and

 (b) the company were the head company of the group until just before the start of that quarter.

 (8) To avoid doubt, this Subdivision does not apply to a company as the *head company of a *consolidated group for any time at all if:

 (a) subsection (2), (3) or (4), and subsection (5), would, apart from this subsection, apply to the company; but

 (b) the time at which this Subdivision would stop applying to the company under subsection (5) is before the time at which this Subdivision would start to apply to the company under subsection (2), (3) or (4).

 (9) To avoid doubt, and apart from the operation of subsection (7), this Subdivision may apply to a company as the *head company of a *consolidated group at a time when the company is not in fact the head company of the group.

Note: An example of this is when an interposed company becomes the new head company of a consolidated group. Under this section and section 45740, this Subdivision may start applying to the company as if it had already become the head company when it is not yet such a company.

Usual operation of this Part for consolidated group members

45710  Single entity rule

  If an entity is a *subsidiary member of a *consolidated group for any period during which this Subdivision applies to the *head company of the group:

 (a) that entity; and

 (b) any other subsidiary member of the group;

are taken for the purposes of this Part to be parts of that head company (rather than separate entities) during that period.

Note: That means, amongst other things, the head company would be liable to pay instalments for that period as if the subsidiary members were parts of the head company.

45715  When instalments are due—modification of section 4561

 (1) If:

 (a) the *head company of a *consolidated group is liable to pay an instalment for an *instalment quarter; and

 (b) this Subdivision applies to the head company during that quarter;

then, despite subsection 4561(2), the instalment is due on or before the 21st day of the month after the end of that quarter whether or not the head company is a *deferred BAS payer on that day.

 (2) Subsection (3) applies if section 45703 applies to the *head company of the *consolidated group (because it is a *monthly payer).

 (3) Treat the reference in subsection (1) to subsection 4561(2) as instead being a reference to subsection 4567(2).

45720  Head company cannot be an annual payer—modification of section 45140

  Despite any other provisions in this Part, the *head company of a *consolidated group cannot choose to be an *annual payer under section 45140 while this Subdivision applies to the head company.

Note: You stop being an annual payer when this Subdivision starts applying to you as the head company of a consolidated group: see section 45160.

Membership changes

45740  Change of head company

Object

 (1) The object of this section (except subsection (8)) is to ensure that, for the purposes of this Part, when a company becomes the new *head company of a *consolidated group:

 (a) the company inherits the history of the former head company of the group; and

 (b) the history of the new head company is effectively ignored.

 (2) This section applies to a *head company of a *consolidated group if:

 (a) the company is an interposed company mentioned in subsection 45705(4) (an interposed company that chooses under subsection 61530(2) of the Income Tax Assessment Act 1997 that the consolidated group is to continue in existence at and after the completion time mentioned in that subsection); and

 (b) the conditions in subsection 45705(4) are satisfied in relation to the interposed company (whether or not this Subdivision applies to the company as the head company of the group for any period of time).

 (3) Everything that happened before the completion time in relation to the company (the original company) that was the *head company of the *consolidated group immediately before the completion time:

 (a) is taken to have happened in relation to the interposed company instead of in relation to the original company; and

 (b) is taken to have happened in relation to the interposed company instead of what would (apart from this section) be taken to have happened in relation to the interposed company before the completion time;

just as if, at all times before the completion time:

 (c) the interposed company had been the original company; and

 (d) the original company had been the interposed company.

 (4) To avoid doubt, subsection (3) also covers everything that, immediately before the completion time, was taken to have happened in relation to the original company because of:

 (a) section 7011 of the Income Tax Assessment Act 1997 (single entity rule); or

 (b) section 7015 of that Act (entry history rule); or

 (c) section 70375 of that Act (effects of an interposed company becoming the *head company of a *consolidated group); or

 (d) section 71990 of that Act (effects of a change of head company of a *MEC group); or

 (e) section 45710 in this Schedule (single entity rule for the purposes of this Part), including an application of that section under Subdivision 45S in this Schedule; or

 (f) this section; or

 (g) section 45920 in this Schedule (effects of a change of *provisional head company of a MEC group for the purposes of this Part); or

 (h) one or more previous applications of any of the provisions covered by paragraphs (a) to (g).

 (5) In addition, and without affecting subsection (3):

 (a) an assessment of the original company for an income year that ends before the income year that includes the completion time; or

 (b) an amendment of the assessment;

is taken to be something that had happened to the interposed company, whether or not the assessment or amendment is made before the completion time.

 (6) This section has effect for the purposes of applying this Part to *members of the *consolidated group in relation to an *instalment quarter of the interposed company that ends after the completion time.

Note: An assessment mentioned in subsection (5) may therefore be taken to be the base assessment of the interposed company for the purposes of this Part.

 (7) Subsections (1) to (6) are to be disregarded in applying section 45705 (about the application of this Subdivision to a company as the *head company of a *consolidated group).

Note: For example, if the Commissioner has given an initial head company instalment rate to the original company during an earlier instalment quarter, the rate is not, despite this section, treated as if it had been given to the interposed company for the purposes of section 45705. Subject to the other provisions in that section, this Subdivision therefore starts applying to the interposed company under subsection 45705(4).

Special rule for the original company

 (8) A provision of this Part that applies on an entity becoming a *subsidiary member of a *consolidated group does not apply to the original company when it is taken to have become such a member at the completion time as a result of section 70370 of the Income Tax Assessment Act 1997.

Note: Section 45755 (the entry rule) therefore does not apply to the original company on the company becoming a subsidiary member of the consolidated group.

45755  Entry rule (for an entity that becomes a subsidiary member of a consolidated group)

 (1) Despite any other provisions in this Part, an entity is liable to pay an instalment for an *instalment quarter or income year (as appropriate) during which the entity becomes a *subsidiary member of a *consolidated group if:

 (a) this Subdivision applies to the *head company of the group at any time during that quarter or year (as appropriate); and

 (b) the entity would otherwise be liable to pay an instalment for that quarter or year (as appropriate) if it had not become a subsidiary member of the group; and

 (c) the entity becomes a subsidiary member of the group on a day other than the first day of that quarter or the first day of that year (as appropriate).

Note: Under paragraph (b), this section could apply to an entity that, at the time of becoming a subsidiary member of the group, was not a subsidiary member of another consolidated group, or was a member of another consolidated group but this Subdivision did not apply to the head company of that other group at that time.

Modifications for a quarterly payer who pays 4 instalments annually on the basis of GDPadjusted notional tax

 (2) Subsections (3) and (4) apply to the entity if:

 (a) the entity would have been a *quarterly payer who pays 4 instalments annually on the basis of GDPadjusted notional tax at the end of the *instalment quarter mentioned in subsection (1) if it had not become a *subsidiary member of the group; and

 (b) the amount of the instalment payable by the entity for that quarter would have been worked out under paragraph 45112(1)(b); and

 (c) that quarter is not the fourth instalment quarter in an income year.

 (3) For the purposes of working out the amount of the instalment payable by the entity for that *instalment quarter, subsection 45410(5) applies to the entity as if that quarter were the fourth instalment quarter in the income year for which the entity is liable to pay an instalment.

 (4) For the purposes of working out the *acceptable amount of the entity’s instalment for that instalment quarter, subsection 45232(3) applies to the entity as if that quarter were the fourth instalment quarter in the income year for which the entity is liable to pay an instalment.

45760  Exit rule (for an entity that ceases to be a subsidiary member of a consolidated group)

 (1) This section applies to an entity if all of the following conditions are satisfied:

 (a) the entity ceases to be a *subsidiary member of a *consolidated group during an *instalment quarter of the *head company of the group;

 (b) this Subdivision applies to the head company of the group during that instalment quarter;

 (c) the entity does not, at the time it ceases to be a subsidiary member of the group, become:

 (i) a subsidiary member of another consolidated group the head company of which is one to which this Subdivision applies at that time; or

 (ii) a member (other than the *provisional head company) of a *MEC group the provisional head company of which is one to which this Subdivision applies, in accordance with Subdivision 45S, at that time;

 (d) this Part applies to the entity under section 4510.

 (2) This Part applies to the entity as if:

 (a) the Commissioner had given the entity an instalment rate equal to the most recent instalment rate given to the *head company mentioned in paragraph (1)(a) before the end of the *instalment quarter mentioned in that paragraph; and

 (b) the entity were a *quarterly payer who pays on the basis of instalment income at the end of that instalment quarter, and of each subsequent instalment quarter, until:

 (i) if the Commissioner first gives the entity an instalment rate worked out on the basis of the *base assessment covered by subsection (3) during the first instalment quarter of an income year—immediately before the end of that first instalment quarter; or

 (ii) if that rate is given to the entity during any other instalment quarter of an income year—immediately after the end of the last instalment quarter of that year.

 (3) This section only covers the first *base assessment of the entity for an income year that is, or includes, a period after the entity ceases to be a *subsidiary member of the group.

45775  Commissioner’s power to work out different instalment rate or GDPadjusted notional tax

 (1) This section applies if any of the following changes (the membership change) occurs in relation to a *consolidated group while this Subdivision applies to the *head company of the group:

 (a) an entity becomes a *subsidiary member of the group or a number of entities become subsidiary members of the group;

 (b) an entity ceases to be a subsidiary member of the group or a number of entities cease to be subsidiary members of the group.

