TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988 - LONG TITLE

An Act to amend the law relating to taxation

PART I - PRELIMINARY

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 1

Short title [see Note 1]

1. This Act may be cited as the Taxation Laws Amendment Act (No. 2)

1988.

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 2

Commencement [see Note 1]

2. (1) Subject to this section, this Act commences on the day on which it

receives the Royal Assent.

(2) Subsection 14 (2) commences on 1 July 1988.

(3) Section 15 shall be taken to have commenced on 22 December 1986.

(4) Part II, section 37, sections 39 to 53 (inclusive) and subsections 55

(15) to (25) (inclusive) commence on a day to be fixed by Proclamation.

(5) Part VI shall be taken to have commenced on 22 July 1986.

(6) Part VII shall be taken to have commenced on 18 December 1987.

PART II - AMENDMENT OF THE FRINGE BENEFITS TAX ASSESSMENT ACT 1986

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 3

Principal Act

3. In this Part, "Principal Act" means the Fringe Benefits Tax Assessment

Act 1986*1*.

*1* No. 39, 1986, as amended. For previous amendments, see Nos. 48 and 112,

1986; and Nos. 23, 139 and 145, 1987.

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 4

Certificate of sources of information

4. Section 71 of the Principal Act is amended by inserting after subsection

(2) the following subsection:

"(2A) The agent's certificate shall, for the purposes of this Act, be deemed

to be duly signed, in the case of a natural person who is registered as a tax

agent under Part VIIA of the Income Tax Assessment Act 1936, if, and only if:

(a) it is signed by the natural person; or

(b) it is signed in the name of the natural person by another person who is

registered as a nominee of the natural person for the purposes of that Part,

and that other person's name is also appended.".

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 5

Preparation of returns etc. on behalf of registered tax agents

5. Section 121 of the Principal Act is amended by inserting after subsection

(2) the following subsection:

"(2A) A natural person who is registered as a tax agent shall not allow any

person to do anything specified in paragraph (1) (a) or (b) except under the

supervision and control of:

(a) the tax agent; or

(b) a person who is a registered nominee of the tax agent for the purposes

of Part VIIA of the Income Tax Assessment Act 1936.

Penalty: $1,000.".

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 6

Advertising etc. by persons other than registered tax agents

6. Section 122 of the Principal Act is amended:

(a) by omitting "A person" and substituting "Subject to this section, a

person";

(b) by adding at the end the following subsection:

"(2) Subsection (1) does not apply in relation to advertising that

relates to acts or things done or to be done by a solicitor or counsel acting

in the course of his or her profession:

(a) in the preparation of an objection;

(b) in litigation or proceedings before a board, the Tribunal or a

court; or

fringe benefits tax return or objection or with any fringe benefits tax

matter.".

PART III - AMENDMENT OF THE INCOME TAX ASSESSMENT ACT 1936

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 7

Principal Act

7. In this Part, "Principal Act" means the Income Tax Assessment Act

1936*2*.

*2* No. 27, 1936, as amended. For previous amendments, see No. 88, 1936; No.

5, 1937; No. 46, 1938; No. 30, 1939; Nos. 17 and 65, 1940; Nos. 58 and 69,

1941; Nos. 22 and 50, 1942; No. 10, 1943; Nos. 3 and 28, 1944; Nos. 4 and 37,

1945; No. 6, 1946; Nos. 11 and 63, 1947; No. 44, 1948; No. 66, 1949; No. 48,

1950; No. 44, 1951; Nos. 4, 28 and 90, 1952; Nos. 1, 28, 45 and 81, 1953; No.

43, 1954; Nos. 18 and 62, 1955; Nos. 25, 30 and 101, 1956; Nos. 39 and 65,

1957; No. 55, 1958; Nos. 12, 70 and 85, 1959; Nos. 17, 18, 58 and 108, 1960;

Nos. 17, 27 and 94, 1961; Nos. 39 and 98, 1962; Nos. 34 and 69, 1963; Nos. 46,

68, 110 and 115, 1964; Nos. 33, 103 and 143, 1965; Nos. 50 and 83, 1966; Nos.

19, 38, 76 and 85, 1967; Nos. 4, 70, 87 and 148, 1968; Nos. 18, 93 and 101,

1969; No. 87, 1970; Nos. 6, 54 and 93, 1971; Nos. 5, 46, 47, 65 and 85, 1972;

Nos. 51, 52, 53, 164 and 165, 1973; No. 216, 1973 (as amended by No. 20,

1974); Nos. 26 and 126, 1974; Nos. 80 and 117, 1975; Nos. 50, 53, 56, 98, 143,

165 and 205, 1976; Nos. 57, 126 and 127, 1977; Nos. 36, 57, 87, 90, 123, 171

and 172, 1978; Nos. 12, 19, 27, 43, 62, 146, 147 and 149, 1979; Nos. 19, 24,

57, 58, 124, 133, 134 and 159, 1980; Nos. 61, 92, 108, 109, 110, 111, 154 and

175, 1981; Nos. 29, 38, 39, 76, 80, 106 and 123, 1982; Nos. 14, 25, 39, 49,

51, 54 and 103, 1983; Nos. 14, 42, 47, 63, 76, 115, 124, 165 and 174, 1984;

No. 123, 1984 (as amended by No. 65, 1985); Nos. 47, 49, 104, 123 and 168,

1985; No. 173, 1985 (as amended by No. 49, 1986); Nos. 41, 46, 48, 49, 51, 52,

90, 109, 112 and 154, 1986; Nos. 23, 58, 61, 108, 120, 138, 145 and 163, 1987;

No. 62, 1987 (as amended by No. 108, 1987); No. 139, 1987 (as amended by No.

11, 1988); and Nos. 8 and 11, 1988.

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 8

Foreign income and foreign tax

8. Section 6AB of the Principal Act is amended:

(a) by adding at the end of subsection (2) "or a credit absorption tax";

(b) by inserting in subsection (6) the following definition:

" 'credit absorption tax' means a tax imposed by a law of a foreign

country to the extent that the tax would not have been payable if the taxpayer

concerned or another taxpayer had not been entitled to a credit in respect of

the tax under Division 18 of Part III;".

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 9

Officers to observe secrecy

9. Section 16 of the Principal Act is amended by omitting from paragraph (4)

(g) "Compensation (Australian Government Employees) Act 1971-1973" and

substituting "Compensation (Commonwealth Government Employees) Act 1971".

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 10

Exemptions

10. Section 23 of the Principal Act is amended:

(a) by omitting paragraphs (x) and (y);

(b) by omitting from sub-subparagraph (z) (v) (B), subparagraph (z) (vi),

sub-subparagraph (zaa) (i) (B) and subparagraph (zaa) (ii) "the person who

received the benefit" and substituting "the student";

(d) by adding at the end of paragraph (z) the following subparagraphs:

"(viii) an amount received under the scheme known as the Aboriginal

Study Assistance Scheme that does not include a payment made in respect of a

child or children wholly or substantially dependent on the student; or

(ix) if an amount received under the scheme known as the Aboriginal

Study Assistance Scheme includes a payment made in respect of a child or

children wholly or substantially dependent on the student-so much of the

first-mentioned amount as exceeds the amount paid in respect of the child or

children;";

(e) by omitting "or" from the end of subparagraph (zaa) (ii);

(f) by omitting "and" from the end of subparagraph (zaa) (iii);

(g) by adding at the end of paragraph (zaa) the following subparagraphs:

"(iv) an amount received under the scheme known as the Aboriginal

Secondary Assistance Scheme in respect of a period commencing at or after the

time the student attained the age of 16 years;

(v) an amount received under the scheme known as the Aboriginal Study

Assistance Scheme that does not include a payment made in respect of a child

or children wholly or substantially dependent on the student; or

(vi) if an amount received under the scheme known as the Aboriginal

Study Assistance Scheme includes a payment made in respect of a child or

children wholly or substantially dependent on the student-so much of the

first-mentioned amount as exceeds the amount paid in respect of the child or

children; and".

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 11

Income of certain persons serving with an armed force under the control of

the

United Nations

11. Section 23AB of the Principal Act is amended by omitting from paragraph

(5) (a) "Compensation (Australian Government Employees) Act 1971-1973" and

substituting "Compensation (Commonwealth Government Employees) Act 1971".

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 12

Exemption of certain pensions

12. Section 23AD of the Principal Act is amended:

(a) by omitting "relative" from paragraph (a) of the definition of "carer's

pension" in subsection (1) and substituting "severely handicapped person";

(b) by inserting after paragraph (3) (a) the following paragraph:

"(aa) payments of allowances under Part III of the Disability Services Act

1986;".