 (2) If the Commissioner, having regard to the object of this Part and the membership change, is of the opinion that it would be reasonable to do so, the Commissioner may work out:

 (a) an instalment rate that is higher, or lower, than the most recent instalment rate given by the Commissioner to the *head company under section 4515; or

 (b) an amount of *GDPadjusted notional tax that is higher, or lower, than the amount of GDPadjusted notional tax worked out for the purposes of the most recent amount of instalment notified by the Commissioner to the head company under paragraph 45112(1)(a).

 (3) The new instalment rate or amount of *GDPadjusted notional tax must be a rate or amount that, in the opinion of the Commissioner, is reasonable having regard to the object of this Part and the membership change.

Note 1: Subdivision 45J does not apply for the purpose of working out an instalment rate under this section.

Note 2: Section 45405 does not apply for the purpose of working out an amount of GDPadjusted notional tax under this section.

Additional applications of subsection (2)

 (4) If, after exercising the power in relation to the membership change under subsection (2) for the first time, and on the basis of an assessment (including an amendment) of the *head company for the income year in which the change occurs, or for an earlier year, the Commissioner has worked out:

 (a) another instalment rate under section 45320 for the company (whether or not the Commissioner has given that rate to the company); or

 (b) another amount of *GDPadjusted notional tax under section 45405 for the company (whether or not the Commissioner has notified the company an amount of instalment based on that other amount);

the Commissioner may again exercise the power under subsection (2) in relation to the membership change, as if:

 (c) the rate mentioned in paragraph (a) were the most recent instalment rate mentioned in paragraph (2)(a); and

 (d) the amount of GDPadjusted notional tax mentioned in paragraph (b) were the amount of GDPadjusted notional tax worked out for the purposes of the most recent amount of instalment that is mentioned in paragraph (2)(b).

 (5) To avoid doubt, in relation to the membership change, the Commissioner:

 (a) may exercise the power under subsection (2) by applying subsection (4) more than once; but

 (b) must not exercise that power more than once in relation to a particular instalment rate mentioned in paragraph (4)(a) or a particular amount of *GDPadjusted notional tax mentioned in paragraph (4)(b).

Subdivision 45RSpecial rules for consolidated groups

Guide to Subdivision 45R

45850  What this Subdivision is about

This Subdivision deals with the application of this Part to members of a consolidated group after the group has come into existence but before the members are treated as a single entity for the purposes of this Part.

This Subdivision also contains special rules in relation to the application of Subdivision 45Q to members of a consolidated group in these circumstances:

 (a) a group whose members were treated as a single entity under that Subdivision (a mature group) is acquired by another group (see section 45880); or

 (b) a member of a mature group ceases to be such a member and becomes the head company of a new group (see section 45885).

Note: Subdivision 45S extends the operation of this Subdivision so that it can apply to members of a MEC group. It contains modifications of this Subdivision for the purposes of that extended operation.

Table of sections

Operative provisions

45855 Section 7011 disregarded for certain purposes

45860 Member having a different instalment period

45865 Credit rule

45870 Head company’s liability to GIC on shortfall in quarterly instalment

45875 Other rules about the general interest charge

45880 Continued application of Subdivision 45Q to the head company of an acquired group

45885 Early application of Subdivision 45Q to the head company of a new group

Operative provisions

45855  Section 7011 disregarded for certain purposes

  If:

 (a) an amount is required to be worked out for the purpose of determining the *instalment income of an entity that is a *member of a *consolidated group for a period that is all or a part of a *consolidation transitional year for the entity; and

 (b) the period ends before Subdivision 45Q starts to apply, because of subsection 45705(2) or subparagraph 45705(3)(c)(ii), (4)(d)(ii) or (iv), to the *head company of the group;

that amount must be worked out without regard to any application of section 7011 of the Income Tax Assessment Act 1997 to the entity in relation to the period.

45860  Member having a different instalment period

Different instalment period—instalment quarter

 (1) If:

 (a) but for Subdivision 45Q, a *subsidiary member of a *consolidated group would be liable to pay an instalment for an *instalment quarter of the subsidiary member that includes the starting time; and

 (b) that quarter starts before the start of the instalment quarter of the *head company of the group that includes the starting time;

then, despite section 45710, the subsidiary member is liable to pay an instalment for that quarter.

Different instalment period—income year

 (2) If:

 (a) but for Subdivision 45Q, a *subsidiary member of a *consolidated group would be liable to pay an annual instalment for an income year of the subsidiary member that includes the starting time; and

 (b) that year ends before the end of the income year of the *head company of the group that includes the starting time;

then, despite section 45710, the subsidiary member is liable to pay an instalment for that year.

Assumptions for working out amount of instalment

 (3) The amount of the instalment must be worked out on the following assumptions:

 (a) that the *instalment quarter or income year of the *subsidiary member (as appropriate) consists only of the period that is the part of the quarter or year occurring before the starting time;

 (b) that an amount required to be worked out for the purpose of determining the *instalment income of the subsidiary member for that period is worked out under section 45855.

 (4) For the purposes of this section, the starting time is the time at which Subdivision 45Q starts to apply to the *head company of the group because of subsection 45705(2) or subparagraph 45705(3)(c)(ii), (4)(d)(ii) or (iv).

45865  Credit rule

 (1) When the Commissioner makes an assessment:

 (a) of the income tax that the *head company of a *consolidated group is liable to pay for a *consolidation transitional year for the head company; or

 (b) that no income tax is payable by the head company for that year;

the head company is, in addition to any credit to which it is entitled under section 4530 for that year, entitled to a credit in relation to instalments payable by an entity that is a *subsidiary member of the group at any time during that year.

 (2) The credit is equal to:

 (a) the sum of so much of each instalment payable by the entity (even if it has not paid it) for an *instalment quarter of a *consolidation transitional year for the entity, or for that year, as is reasonably attributable to so much of that quarter or year:

 (i) which is, or is included in, the consolidation transitional year for the *head company; and

 (ii) during which the entity is a *subsidiary member of the group;

  minus

 (b) the sum of so much of each credit that the entity has claimed under section 45215 or 45420 for each instalment quarter covered by paragraph (a) as is reasonably attributable to:

 (i) for a credit under section 45215—so much of the preceding instalment quarters of that consolidation transitional year for the entity which is covered by subparagraphs (a)(i) and (ii); or

 (ii) for a credit under section 45420—so much of that instalment quarter and the preceding instalment quarters of that consolidation transitional year for the entity which is covered by subparagraphs (a)(i) and (ii).

 (3) To avoid doubt, if:

 (a) during the *instalment quarter or the *consolidation transitional year mentioned in paragraph (2)(a), the entity is a *subsidiary member of:

 (i) 2 or more *consolidated groups; or

 (ii) one or more consolidated groups and one or more *MEC groups; and

 (b) an amount is taken into account under that paragraph or paragraph (2)(b) in working out the credit to which the *head company of one of the groups is entitled under subsection (1);

that amount is not to be taken into account in working out the credit to which the head company of another of those groups is entitled under that subsection.

 (4) A reference in subsection (3) to subsection (1) or paragraph (2)(a) or (b) includes a reference to that provision in its extended operation in relation to a *MEC group under Subdivision 45S.

Note: This section applies to members of a MEC group with the modifications set out in section 45930.

45870  Head company’s liability to GIC on shortfall in quarterly instalment

Liability for the general interest charge

 (1) Subject to subsections (3) and (4), the *head company of a *consolidated group is liable to pay the *general interest charge under this section for an *instalment quarter in a *consolidation transitional year for the head company if:

 (a) the instalment payable by at least one *member of the group for that quarter is worked out:

 (i) under paragraph 45112(1)(b) or (c); or

 (ii) by using an instalment rate under section 45205; and

 (b) the sum of instalments payable by the members of the group for that quarter, reduced by credits claimed by those members under section 45215 or 45420 for that quarter, is less than 17/80 of the head company’s *benchmark tax for that consolidation transitional year.

Note: 17/80 of the head company’s benchmark tax represents an amount that is 85% of one quarter of that benchmark tax.

Amount on which the charge is payable

 (2) Subject to subsections (3) and (4), the *general interest charge is payable on the amount worked out in accordance with the following method statement (if the amount is a positive amount).

Method statement

Step 1. Work out the amount that is 1/4 of the *benchmark tax of the *head company for that *consolidation transitional year of that head company.

Step 2. Work out the sum of instalments that would have been payable by all the *members of the group for that *instalment quarter of that *head company if none of the members had worked out its instalment for that quarter under paragraph 45112(1)(b) or (c) or by using an instalment rate under section 45205.

Step 3. Work out the sum of instalments payable by all the *members of the group for that *instalment quarter, reduced by credits claimed by the members under section 45215 or 45420 for that quarter.

Step 4. Reduce the lesser of the results of steps 1 and 2 by the result of step 3. The result of this step is the amount on which the *general interest charge is payable if it is a positive amount. No general interest charge is payable if the result of this step is nil or a negative amount.

Amounts of instalments or credits that are taken into account

 (3) In working out an amount of instalment or credit for a *subsidiary member of the group for the purposes of any of the following provisions:

 (a) paragraph (1)(b);

 (b) step 2 or 3 of the method statement;

take into account only an amount of instalment or credit covered by that provision that is reasonably attributable to a period in that *consolidation transitional year of the *head company during which it is a subsidiary member of the group.