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 13

Exemption of income earned in overseas employment

13. Section 23AG of the Principal Act is amended by inserting after

subsection (6) the following subsections:

"(6A) For the purposes of this section, the absentee credit balance of a

person at a particular time is the number of whole days (if any) by which the

total of the absentee credits of the person arising before that time exceeds

the total of the absentee debits of the person arising before that time.

"(6B) For the purposes of this section, where a person has been engaged in

foreign service for a whole day, there arises, at the end of that day, an

absentee credit of the number of hours calculated in accordance with the

following formula:

31 X 24

334 unless the absentee credit balance of

the person, ascertained immediately after the end of that day, would exceed 31

days.

"(6C) Where:

(a) a person has been engaged in foreign service for a continuous period

(in this subsection called the 'first foreign service period') (including a

period that is applicable because of one or more applications of subsection

(6D) or (6E)); and

(b) at a time after the end of the first foreign service period, the person

becomes engaged in foreign service for a further continuous period (in this

subsection called the 'second foreign service period'); there arises, at the

end of each whole day:

foreign service period and ending immediately before the commencement of the

second foreign service period; and

(d) on which the absentee credit balance of the person, ascertained at the

beginning of that day, is not less than 24 hours; an absentee debit of 24

hours.

"(6D) Where:

(a) a person has been engaged in foreign service for a continuous period

(in this subsection called the 'first foreign service period') (including a

period that is applicable because of one or more applications of this

subsection or subsection (6E));

(b) at a time after the end of the first foreign service period, the person

becomes engaged in foreign service for a further continuous period (in this

subsection called the 'second foreign service period'); and

foreign service period, the absentee credit balance of the person exceeded

nil; the first foreign service period and the second foreign service period

shall together be taken to constitute a continuous period during which the

person was engaged in foreign service.

"(6E) Where:

(a) a person has been engaged in foreign service for a continuous period

(in this subsection called the 'first foreign service period') (including a

period that is applicable because of one or more applications of this

subsection or subsection (6D));

(b) at a time after the end of the first foreign service period, the person

becomes engaged in foreign service for a further continuous period (in this

subsection called the 'second foreign service period'); and

service period and ending immediately before the commencement of the second

foreign service period is less than 24 hours; the first foreign service period

and the second foreign service period shall together be taken to constitute a

continuous period during which the person was engaged in foreign service.

"(6F) Where:

(a) a person has derived foreign earnings during a year of income; and

(b) at the time of making an assessment in respect of income of the person

of the year of income, the Commissioner is of the opinion that, at a later

time, circumstances will exist because of which the whole or a part of those

foreign earnings will be exempted from tax by this section; the Commissioner

may apply the provisions of this section as if those circumstances existed at

the time of making the assessment.

"(6G) Where:

(a) in the making of an assessment, this section has been applied on the

basis that a circumstance that did not exist at the time of making the

assessment would exist at a later time; and

(b) the Commissioner, after making the assessment, becomes satisfied that

the circumstance will not exist; then, notwithstanding anything contained in

section 170, the Commissioner may amend the assessment at any time for the

purposes of ensuring that this section shall be taken always to have applied

on the basis that the circumstance did not exist.

"(6H) This section does not apply in relation to a taxpayer in relation to a

year of income if the amount of tax that would have been payable by the

taxpayer in respect of income of the year of income if this section had not

been enacted (reduced by the amount of any credit that is allowable under

Division 18 in relation to the year of income) is less than the amount of tax

that, apart from this subsection, would have been payable by the taxpayer in

respect of income of the year of income.

"(6J) In subsections (6B) and (6C):

'whole day' means one of the 7 days of the week.".

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 14

Losses and outgoings

14. (1) Section 51 of the Principal Act is amended by omitting from

subsection (6) "foreign" (first occurring).

(2) Section 51 of the Principal Act is amended by omitting subsections (6)

and (7).

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 15

Special depreciation on trading ships

15. Section 57AM of the Principal Act is amended:

(a) by inserting in subsection (1) the following definitions:

" 'Grants Act ship', in relation to a taxpayer, means a ship in respect

of which the taxpayer is or was entitled to a grant under subsection 8 (1) of

the Ships (Capital Grants) Act 1987;

'pre-December 1986 manning notice' means:

(a) a manning notice given before 22 December 1986; or

(b) a manning notice given on or after that date where the request

for the manning notice was made before that date;

or, if that notice is varied, that notice as varied;";

(b) by inserting after paragraph (4) (b) the following paragraph:

"(ba) in the case of a ship that is a Grants Act ship of the

taxpayer-the ship is delivered to the taxpayer, and registered under the

Shipping Registration Act 1981, before 1 July 1992;";

Grants Act ship of the taxpayer," before "the ship";

(d) by omitting paragraph (4) (h) and substituting the following

paragraph:

"(h) either of the following conditions is satisfied:

(i) the ship is a Grants Act ship of the taxpayer;

(ii) the ship is used, or is held in reserve for use, in operations

of a kind specified in a pre-December 1986 manning notice in force in relation

to the ship and is not, when manned, manned at a level that exceeds the level

specified in the notice for operations of that kind.";

(e) by inserting after subsection (4) the following subsection:

"(4A) For the purposes of this section, but without limiting the

generality of subsection (4), where:

(a) a taxpayer has been paid a grant under subsection 8 (1) of the Ships

(Capital Grants) Act 1987 in respect of a ship;

(b) either of the following conditions is satisfied:

(i) the taxpayer has become liable, under subsection 26 (1) of that

Act, to pay an amount in respect of the grant;

(ii) before the end of the last year of income in respect of which

depreciation ascertained in accordance with this section would, apart from

this subsection, be allowable to the taxpayer in respect of the ship, the

taxpayer has become liable, under subsection 26 (2) of that Act, to repay the

amount of the grant; and

liability was incurred;

the ship shall be taken to have ceased to be an eligible Australian ship:

(d) if subparagraph (b) (i) applies-when that liability was incurred;

(e) if subparagraph (b) (ii) applies-before the end of 12 months after

the day on which the ship became an eligible Australian ship.";

(f) by omitting "and" from the end of paragraph (33) (h);

(g) by inserting after paragraph (33) (h) the following paragraph:

"(ha) if the lessee is or was entitled to a grant in respect of the ship

under subsection 8 (1) of the Ships (Capital Grants) Act 1987:

(i) the ship shall be treated, for the purposes of this section, as

if it were a Grants Act ship of the taxpayer;

(ii) paragraph (4) (ba) applies in relation to the ship as if the

second reference in that paragraph to the taxpayer were a reference to the

lessee; and

(iii) subsection (4A) applies in relation to the ship as if a

reference in paragraph (a) of that subsection to the taxpayer were a reference

to the lessee; and".

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 16

16. After section 79C of the Principal Act the following section is

inserted:

Limitation on deductions from foreign income

"79D. (1) Where the amount of a class of income derived by a taxpayer in a

year of income from a foreign source is exceeded by the sum of:

(a) any deductions allowed or allowable from the assessable income of the

taxpayer of the year of income that relate exclusively to income of that class

derived from that source; and

(b) so much of any other deductions allowed or allowable from that

assessable income (other than apportionable deductions) as, in the opinion of

the Commissioner, may appropriately be related to income of that class derived

from that source; the deductions to which paragraphs (a) and (b) apply shall

be reduced respectively by amounts proportionate to those deductions and equal

in total to the amount of the excess.

"(2) In subsection (1), 'class of income' and 'foreign source' have the same

meanings as in section 160AFD.".

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 17

Domestic losses of previous years

17. Section 80 of the Principal Act is amended by omitting from subsection

(8) "foreign" (first occurring).

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 18

Interpretation

18. Section 102M of the Principal Act is amended:

(a) by omitting ", (i) or (x)" from paragraph (a) of the definition of

"exempt entity" and substituting "or (i)";

(b) by inserting after paragraph (b) of the definition of "exempt entity"

the following paragraph:

"(ba) an organisation that is exempted from income tax by regulations

under the International Organizations (Privileges and Immunities) Act 1963;".

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 19

Interpretation

19. Section 121F of the Principal Act is amended:

(a) by omitting ", (jb) and (x)" from paragraph (a) of the definition of

"relevant exempting provision" in subsection (1) and substituting "and (jb)";

(b) by inserting after paragraph (b) of the definition of "relevant

exempting provision" in subsection (1) the following paragraph:

"(baa) paragraph 23 (x) as in force at any time before the commencement

of section 1 of the Taxation Laws Amendment Act (No. 2) 1988;";

"relevant exempting provision" in subsection (1);

(d) by inserting after paragraph (ca) of the definition of "relevant

exempting provision" in subsection (1) the following paragraph:

"(cb) regulations under the International Organizations (Privileges and

Immunities) Act 1963, insofar as those regulations provide that an

organisation is not liable to income tax; and".