Members having different instalment quarters

 (4) In working out an amount of instalment or credit for a *subsidiary member whose *instalment quarters differ from those of the *head company for the purposes of any of the following provisions:

 (a) paragraph (1)(a) or (b);

 (b) step 2 or 3 of the method statement;

a reference to an instalment quarter in a *consolidation transitional year of the head company in any of those provisions includes a reference to the last instalment quarter of that subsidiary member ending before the end of that instalment quarter of the head company.

 (5) Subsections (6) and (7) apply if:

 (a) the *head company of the *consolidated group is a *monthly payer at a time in an *instalment month (the current month); and

 (b) any of the other *members of the group (the subsidiary quarterly payers) are *quarterly payers at a time in the *instalment quarter (the current quarter) in which the current month starts.

 (6) Apply the following rules:

 (a) treat the reference in subsection (1) to an *instalment quarter as being a reference to the current month;

 (b) treat the references in this section to that quarter (or that instalment quarter) as being references to the current month.

 (7) Also apply the following rules, for the purposes of subsections (1) to (5):

 (a) treat the subsidiary quarterly payers as *monthly payers for each *instalment month (a notional instalment month) that starts (disregarding paragraph (6)(a)) in the current quarter;

 (b) apply this section separately in relation to each of those notional instalment months;

 (c) treat the amount of instalment or credit for a subsidiary quarterly payer in respect of a notional instalment month as being the extent to which the amount of instalment or credit for the subsidiary quarterly payer for the current quarter is attributable to that notional instalment month.

45875  Other rules about the general interest charge

 (1) The *general interest charge under section 45870 for an *instalment quarter in an income year is payable by the *head company for each day in the period that:

 (a) started at the beginning of the day by which the instalment for that quarter was due to be paid; and

 (b) finishes at the end of the day on which the head company’s assessed tax for that income year is due to be paid.

 (2) The Commissioner must give the *head company written notice of the *general interest charge. The head company must pay the charge within 14 days after the notice is given to the head company.

 (3) If any of the *general interest charge remains unpaid at the end of the 14 days, the *head company is also liable to pay the general interest charge on the unpaid amount for each day in the period that:

 (a) starts at the end of those 14 days; and

 (b) finishes at the end of the last day on which, at the end of the day, any of the following remains unpaid:

 (i) the unpaid amount;

 (ii) general interest charge on the unpaid amount.

 (4) The Commissioner may, if he or she is satisfied that because special circumstances exist it would be fair and reasonable to do so, remit the whole or any part of any *general interest charge payable under section 45870.

45880  Continued application of Subdivision 45Q to the head company of an acquired group

 (1) This section applies to a company for which all of the following conditions are satisfied in relation to a particular time (the takeover time):

 (a) just before the takeover time, Subdivision 45Q applied to the company as the *head company of a *consolidated group;

 (b) at the takeover time, the company becomes a *whollyowned subsidiary of a *member of another consolidated group or *MEC group;

 (c) that other group is consolidated at or before the takeover time under section 70350 or 71950 of the Income Tax Assessment Act 1997;

 (d) the Commissioner receives the choice (or notice) under that section for the consolidation of that other group not later than 28 days after the takeover time, or within such further period (if any) as the Commissioner allows;

 (e) at the takeover time, Subdivision 45Q (including that Subdivision as applied under Subdivision 45S) does not apply to the head company or the *provisional head company of that other group.

 (2) For the purposes of this Part only, this Act has effect in relation to the company and the other *members of the *consolidated group mentioned in paragraph (1)(a) (the preserved group) as if, during the period covered by subsection (5):

 (a) the preserved group had continued to exist as a consolidated group; and

 (b) the company were still the *head company of the preserved group; and

 (c) Subdivision 45Q had continued to apply to the company as the head company of the preserved group; and

 (d) an entity, while being a *subsidiary member of the preserved group, were not treated as a member of the group mentioned in paragraph (1)(b) (the new group).

 (3) Subsection (2) does not stop the company from being a member of the new group for the purposes of this Part during the period covered by subsection (5).

Note: This means, for example, sections 45855 and 45860 apply to the head company as a member of the new group.

 (4) However, for the purposes of applying section 45855 to the company, a reference in that section to an application of section 7011 of the Income Tax Assessment Act 1997 to the company in relation to the period mentioned in section 45855 is taken to be:

 (a) a reference only to an application of section 7011 of that Act to the company as a member of the new group during that period; and

 (b) not a reference to an application (because of subsection (2) of this section) of section 7011 of that Act to the company as the *head company of the preserved group during that period.

 (5) This subsection covers the period that starts from the start of the *instalment quarter of the company that includes the takeover time and ends at the earlier of the following times:

 (a) the end of the instalment quarter of the company during which the company ceases to be a member of the new group;

 (b) just before the instalment quarter of the company during which the Commissioner gives the *initial head company instalment rate to the *head company, or the *provisional head company, of the new group.

 (6) The Commissioner may, on the application of the company made not later than 28 days after the takeover time, allow such extension of time for the purposes of paragraph (1)(d) as he or she considers appropriate.

 (7) To avoid doubt, nothing in this section prevents the operation of section 45755 or 45760 to *members of the preserved group while it continues to exist under subsection (2).

45885  Early application of Subdivision 45Q to the head company of a new group

 (1) This section applies to a company for which all of the following conditions are satisfied in relation to a particular time (the starting time):

 (a) just before the starting time, the company was a *subsidiary member of a *consolidated group, or a member of a *MEC group;

 (b) just before the starting time, the consolidated group or MEC group was a mature group (see subsection (4));

 (c) at the starting time, either of the following applies:

 (i) the company ceases to be a subsidiary member of the consolidated group, or a member of the MEC group;

 (ii) the group ceases to exist (otherwise than because a MEC group or consolidated group is *created from the group, or because its *head company or *provisional head company becomes a *whollyowned subsidiary of a member of another mature group);

 (d) at the starting time, the company is the head company of another consolidated group;

 (e) within 28 days after the starting time, or within such further period (if any) as the Commissioner allows, the Commissioner receives the notice under section 70358 of the Income Tax Assessment Act 1997 in relation to the choice to consolidate, at and after the starting time, that other consolidated group under section 70350 of the Income Tax Assessment Act 1997.

 (2) For the purposes of this Part:

 (a) the instalment rate that the Commissioner is taken to have given to the company under paragraph 45760(2)(a) has effect as if it were the *initial head company instalment rate for the company as the *head company of the *consolidated group mentioned in paragraph (1)(d); and

 (b) an instalment rate that would otherwise be the initial head company instalment rate for the company as the head company of that consolidated group is not to be treated as that initial head company instalment rate.

Note: This means, subject to the provisions in section 45705, Subdivision 45Q starts applying to the company as the head company of the consolidated group at the start of the instalment quarter that includes the starting time: see subsection (2) of that section and paragraph 45760(2)(a).

 (3) The Commissioner may, on the application of the company made within 28 days after the starting time, allow such extension of time for the purposes of paragraph (1)(e) as he or she considers appropriate.

Mature group

 (4) For the purposes of this section, a *consolidated group or a *MEC group is a mature group at a particular time if:

 (a) for a consolidated group—Subdivision 45Q applies to its *head company at that time; or

 (b) for a MEC group—Subdivision 45Q, as applied under Subdivision 45S, applies to its *provisional head company at that time.

Subdivision 45SMEC groups

Guide to Subdivision 45S

45900  What this Subdivision is about

This Subdivision sets out how this Part applies in relation to MEC groups and their members.

Table of sections

Preliminary

45905 Objects of Subdivision

General modification rules

45910 Extended operation of Part to cover MEC groups

Extended operation of Subdivision 45Q

45913 Sections 45705 and 45740 do not apply to members of MEC groups

45915 Application of Subdivision 45Q to provisional head company

45917 Assumption for applying section 45710 (single entity rule)

45920 Change of provisional head company

45922 Life insurance company

Extended operation of Subdivision 45R

45925 Additional modifications of sections 45855 and 45860

45930 Modifications of sections 45865 and 45870 and a related provision

45935 Additional modifications of section 45885

Preliminary

45905  Objects of Subdivision

  The objects of this Subdivision are to:

 (a) extend the operation of this Part (except sections 45705 and 45740 and this Subdivision) so that it can apply in relation to *MEC groups and their members; and

 (b) modify the rules in this Part for that extended operation so that they take account of the special characteristics of MEC groups.

General modification rules

45910  Extended operation of Part to cover MEC groups

 (1) This Part (except sections 45705 and 45740 and this Subdivision) has effect in relation to members of a *MEC group in the same way in which it has effect in relation to *members of a *consolidated group.

 (2) However, that effect is subject to the modifications set out in the following table and elsewhere in this Subdivision.

 

Modifications of this Part

Item

A reference in this Part to:

Is taken to be a reference to:

1

a *consolidated group

a *MEC group

2

the *head company of a *consolidated group

the *provisional head company of a *MEC group

3

a *subsidiary member of a *consolidated group

a member (other than the *provisional head company) of a *MEC group

Exceptions

 (3) The modifications set out in the table do not apply to the following provisions:

 (a) this Subdivision;

 (b) subsection 4530(4) (see section 45930);

 (d) note 2 at the end of section 45700;

 (e) sections 45705 and 45740 (see sections 45913, 45915 and 45920);

 (f) subparagraphs 45760(1)(c)(i) and (ii);

 (g) the note at the end of section 45850;

 (h) sections 45865 and 45870 (see section 45930);

 (i) paragraphs (1)(b), (c), (d) and (e), and subsection (5), of section 45880;

 (j) paragraphs (1)(a), (b) and (c), and subsection (4), of section 45885.

Note: The provisions covered by paragraphs (d), (f), (g), (i) and (j) apply to members of a MEC group without any modifications.

Extended operation of Subdivision 45Q

45913  Sections 45705 and 45740 do not apply to members of MEC groups

  In applying Subdivision 45Q to members of a *MEC group, the Subdivision has effect as if:

 (a) section 45705 had no effect and section 45915 had effect instead; and

 (b) section 45740 had no effect and section 45920 had effect instead.

45915  Application of Subdivision 45Q to provisional head company

Period during which Subdivision applies to provisional head company

 (1) Subject to sections 45880 and 45885 (as applied under this Subdivision), Subdivision 45Q applies to a company as the *provisional head company of a *MEC group during the period:

 (a) starting at the start of the *instalment quarter of the company determined under subsection (2), (3) or (4); and

 (b) ending:

 (i) at the end of the instalment quarter of the company determined under paragraph (6)(a) or (b); or

 (ii) just before the instalment quarter of the company determined under paragraph (6)(c).

Note: The application of Subdivision 45Q to the provisional head company is subject to the modifications set out in this section and elsewhere in this Subdivision.

When the period begins—initial head company instalment rate

 (2) Subdivision 45Q starts to apply to a company as the *provisional head company of a *MEC group at the start of an *instalment quarter under this subsection if, during that quarter, the Commissioner gives the company (as that provisional head company) the *initial head company instalment rate.

Note: The operation of this subsection may be affected by section 45885 (as applied under this Subdivision).

When the period begins—group created from consolidated group

 (3) Subdivision 45Q starts to apply to a company as the *provisional head company of a *MEC group at the start of an *instalment quarter (the starting quarter) under this subsection if all of the following conditions are satisfied:

 (a) during the starting quarter, the Commissioner is notified of the creation of the MEC group from a *consolidated group (see subsection (5));

 (b) the company is the provisional head company of the MEC group when the Commissioner is so notified;

 (c) either of the following applies:

 (i) Subdivision 45Q applied to the *head company of the consolidated group at the end of the previous instalment quarter;

 (ii) the Commissioner gives the *initial head company instalment rate to the head company of the consolidated group during the starting quarter.

Note: For the application of Subdivision 45Q to a head company of a consolidated group: see section 45705.

When the period begins—new provisional head company

 (4) Subdivision 45Q starts to apply to a company as the *provisional head company of a *MEC group at the start of an *instalment quarter (the starting quarter) under this subsection if both of the following conditions are satisfied:

 (a) the company is appointed as the provisional head company of the MEC group under subsection 71960(3) of the Income Tax Assessment Act 1997 during the starting quarter;

 (b) one of the following applies:

 (i) Subdivision 45Q applied to the former provisional head company of the MEC group at the end of the previous instalment quarter;

 (ii) the Commissioner gives the *initial head company instalment rate to the former provisional head company of the MEC group during the starting quarter;

 (iii) the Commissioner is notified during the starting quarter of the creation of the MEC group from a *consolidated group and Subdivision 45Q applied to the *head company of the consolidated group at the end of the previous instalment quarter;

 (iv) the Commissioner is notified during the starting quarter of the creation of the MEC group from a consolidated group and the Commissioner gives the initial head company instalment rate to the head company of the consolidated group during the starting quarter.

When the period begins—modified timing for provisional head company that is monthly payer

 (4A) Subsection (4B) applies if:

 (a) apart from subsection (4B), Subdivision 45Q starts to apply to a company as the *provisional head company of a *MEC group at a particular time because of the operation of subsection (2), (3) or (4); and

 (b) the company is a *monthly payer; and

 (c) the Commissioner gave the *initial head company instalment rate as mentioned in subsection (2), subparagraph (3)(c)(ii), subparagraph (4)(b)(ii) or subparagraph (4)(b)(iv) in an *instalment month.

 (4B) Treat subsection (2), (3) or (4) (as the case requires) as providing that Subdivision 45Q starts to apply to the company as the *provisional head company of the *MEC group at the start of the next *instalment month.

Note: For the application of this Subdivision to a monthly payer, see sections 45703 and 45910.

Notification of creation of MEC group from consolidated group

 (5) For the purposes of subsections (3) and (4), the Commissioner is notified of the creation of a *MEC group from a *consolidated group when the Commissioner receives a notice of the consolidation of the MEC group under subsection 71940(1) of the Income Tax Assessment Act 1997.

When the period ends

 (6) Subdivision 45Q stops applying to a company as the *provisional head company of a *MEC group at the earliest of the following times after the company becomes the provisional head company:

 (a) the end of the *instalment quarter during which the MEC group ceases to exist (other than because a *consolidated group is *created from the MEC group);

 (b) the end of the instalment quarter during which a consolidated group is created from the MEC group;

 (c) just before the instalment quarter during which another company is appointed as the provisional head company of the MEC group under subsection 71960(3) of the Income Tax Assessment Act 1997.

Note: The operation of this subsection because of paragraph (a) may be affected by section 45880 (as applied under this Subdivision).

 (7) To avoid doubt, Subdivision 45Q does not apply to a company as the *provisional head company of a *MEC group for any time at all if:

 (a) subsection (2), (3) or (4), and subsection (6), would, apart from this subsection, apply to the company; but

 (b) the time at which Subdivision 45Q would stop applying to the company under subsection (6) is before the time at which that Subdivision would start to apply to the company under subsection (2), (3) or (4).

 (8) To avoid doubt, Subdivision 45Q may apply to a company as the *provisional head company of a *MEC group at a time when the company is not in fact the provisional head company of the group.

Note: An example of this is when a company replaces another company as the provisional head company of a MEC group. Under this section and section 45920, Subdivision 45Q may start applying to the company as if it had already become the provisional head company when it is not yet such a company.

45917  Assumption for applying section 45710 (single entity rule)

  In applying section 45710 to members of a *MEC group at a particular time, the company that is the *provisional head company of the group at that time must be assumed to be the *head company of the group at all times during the period:

 (a) throughout which the group is in existence; and

 (b) that is all or a part of the income year of the company that includes that particular time.

45920  Change of provisional head company

Object

 (1) The object of this section (except subsection (9)) is to ensure that, for the purposes of this Part, when a company becomes the new *provisional head company of a *MEC group:

 (a) the company inherits the history of the former provisional head company; and

 (b) the history of the new provisional head company is effectively ignored.

 (2) This section applies to a *provisional head company of a *MEC group (the new provisional head company) that is appointed under subsection 71960(3) of the Income Tax Assessment Act 1997 if one of the following conditions is satisfied:

 (a) the conditions in subsection 45915(4) are satisfied in relation to the new provisional head company (whether or not Subdivision 45Q applies to the company as the provisional head company of the group for any period of time);

 (b) the new provisional head company is so appointed during the *instalment quarter of the company in which the MEC group is *created from a *consolidated group and either:

 (i) the Commissioner gives the *initial head company instalment rate to the *head company of the consolidated group during that instalment quarter; or

 (ii) Subdivision 45Q applied to the head company of the consolidated group at the end of the previous instalment quarter.

 (3) Everything that happened before the starting time in relation to the company (the former company) that was the *provisional head company of the *MEC group immediately before the starting time:

 (a) is taken to have happened in relation to the new provisional head company instead of in relation to the former company; and

 (b) is taken to have happened in relation to the new provisional head company instead of what would (apart from this section) be taken to have happened in relation to the new provisional head company before the starting time;

just as if, at all times before the starting time:

 (c) the new provisional head company had been the former company; and

 (d) the former company had been the new provisional head company.

 (4) For the purposes of this section, the starting time is the time at which the *cessation event happened to the former company (the event that results in the appointment of the new provisional head company).

 (5) To avoid doubt, subsection (3) also covers everything that, immediately before the starting time, was taken to have happened in relation to the former company because of:

 (a) section 7011 of the Income Tax Assessment Act 1997 (single entity rule); or

 (b) section 7015 of that Act (entry history rule); or

 (c) section 70375 of that Act (effects of an interposed company becoming the *head company of a *consolidated group); or

 (d) section 71990 of that Act (effects of a change of head company of a *MEC group); or

 (e) section 45710 in this Schedule (single entity rule for the purposes of this Part), including an application of that section under this Subdivision; or

 (f) section 45740 in this Schedule (effects of an interposed company becoming the head company of a consolidated group for the purposes of this Part); or

 (g) this section; or

 (h) one or more previous applications of any of the provisions covered by paragraphs (a) to (g).

 (6) In addition, and without affecting subsection (3):

 (a) an assessment of the former company for an income year that ends before the income year that includes the starting time; or

 (b) an amendment of the assessment;

is taken to be something that had happened to the new provisional head company, whether or not the assessment or amendment is made before the starting time.

 (7) This section has effect for the purposes of applying this Part to members of the *MEC group in relation to an *instalment quarter of the new provisional head company that ends after the starting time.

Note: An assessment mentioned in subsection (6) may therefore be taken to be the base assessment of the new provisional head company for the purposes of this Part.

 (8) Subsections (1) to (7) are to be disregarded in applying section 45915 (about the application of Subdivision 45Q to a company as the *provisional head company of a *MEC group).