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 20

Allowable capital expenditure

20. Section 124AA of the Principal Act is amended by omitting from paragraph

(2) (ba) "subsection 124ABA (1)" and substituting "section 124ABA".

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 21

Allowable capital expenditure in respect of cash bidding payments for

exploration permits and production licences

21. Section 124ABA of the Principal Act is amended:

(a) by inserting after subsection (1) the following subsections:

"(1A) Where:

(a) a taxpayer makes a permit cash bidding payment in relation to the

grant of an exploration permit; and

(b) the payment is made at or after the time of the grant of a

production licence that is related to the exploration permit; the amount of

the payment shall be taken, for the purposes of this D ivision, to be

expenditure of a capital nature incurred by the taxpayer at the time of

payment.

"(1B) Each licence cash bidding payment paid by a taxpayer shall be

taken, for the purposes of this Division, to be expenditure of a capital

nature incurred by the taxpayer:

(a) if the amount is paid before the grant of the production licence-at

the time of grant; and

(b) in any other case-at the time the payment is made.";

(b) by omitting from subparagraph (4) (b) (i) "the qualifying cash bidding

payment" and substituting "the permit cash bidding payment, or the aggregate

of the permit cash bidding payments, as the case requires, paid before the

relevant time";

"(4A) In this section:

(a) a reference to the Petroleum Act includes a reference to a

corresponding law of a State or the Northern Territory; and

(b) a reference to a specified provision or provisions of the Petroleum

Act includes a reference to the corresponding provision or provisions of the

corresponding law of a State or the Northern Territory.";

(d) by omitting "Petroleum (Submerged Lands) Act 1967" from the definitions

of "block", "exploration permit", "production licence" and "retention lease"

in subsection (6) and substituting "Petroleum Act";

(e) by omitting "qualifying" from the definition of "cash bidding

exploration permit" in subsection (6) and substituting "permit";

(f) by omitting from subsection (6) the definition of "qualifying cash

bidding payment";

(g) by inserting in subsection (6) the following definitions:

" 'licence cash bidding payment' means:

(a) any of the following amounts paid on or after 15 January 1986 in

respect of the grant of a production licence:

(i) a deposit referred to in paragraph 48 (1) (b) of the

Petroleum Act;

(ii) an amount paid as mentioned in paragraph 50 (b) of the

Petroleum Act;

(iii) an instalment paid by the registered holder of the

production licence under:

(A) an agreement entered into under section 109 of the

Petroleum Act; or

(B) subsection 109 (4) of that Act; or

(b) a deposit referred to in paragraph 48 (1) (b) of the Petroleum

Act that was paid before 15 January 1986 in respect of the grant of a

production licence, where none of the balance referred to in paragraph 50 (b)

of the Petroleum Act was paid before that date;

'permit cash bidding payment' means:

(a) any of the following amounts paid on or after 15 January 1986 in

respect of the grant of an exploration permit:

(i) an amount referred to in paragraph 22B (5) (b) of the

Petroleum Act;

(ii) a deposit referred to in paragraph 24 (1) (b) of the

Petroleum Act;

(iii) an amount paid as mentioned in paragraph 27 (b) of the

Petroleum Act;

(iv) an instalment paid by the registered holder of the

exploration permit under:

(A) an agreement entered into under section 109 of the Petroleum

Act; or

(B) subsection 109 (4) of that Act; or

(b) a deposit referred to in paragraph 24 (1) (b) of the Petroleum

Act that was paid before 15 January 1986 in respect of the grant of an

exploration permit, where none of the balance referred to in paragraph 27 (b)

of the Petroleum Act was paid before that date;

'Petroleum Act' means the Petroleum (Submerged Lands) Act 1967;".

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 22

Liability to withholding tax

22. Section 128B of the Principal Act is amended by omitting from paragraph

(3) (b) "paragraph 23 (x), or".

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 23

Associates

23. Section 159GZC of the Principal Act is amended by omitting from

sub-subparagraphs (1) (a) (v) (B), (1) (b) (iv) (B) and (1) (b) (v) (B) "more

than" and substituting "at least".

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 24

Australian-owned non-resident company

24. Section 159GZD of the Principal Act is amended:

(a) by omitting "not less than" (wherever occurring) and substituting "more

than";

(b) by omitting "or" from the end of paragraph (a) and substituting "and".