Note: For example, if the Commissioner has given an initial head company instalment rate to the former company during an earlier instalment quarter, the rate is not, despite this section, treated as if it had been given to the new provisional head company for the purposes of section 45915. Subject to the other provisions in that section, Subdivision 45Q therefore starts applying to the new provisional head company under subsection 45915(4).

Special rule for the former company

 (9) A provision of this Part that applies on an entity becoming a member (other than the *provisional head company) of a *MEC group does not apply to the former company when it becomes such a member at the starting time.

Note: Section 45755 (the entry rule, as applied under this Subdivision) therefore does not apply to the former company on the company becoming such a member of the MEC group.

45922  Life insurance company

  In applying Subdivision 45Q to members of a *MEC group for an *instalment quarter of the *provisional head company of the group in an income year of the provisional head company, the company is taken to be a *life insurance company for that quarter if:

 (a) one or more life insurance companies are members of the group at any time during that quarter; or

 (b) one or more life insurance companies were members of the group at any time during a previous instalment quarter of the company in that year.

Extended operation of Subdivision 45R

45925  Additional modifications of sections 45855 and 45860

  In applying sections 45855 and 45860 to members of a *MEC group, those sections have effect as if, in addition to the modifications set out in the table in section 45910:

 (a) a reference in those sections to subsection 45705(2) were a reference to subsection 45915(2); and

 (b) a reference in those sections to subparagraph 45705(3)(c)(ii), (4)(d)(ii) or (iv) were a reference to subparagraph 45915(3)(c)(ii), (4)(b)(ii) or (iv).

45930  Modifications of sections 45865 and 45870 and a related provision

 (1) In applying sections 45865 and 45870, and subsection 4530(4) (which is related to section 45865), to members of a *MEC group, those provisions have effect as if:

 (a) a reference in those provisions to a *consolidated group were a reference to a *MEC group; and

 (b) a reference in those provisions to a MEC group were a reference to a consolidated group.

Note: This means a reference in those provisions to the head company of a consolidated group has effect as if it were a reference to the head company of a MEC group. Similarly, a reference in those provisions to a subsidiary member of a consolidated group has effect as if it were a reference to a subsidiary member of a MEC group.

 (2) However, the modifications in subsection (1) do not apply to subsection 45865(4) and the note at the end of section 45865.

Note: This means subsection 45865(4) and the note apply to members of a MEC group without any modifications.

45935  Additional modifications of section 45885

  In applying section 45885 to members of a *MEC group, that section has effect as if, in addition to the modifications set out in the table in section 45910, it had been modified as set out in the following table:

 

Modifications of section 45885

Item

Provision:

Modification:

1

Paragraph 45885(1)(e)

The paragraph is taken to have been replaced by the following paragraph:

(e) within 28 days after the starting time, or within such further period (if any) as the Commissioner allows, the Commissioner receives a notice under section 71976 of the Income Tax Assessment Act 1997 in relation the consolidation of that other MEC group, at and after the starting time, under section 71950 of the Income Tax Assessment Act 1997.

2

Subsection 45885(2) (including the note at the end of the subsection)

A reference to paragraph 45760(2)(a) is taken to be a reference to that paragraph as applied under this Subdivision

3

The note at the end of subsection 45885(2)

The reference to section 45705 is taken to be a reference to section 45915

Part 215Returns and assessments

Division 70Tax receipts

Table of Subdivisions

 Guide to Division 70

70A Tax receipts

Guide to Division 70

701  What this Division is about

The Commissioner must provide you with a tax receipt for an income year if you are an individual taxpayer and the total tax assessed to you for the income year is $100 or more (or such other amount as determined by the Commissioner from time to time).

The tax receipt must include information about how the total tax assessed to you for the income year is notionally used to finance different categories of Commonwealth government expenditure.

The tax receipt must also include information about the total amount of Commonwealth government debt, for the current and previous financial years, and the expected total amount of interest to be paid on that debt during the current financial year.

Subdivision 70ATax receipts

Table of sections

705 Tax receipt to be provided to certain individual taxpayers

705  Tax receipt to be provided to certain individual taxpayers

 (1) The Commissioner must give you a *tax receipt in respect of an income year if:

 (a) the Commissioner is required to give you a notice of assessment in respect of the income year and has not previously given you a notice in respect of the income year; and

 (b) you are an individual; and

 (c) the amount of income tax you owe (as worked out under step 4 of subsection 410(3) of the Income Tax Assessment Act 1997) for the *financial year that corresponds to the income year is equal to or greater than:

 (i) if subparagraph (ii) does not apply—$100; or

 (ii) if the Commissioner has made a determination under subsection (2)—the amount specified in the determination; and

 (d) the notice is given to you within the period of 18 months after the end of the income year.

 (2) The Commissioner may, by legislative instrument, make a determination that specifies an amount for the purposes of subparagraph (1)(c)(ii).

 (3) The *tax receipt must include the following information:

 (a) your name;

 (b) the amount mentioned in paragraph (1)(c);

 (c) how the amount mentioned in paragraph (1)(c) is notionally used to finance different categories of Commonwealth government expenditure (other than expenditure that relates to amounts collected under the *GST law that are paid to the States and Territories);

 (d) an estimate of the total face value of Commonwealth stock and securities on issue at the end of the previous *financial year;

 (e) an estimate of the expected total face value of Commonwealth stock and securities on issue at the end of the financial year;

 (f) the expected total interest to be paid during the financial year in respect of the Commonwealth stock and securities referred to in paragraph (e).

Note: The allocation of how the total tax assessed to you is spent is a notional calculation and may not represent how the tax assessed to you is actually spent.

 (4) For the purposes of determining the amounts in paragraphs (2)(d) to (f), the Commissioner must use the information in the budget economic and fiscal outlook report prepared for the purpose of section 10 of the Charter of Budget Honesty Act 1998 in respect of the *financial year referred to in paragraph (1)(c).

 (5) For the purposes of determining the form of the information to be included in the *tax receipt, the Commissioner must seek the advice of the Minister and take that advice into account.

 (6) The Commissioner must give you the *tax receipt as soon as practicable.

Part 230Collecting Medicare levy with income tax

Division 90Medicare levy and Medicare levy surcharge

Table of Subdivisions

90A Treatment like income tax

Subdivision 90ATreatment like income tax

Table of sections

901 Laws apply in relation to Medicare levy and Medicare levy surcharge as they apply in relation to income tax

901  Laws apply in relation to Medicare levy and Medicare levy surcharge as they apply in relation to income tax

  Except so far as the contrary intention appears, this Schedule and the Income Tax Assessment Act 1997 apply, and are taken always to have applied, in relation to the following in the same way as they apply in relation to income tax and *tax:

 (a) *Medicare levy;

 (b) *Medicare levy (fringe benefits) surcharge.

Part 235Excess superannuation contributions

Division 97Excess contributions determinations

Table of Subdivisions

97A Excess concessional contributions determinations

97B Excess nonconcessional contributions determinations

Subdivision 97AExcess concessional contributions determinations

Guide to Subdivision 97A

971  What this Subdivision is about

The Commissioner must give you a determination stating the amount of your excess concessional contributions.

Table of sections

Operative provisions

975 Determination of excess concessional contributions

9710 Review

Operative provisions

975  Determination of excess concessional contributions

 (1) If you have *excess concessional contributions for a *financial year, the Commissioner must make a written determination stating the amount of those excess concessional contributions.

 (2) A determination under this section is an excess concessional contributions determination.

 (3) The Commissioner may amend a determination at any time.

 (5) Notice of a determination given by the Commissioner under this section is prima facie evidence of the matters stated in the notice.

9710  Review

  If you are dissatisfied with an *excess concessional contributions determination made in relation to you, you may object against the determination in the manner set out in Part IVC.

Subdivision 97BExcess nonconcessional contributions determinations

Guide to Subdivision 97B

9720  What this Subdivision is about

The Commissioner must give you a determination stating:

 (a) the amount by which your nonconcessional contributions exceed your nonconcessional contributions cap; and

 (b) a proxy amount for your associated earnings on this excess; and

 (c) the total amount that can be released from your superannuation interests in relation to this excess and those earnings.

Table of sections

Operative provisions

9725 Excess nonconcessional contributions determinations

9730 Associated earnings

9735 Review

Operative provisions

9725  Excess nonconcessional contributions determinations

 (1) If your *nonconcessional contributions for a *financial year (the contributions year) exceed your *nonconcessional contributions cap for the contributions year, the Commissioner must make a written determination stating:

 (a) the amount of the excess; and

 (b) the amount of your associated earnings worked out under section 9730; and

 (c) the following amount (the total release amount):

  Start formula Amount of the excess plus open bracket 0.85 times Amount of your associated earnings close bracket end formula

 (2) A determination under this section is an excess nonconcessional contributions determination.

 (3) The Commissioner may amend a determination at any time.

 (5) Notice of a determination given by the Commissioner under this section is prima facie evidence of the matters stated in the notice.

9730  Associated earnings

 (1) You are taken to have associated earnings equal to the sum (rounded down to the nearest dollar) of the amounts worked out under the following formula for each of the days during the period:

 (a) starting on the first day of the contributions year; and

 (b) ending on the day the Commissioner makes the first *excess nonconcessional contributions determination you receive for the contributions year.

Start formula Proxy rate times open bracket Excess plus Sum of earlier daily proxy amounts close bracket end formula

where:

excess means the amount of the excess referred to in paragraph 9725(1)(a).

proxy rate means the lower of:

 (a) the rate worked out under subsection 8AAD(1) for the first day of that period as if the base interest rate (within the meaning of subsection 8AAD(2)) for that day were the average of the base interest rates for each of the days of the contributions year; and

 (b) a rate determined under subsection (2) for the contributions year.

sum of earlier daily proxy amounts means the sum of the amounts worked out under the formula for each of the earlier days (if any) during that period.

Note: Any excess nonconcessional contributions determination you receive after the first one for the contributions year is an amended determination.

 (2) The Minister may, by legislative instrument, determine a rate for a specified *financial year.

9735  Review

  If you are dissatisfied with an *excess nonconcessional contributions determination made in relation to you, you may object against the determination in the manner set out in Part IVC.

Chapter 3Collection, recovery and administration of other taxes

Part 310Indirect taxes

Division 105General rules for indirect taxes

Table of Subdivisions

 Guide to Division 105

105D General interest charge and penalties

105F Indirect tax refund schemes

105G Other administrative provisions

Guide to Division 105

1051  What this Division is about

This Division contains rules relating to the administration of the indirect tax laws.

 Note 1: Administration rules relevant to particular indirect tax laws are in Divisions 110, 111 and 112.

 Note 2: For assessment of assessable amounts under indirect tax laws, see Division 155.

The rules in this Division deal with the following:

 (c) limits on credits, refunds and recovering amounts;

 (e) the effect of not passing on refunds of overpaid amounts;

 (f) charges and penalties;

 (h) refunding indirect tax because of Australia’s international obligations;

 (i) requirements for notifications.

Subdivision 105DGeneral interest charge and penalties

Table of sections

10580 General interest charge

10585 Amending Acts cannot impose penalties or general interest charge earlier than 28 days after Royal Assent

10580  General interest charge

 (1) If any of an amount (the liability) to which this section applies remains unpaid after the time by which it is due to be paid, you are liable to pay the *general interest charge on the unpaid amount of the liability for each day in the period that:

 (a) started at the beginning of the day by which the liability was due to be paid; and

 (b) finishes at the end of the last day on which, at the end of the day, any of the following remains unpaid:

 (i) the liability;

 (ii) general interest charge on any of the liability.

Note: The general interest charge is worked out under Division 1 of Part IIA.

 (2) This section applies to either of the following amounts that you are liable to pay:

 (a) an *assessed net fuel amount;

 (b) an assessed amount of *indirect tax (including an *assessed net amount).

10585  Amending Acts cannot impose penalties or general interest charge earlier than 28 days after Royal Assent

 (1) An Act that amends an *indirect tax law does not have the effect of making you liable to:

 (a) a penalty for an offence against an indirect tax law; or

 (b) *general interest charge under section 10580;

for any act or omission that happens before the 28th day (the postponed day) after the day on which the amending Act receives the Royal Assent.

 (2) If the amending Act would (apart from this section) have the effect of making you liable to such a penalty or charge because you contravened a requirement to do something:

 (a) within a specified period ending before the postponed day; or

 (b) before a specified time happening before the postponed day;

the requirement has effect instead by reference to a period ending at the start of the postponed day, or by reference to the start of the postponed day, as the case requires.

 (3) This section does not relieve you from liability to such a penalty or charge to the extent to which the liability would have existed if the amending Act had not been enacted.

Subdivision 105FIndirect tax refund schemes

Table of sections

105120 Refund scheme—defence related international obligations

105125 Refund scheme—international obligations

105120  Refund scheme—defence related international obligations

 (1) The Commissioner must, on behalf of the Commonwealth, pay you an amount equal to the amount of *indirect tax borne by you in respect of an acquisition (within the meaning of the *GST Act) if:

 (a) you are in a class of entities determined by the *Defence Minister; and

 (b) the acquisition is covered by a determination of the Defence Minister; and

 (c) the acquisition is made:

 (i) by or on behalf of a *visiting force that is; or

 (ii) by a member (within the meaning of the Defence (Visiting Forces) Act 1963) of the visiting force who is; or

 (iii) by any other entity that is;

  covered by a determination of the Defence Minister; and

 (d) at the time of the acquisition, it was intended for:

 (i) the official use of the visiting force; or

 (ii) the use of a member (within the meaning of the Defence (Visiting Forces) Act 1963) of the visiting force; or

 (iii) any other use;

  and that use is covered by a determination of the Defence Minister; and

 (e) you claim the amount in the *approved form.

 (2) The amount is payable:

 (a) in accordance with the conditions and limitations; and

 (b) within the period and manner;

determined by the *Defence Minister.

 (3) The *Defence Minister may only determine an entity under subparagraph (1)(c)(iii) or a use under subparagraph (1)(d)(iii) if the Commonwealth is under an international obligation to grant *indirect tax concessions in relation to the kind of entity or the kind of use.

 (4) A determination under this section is a legislative instrument.

105125  Refund scheme—international obligations

 (1) The Commissioner must, on behalf of the Commonwealth, pay you, or an entity in a class of entities determined by the Commissioner, an amount equal to the amount of *indirect tax borne by you in respect of an acquisition (within the meaning of the *GST Act) made by you if:

 (a) you are a kind of entity specified in the regulations; and

 (b) the acquisition is of a kind specified in the regulations; and

 (c) you or the entity claims the amount in the *approved form.

 (2) The amount is payable:

 (a) in accordance with the conditions and limitations; and

 (b) within the period and manner;

set out in the regulations.

 (3) The regulations may only specify a kind of entity for the purposes of paragraph (1)(a) or a kind of acquisition for the purposes of paragraph (1)(b) if the Commonwealth is under an international obligation to grant *indirect tax concessions in relation to the kind of entity or the kind of acquisition.

 (4) A determination by the Commissioner under subsection (1) is not a legislative instrument.

Subdivision 105GOther administrative provisions

Table of sections

105145 Commissioner must give things in writing

105145  Commissioner must give things in writing

 (1) Any notice, approval, direction, authority or declaration that the Commissioner may give, or must give, to you under an *indirect tax law must be in writing.

 (2) However, this does not prevent the Commissioner giving any of those things to you by electronic transmission if a provision of an *indirect tax law allows the Commissioner to do so.

Division 110Goods and services tax

Table of Subdivisions

 Guide to Division 110

110F Review of GST decisions

Guide to Division 110

1101  What this Division is about

This Division gives you the right to object against reviewable GST decisions that relate to you. Section 11050 sets out the reviewable GST decisions.

Subdivision 110FReview of GST decisions

Table of sections

11050 Reviewable GST decisions

11050  Reviewable GST decisions

 (1) You may object, in the manner set out in Part IVC, against a decision you are dissatisfied with that is:

 (a) a *reviewable GST decision relating to you; or

 (b) a *reviewable GST transitional decision relating to you.

 (2) Each of the following decisions is a reviewable GST decision:

 

Reviewable GST decisions under GST Act

Item

Decision

Provision of GST Act under which decision is made

1

refusing to register you

subsection 255(1)

2

registering you

subsection 255(2)

3

deciding the date of effect of your registration

section 2510

4

refusing to cancel your registration

subsection 2555(1)

5

cancelling your registration

subsection 2555(2)

6

refusing to cancel your registration

section 2557

7

deciding the date on which the cancellation of your registration takes effect

section 2560

8

determining that the *tax periods that apply to you are each individual month

subsection 2715(1)

9

deciding the date of effect of a determination

subsection 2715(2)

10

refusing to revoke your election under section 2710

subsection 2722(1)

11

deciding the date of effect of a revocation

subsection 2722(3)

12

refusing to revoke a determination under section 2715

subsection 2725(1)

13

deciding the date of effect of a revocation

subsection 2725(2)

14

determining that a specified period is a *tax period that applies to you

section 2730

15

refusing a request for a determination

section 2737

16

revoking a determination under section 2737

subsection 2738(1)

17

deciding the date of a revocation

subsection 2738(2)

18

refusing to permit you to account on a cash basis

subsection 2945(1)

19

deciding the date of effect of your permission to account on a cash basis

subsection 2945(2)

20

revoking your permission to account on a cash basis

subsection 2950(3)

21

deciding the date of effect of the revocation of your permission to account on a cash basis

subsection 2950(4)

22

refusing an application for a decision that an event is a *fundraising event

paragraph 40165(1)(c)

23

approving another day of effect

paragraph 4871(1)(b)

24

revoking an approval of a day of effect

subsection 4871(2)

29

refusing an application for approval

section 495

30

refusing an application for approval or revocation

subsection 4970(1)

31

revoking an approval under Division 49

subsection 4970(2)

32

refusing an application for revocation

subsection 4975(1)

33

revoking the approval of a *GST religious group

subsection 4975(2)

34

deciding the date of effect of any approval, or any revocation of an approval, under Division 49

section 4985

35

approving another day of effect

paragraph 5175(1)(b)

36

revoking an approval of a day of effect

subsection 5175(2)

42

refusing an application for registration

section 545

43

deciding the date of effect of registration as a *GST branch

section 5410

44

refusing to cancel the registration of a *GST branch

subsection 5475(1)

45

cancelling the registration of a *GST branch

subsection 5475(2)

46

deciding the date of effect of the cancellation of the registration of a *GST branch

section 5480

47

cancelling the registration of an Australian resident agent

subsection 5725(1)