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 25

Foreign debt

25. Section 159GZF of the Principal Act is amended:

(a) by omitting paragraph (2) (b) and substituting the following

paragraph:

"(b) the interest is or will be, apart from this Division, allowable as

a deduction from the assessable income of the partnership of any year of

income; and";

(b) by omitting paragraph (3) (b) and substituting the following

paragraph:

"(b) the interest is or will be, apart from this Division, allowable as

a deduction from the assessable income of the trust estate of any year of

income; and".

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 26

Foreign equity

26. Section 159GZG of the Principal Act is amended:

(a) by omitting from subparagraph (1) (b) (i) "and";

(b) by inserting after subparagraph (1) (b) (i) the following

subparagraph:

"(ia) the company had no accumulated losses at that time; and";

(d) by inserting after sub-subparagraph (1) (c) (ii) (A) the following

sub-subparagraph:

"(AA) the company had no accumulated losses at that time; and";

(e) by omitting subsection (6);

(f) by inserting after subsection (5) the following subsections:

"(6) Subject to this section, where:

(a) in calculating the foreign equity of a company of a year of income,

there was taken into account under paragraph (1) (a) the paid-up value of:

(i) a share (in this subsection called the 'eligible share')

beneficially owned by a person who became the beneficial owner of the share:

(A) during the year of income; and

(B) otherwise than by acquisition from another person who,

immediately before the acquisition, was an insider in relation to the

company;

(ii) a share (in this subsection also called the 'eligible share')

that was beneficially owned at any time during the year of income by:

(A) an outsider in relation to the company; or

(B) an insider in relation to the company who became the beneficial

owner of the share during the year of income otherwise than by acquisition

from another person who, immediately before the acquisition, was an insider in

relation to the company; or

(iii) a share (in this subsection also called the 'eligible share')

where:

(A) neither subparagraph (i) nor subparagraph (ii) applies to the

share in relation to the year of income; and

(B) at some time during the year of income, the paid-up value of

the share was less than at the end of the year of income; and

(b) during the clawback period:

(i) the eligible share ceases to be beneficially owned by a person

(in this subsection called the 'former owner') in the following

circumstances:

(A) the former owner is an insider in relation to the company

immediately before ceasing to be beneficial owner;

(B) the former owner ceases to be beneficial owner otherwise than

by reason of having died;

by a disposal to a person who, immediately after the disposal, is an insider

in relation to the company; and

(D) the former owner does not, as a result of ceasing to be

beneficial owner of the eligible share, become entitled to receive a

distribution to which subparagraph (iii) applies;

(ii) in a case to which subparagraph (a) (i) or (ii) applies-an

amount is distributed out of a share premium account to, or for the benefit

of, an insider in satisfaction of an entitlement in respect of the eligible

share; or

(iii) an amount is distributed to, or for the benefit of, an insider

by way of repayment of money paid up on the eligible share (whether upon a

reduction of share capital, the cancellation or redemption of the eligible

share or otherwise);

the foreign equity of the company of the year of income shall be reduced

by whichever of the following amounts is applicable:

(i) or (ii)-the amount that was taken into account under paragraph (1) (a) as

the paid-up value of the eligible share increased by the amount (if any) that

was taken into account under paragraph (1) (b) in relation to the eligible

share;

(d) where subparagraph (b) (i) applies in relation to subparagraph (a)

(iii)-the difference between:

(i) the paid-up value of the eligible share at the end of the year

of income; and

(ii) the lowest paid-up value of the eligible share at any time

during the year of income;

(e) where subparagraph (b) (ii) or (iii) applies in relation to

subparagraph (a) (i) or (ii)-the amount distributed as mentioned in

subparagraph (b) (ii) or (iii);

(f) where subparagraph (b) (iii) applies in relation to subparagraph (a)

(iii)-the lesser of the following amounts:

(i) the difference between:

(A) the paid-up value of the eligible share at the end of the year

of income; and

(B) the lowest paid-up value of the eligible share at any time

during the year of income;

(ii) the amount distributed as mentioned in subparagraph (b) (iii).

"(7) The operation of subsection (6) in reducing the foreign equity of a

company of a year of income in relation to a particular share in the company

is subject to the following limits:

(a) the amount, or the total of the amounts, of the reduction shall not

exceed:

(i) if subparagraph (6) (a) (iii) applies-the difference referred to