48

determining that the *tax periods that apply to a resident agent are each individual month

subsection 5735(1)

49

deciding the date of effect of a determination

subsection 5735(2)

49A

cancelling the registration of a *representative of an *incapacitated entity

subsection 5825(1)

49B

deciding to direct a *representative of an *incapacitated entity to give to the Commissioner a *GST return

paragraph 5850(1)(b)

50

cancelling the registration of a *nonprofit subentity

subsection 6335(1)

51

refusing to allow, or allowing, a further period within which to make an agreement that the margin scheme is to apply

paragraph 755(1A)(b)

52

refusing a request to allow an annual apportionment election to take effect from the start of another *tax period

paragraph 13110(2)(b)

53

disallowing an annual apportionment election

subsection 13120(3)

53A

refusing to make requested decision about excess GST

subsection 14215(1)

55

refusing a request to allow an annual *tax period election to take effect from the start of another tax period

paragraph 15110(2)(b)

56

refusing a request to be allowed to make an annual *tax period election on a specified day

subsection 15120(3)

57

disallowing an annual *tax period election

subsection 15125(3)

58

refusing a request to allow an election to pay *GST by instalments to take effect from the start of another *tax period

paragraph 16215(2)(b)

59

refusing a request to be allowed to make an election on a specified day

subsection 16225(3)

60

disallowing an election to pay *GST by instalments

subsection 16230(3)

62

making a declaration to negate or reduce a GST disadvantage

subsection 16545(3)

63

deciding whether to grant a request for a declaration to negate or reduce a GST disadvantage

subsection 16545(5)

 (3) A decision under section 24B of the A New Tax System (Goods and Services Tax Transition) Act 1999 refusing an application for a determination under that section, or making a determination under that section, is a reviewable GST transitional decision.

Division 111Wine tax and luxury car tax

Table of Subdivisions

 Guide to Division 111

111C Review of wine tax decisions

111D Effect on contracts from amendments to laws

Guide to Division 111

1111  What this Division is about

This Division gives you the right to object against decisions that relate to you disallowing the whole or part of a claim for a wine tax credit.

It also explains how contracts to supply wine or a luxury car are affected if a wine tax law or luxury car tax law changes.

Subdivision 111CReview of wine tax decisions

Table of sections

11150 Reviewable wine tax decisions

11150  Reviewable wine tax decisions

 (1) You may object, in the manner set out in Part IVC, against a decision you are dissatisfied with that is a *reviewable wine tax decision relating to you.

 (2) Each of the following decisions is a reviewable wine tax decision:

 

Reviewable wine tax decisions

Item

Decision

Provision of Wine Tax Act under which decision is made

1

disallowing the whole or a part of your claim for a *wine tax credit

section 1745

2

deciding the date of effect of your approval as a New Zealand participant

section 197

3

refusing to approve you as a New Zealand participant

section 197

4

revoking your approval as a New Zealand participant

section 198

5

deciding the date of effect of revocation of your approval as a New Zealand participant

section 198

Subdivision 111DEffect on contracts from amendments to laws

Table of sections

11160 Alteration of contracts if cost of complying with agreement is affected by later alteration to wine tax or luxury car tax laws

11160  Alteration of contracts if cost of complying with agreement is affected by later alteration to wine tax or luxury car tax laws

 (1) If, after a contract involving a *supply, or a *taxable dealing in relation to *wine, has been made, an alteration to the *wine tax law or the *luxury car tax law happens and the alteration directly causes an increase or decrease in the cost to a party to the agreement of complying with the agreement, then the contract is altered as follows:

 (a) if the cost is increased—by allowing the party to add the increase to the contract price;

 (b) if the cost is decreased—by allowing the other party to deduct the decrease from the contract price.

 (2) The contract is not altered if:

 (a) the contract has express written provision to the contrary; or

 (b) it is clear from the terms of the contract that the alteration of the *wine tax law or the *luxury car tax law has been taken into account in the agreed contract price.

Division 112Fuel tax

Table of Subdivisions

 Guide to Division 112

112E Review of fuel tax decisions

Guide to Division 112

1121  What this Division is about

This Division gives you the right to object against reviewable fuel tax decisions that relate to you. Section 11250 sets out the reviewable fuel tax decisions.

Subdivision 112EReview of fuel tax decisions

Table of sections

11250 Reviewable fuel tax decisions

11250  Reviewable fuel tax decisions

 (1) You may object, in the manner set out in Part IVC, against a decision you are dissatisfied with that is a *reviewable fuel tax decision relating to you.

 (2) Each of the following decisions is a reviewable fuel tax decision:

 

Reviewable fuel tax decisions

Item

Decision

Provision of the Fuel Tax Act 2006 under which decision is made

2

making a declaration to negate or reduce a *fuel tax disadvantage

subsection 7545(3)

3

deciding whether or not to grant a request to negate or reduce a *fuel tax disadvantage

subsection 7545(5)

Part 315Major bank levy

Division 115General provisions relating to the major bank levy

1151  What this Division is about

An ADI that is liable to pay levy under the Major Bank Levy Act 2017 must give quarterly returns to the Commissioner.

An amount of levy is due and payable when an ADI’s last PAYG instalment within an instalment quarter is due.

Table of sections

1155 Returns

11510 When major bank levy is due and payable

1155  Returns

 (1) An *ADI that is liable to pay levy for a *quarter under the Major Bank Levy Act 2017 must give to the Commissioner a return relating to the levy, in the *approved form.

 (2) The return must be given on or before the *MBL reporting day for the *quarter.

 (3) The MBL reporting day for the *quarter is the day by which the *ADI is required to give to *APRA a report, in accordance with a standard determined by APRA under section 13 of the Financial Sector (Collection of Data) Act 2001, that:

 (a) relates to the *quarter; and

 (b) states the total liabilities amount (within the meaning of the Major Bank Levy Act 2017) for the quarter in relation to the ADI.

11510  When major bank levy is due and payable

 (1) An amount of levy under the Major Bank Levy Act 2017 that an *ADI is liable to pay for a *quarter is due and payable on the first day:

 (a) that occurs on or after the *MBL reporting day for the quarter; and

 (b) on which the last instalment that the ADI is liable to pay within an *instalment quarter is due under Subdivision 45B.

 (2) If that amount remains unpaid after it is due and payable, the *ADI is liable to pay *general interest charge on the unpaid amount for each day in the period that:

 (a) started at the beginning of the day by which the amount was due to be paid; and

 (b) finishes at the end of the last day at the end of which either of the following remains unpaid:

 (i) the amount;

 (ii) general interest charge on any of the amount.

Division 117Antiavoidance

Table of Subdivisions

 Guide to Division 117

117A Application of this Division

117B Commissioner may negate effects of schemes for MBL benefits

Guide to Division 117

1171  What this Division is about

This Division applies to deter schemes that give entities MBL benefits.

If the sole or dominant purpose of entering into a scheme is to give an entity such a benefit, the Commissioner may negate the MBL benefit an entity gets from the scheme by making a determination.

Subdivision 117AApplication of this Division

Table of sections

1175 Object of this Division

11710 Application of this Division

11715 Meaning of MBL benefit

11720 Matters to be considered in determining purpose

1175  Object of this Division

  The object of this Division is to deter *schemes to give entities benefits that reduce or defer liabilities to levy under the Major Bank Levy Act 2017.

11710  Application of this Division

 (1) This Division applies if:

 (a) an entity gets or got an *MBL benefit from a *scheme; and

 (b) taking account of the matters described in section 11720, it is reasonable to conclude that an entity that (whether alone or with others) entered into or carried out the scheme, or part of the scheme, did so for the sole or dominant purpose of that entity or another entity getting an MBL benefit from the scheme; and

 (c) the scheme:

 (i) has been or is entered into at or after 7.30 pm, by legal time in the Australian Capital Territory, on 9 May 2017; or

 (ii) has been or is carried out or commenced at or after that time (other than a scheme that was entered into before that time).

 (2) It does not matter whether the *scheme, or any part of the scheme, was entered into or carried out inside or outside Australia.

11715  Meaning of MBL benefit

 (1) An entity gets an MBL benefit from a *scheme, if:

 (a) an amount of levy under the Major Bank Levy Act 2017 that is payable by the entity under this Act apart from this Division is, or could reasonably be expected to be, smaller than it would be apart from the scheme or a part of the scheme; or

 (b) all or part of an amount of levy under the Major Bank Levy Act 2017 that is payable by the entity under this Act apart from this Division is, or could reasonably be expected to be, payable later than it would have been apart from the scheme or a part of the scheme.

 (2) To avoid doubt, a smaller liability mentioned in paragraph (1)(a) includes a case where the liability is zero, or there is no such liability for a particular *quarter.

11720  Matters to be considered in determining purpose

  The following matters are to be taken into account under section 11710 in considering an entity’s purpose in entering into or carrying out the *scheme, or part of the scheme:

 (a) the manner in which the scheme was entered into or carried out;

 (b) the form and substance of the scheme;

 (c) the time at which the scheme was entered into and the length of the period during which the scheme was carried out;

 (d) the effect that the Major Bank Levy Act 2017, and any other *taxation law to the extent that it applies in relation to that Act, would have in relation to the scheme apart from this Division;

 (e) any change in the financial position of the entity that has resulted, or may reasonably be expected to result, from the scheme;

 (f) any change that has resulted, or may reasonably be expected to result, from the scheme in the financial position of an entity (a connected entity) that has or had a connection or dealing with the entity, whether the connection or dealing is or was of a business or other nature;

 (g) any other consequence for the entity or a connected entity of the scheme having been entered into or carried out;

 (h) the nature of the connection (whether of a business or other nature) between the entity and a connected entity.

Subdivision 117BCommissioner may negate effects of schemes for MBL benefits

Table of sections

11725 Commissioner may negate entity’s MBL benefits

11730 Determination has effect according to its terms

11735 Commissioner may disregard scheme in making determinations

11740 One determination may cover several quarters etc.

11745 Commissioner must give copy of determination to entity affected

11750 Objections

11725  Commissioner may negate entity’s MBL benefits

 (1) For the purpose of negating an *MBL benefit the entity mentioned in paragraph 11710(1)(a) gets or got from the *scheme, the Commissioner may:

 (a) make a determination stating the amount that is (and has been at all times) the entity’s liability for levy under the Major Bank Levy Act 2017, for a specified *quarter that has ended; or

 (b) make a determination stating the amount that is (and has been at all times) a particular amount mentioned in paragraph 5(2)(a) or (b) of that Act, for a specified quarter that has ended.

 (2) A determination under this section is not a legislative instrument.

 (3) The Commissioner may take such action as the Commissioner considers necessary to give effect to the determination.

11730  Determination has effect according to its terms

  For the purpose of making an *assessment, a statement in a determination under this Subdivision has effect according to its terms, despite the provisions of a *taxation law outside of this Division.

11735  Commissioner may disregard scheme in making determinations

  For the purposes of making a determination under this Subdivision, the Commissioner may:

 (a) treat a particular event that actually happened as not having happened; and

 (b) treat a particular event that did not actually happen as having happened and, if appropriate, treat the event as:

 (i) having happened at a particular time; and

 (ii) having involved particular action by a particular entity; and

 (c) treat a particular event that actually happened as:

 (i) having happened at a time different from the time it actually happened; or

 (ii) having involved particular action by a particular entity (whether or not the event actually involved any action by that entity).

11740  One determination may cover several quarters etc.

  To avoid doubt, statements relating to different *quarters and different *MBL benefits may be included in a single determination under this Subdivision.

11745  Commissioner must give copy of determination to entity affected

 (1) The Commissioner must give a copy of a determination under this Subdivision to the entity whose liability for levy under the Major Bank Levy Act 2017 is stated in the determination.

 (2) A failure to comply with subsection (1) does not affect the validity of the determination.

11750  Objections

  If the entity whose liability for levy under the Major Bank Levy Act 2017 is stated in a determination under this Subdivision is dissatisfied with the determination, the entity may object against it in the manner set out in Part IVC of the Taxation Administration Act 1953.

Part 317Laminaria and Corallina decommissioning levy

Division 125General provisions relating to Laminaria and Corallina decommissioning levy

1251  What this Division is about

You must give the Commissioner a return relating to Laminaria and Corallina decommissioning levy if you are a leviable entity for a financial year.

An amount of levy is due and payable 21 days after the day the Commissioner gives you a notice of assessment.

This Division contains other rules relating to the administration of the levy, including rules dealing with charges and assessments.

Table of sections

Operative provisions

1255 Returns

12510 When Laminaria and Corallina decommissioning levy and related charges are due and payable

12515 Assessments of Laminaria and Corallina decommissioning levy

Operative provisions

1255  Returns

 (1) You must give the Commissioner a return relating to *Laminaria and Corallina decommissioning levy in the *approved form if you are a leviable entity (within the meaning of the Offshore Petroleum (Laminaria and Corallina Decommissioning Cost Recovery Levy) Act 2022) for a financial year that is a levy year (within the meaning of that Act).

Note: You are required to give the Commissioner a return in accordance with this subsection even if the amount of that levy you are liable to pay is nil.

 (2) The return must be given within 6 months after the end of the financial year.

12510  When Laminaria and Corallina decommissioning levy and related charges are due and payable

Original assessments

 (1) If you are liable to pay an amount of *Laminaria and Corallina decommissioning levy for a financial year, the amount is due and payable 21 days after the day the Commissioner gives you a notice of assessment for the financial year.

Amended assessments

 (2) If the Commissioner amends your assessment of an amount of *Laminaria and Corallina decommissioning levy, any extra levy resulting from the amendment is due and payable 21 days after the day the Commissioner gives you notice of the amended assessment.

Shortfall interest charge

 (3) If you are liable to pay an amount of *shortfall interest charge under section 280102D, the amount is due and payable 21 days after the day the Commissioner gives you notice of the charge.

General interest charge

 (4) If an amount of levy or *shortfall interest charge payable under this section remains unpaid after it is due and payable, you are liable to pay *general interest charge on the unpaid amount for each day in the period that:

 (a) started at the beginning of the day by which the amount was due to be paid; and

 (b) finishes at the end of the last day at the end of which any of the following remains unpaid:

 (i) the amount of levy or shortfall interest charge;

 (ii) general interest charge on any of the amount of levy or shortfall interest charge.

12515  Assessments of Laminaria and Corallina decommissioning levy

 (1) In applying Division 155 in relation to an amount of *Laminaria and Corallina decommissioning levy:

 (a) apply the provisions of that Division with the modification set out in subsection (2) of this section; and

 (b) disregard section 15570.

 (2) Despite subsection 15535(2), the period of review, for an assessment of an amount of *Laminaria and Corallina decommissioning levy, is:

 (a) the period:

 (i) starting on the day on which the Commissioner first gives notice of the assessment to you under section 15510; and

 (ii) ending on the last day of the period of 6 months starting the day after that day; or

 (b) if the period of review is extended under subsection 15535(3) or (4)—the period as so extended.

Part 320Superannuation

Division 131Releasing money from superannuation

Table of Subdivisions

131A Releasing money from superannuation

Subdivision 131AReleasing money from superannuation

Guide to Subdivision 131A

1311  What this Subdivision is about

You may request the Commissioner to require the release of an amount from your superannuation interests if you are given:

 (a) an excess concessional contributions determination or excess nonconcessional contributions determination; or

 (b) a notice of assessment of an amount of Division 293 tax; or

 (c) a first home super saver determination.

The Commissioner may also require the release of an amount from your superannuation interests in related circumstances.

Superannuation providers must usually pay the amount required to be released. However, for defined benefit superannuation interests the provider may choose whether or not to pay.

Released amounts are paid to the Commissioner. You get a credit for the released amount. Surplus credits are refunded to you under Division 3A of Part IIB.

Table of sections

Requesting a release authority

1315 Requesting the release of amounts from superannuation interests

13110 Restrictions on the total amount you can request to be released

Issuing a release authority to superannuation provider

13115 Issuing release authorities

13120 Amount to be stated in a release authority

13125 Contents of a release authority

13130 Varying and revoking a release authority

Complying with a release authority

13135 Obligations of superannuation providers

13140 Voluntary compliance with a release authority relating to defined benefit interests

13145 Meaning of maximum available release amount

13150 Notifying Commissioner

13155 Notifying you

13160 Compensation for acquisition of property

Consequences of releasing amounts

13165 Entitlement to credits

13170 Interest for late payments of money received by the Commissioner in accordance with release authority

13175 Income tax treatment of amounts released—proportioning rule does not apply

Requesting a release authority

1315  Requesting the release of amounts from superannuation interests

 (1) You may make a request under this section for a *financial year if you are given any of the following:

 (a) an *excess concessional contributions determination for the financial year;

 (b) an *excess nonconcessional contributions determination for the financial year;

 (c) a notice of assessment of an amount of *Division 293 tax payable for the income year that corresponds to the financial year;

 (d) a *first home super saver determination.

 (2) You make the request by:

 (a) notifying the Commissioner of the total amount to be released; and

 (b) identifying your *superannuation interest or interests from which that total amount is to be released; and

 (c) if you identify more than one superannuation interest—stating the amount to be released from each such interest.

 (3) The request must:

 (a) ensure that the total amount to be released for the determination or assessment complies with section 13110; and

 (b) be in the *approved form; and

 (c) be given to the Commissioner within:

 (i) 60 days after the Commissioner issues the determination or notice referred to in subsection (1); or

 (ii) a further period allowed by the Commissioner.

Unsuccessful requests—making a further request

 (4) If:

 (a) you make a valid request under this section; and

 (b) the Commissioner gives you a notice under subsection 13155(1) stating an amount (the unreleased amount) that a *superannuation provider did not pay in relation to a release authority issued for that request;

you may make a further request to release the unreleased amount from another of your *superannuation interests.

 (5) The further request must comply with subsection (2) and paragraphs (3)(a) and (b), and must be given to the Commissioner within:

 (a) 60 days after the Commissioner issues the notice mentioned in paragraph (4)(b); or

 (b) a further period allowed by the Commissioner.

Request is irrevocable

 (6) A request under this section is irrevocable.

13110  Restrictions on the total amount you can request to be released

 (1) The total amount you can request to be released complies with this section if that amount:

 (a) if item 1, 3 or 4 of the following table applies—does not exceed the relevant amount referred to in that item; or

 (b) if item 2 of the following table applies—is nil or equals the relevant amount referred to in that item.

 

Amount you can request to be released

Item

If the request relates to this kind of determination or assessment (see subsection 1315(1)):

The relevant amount is: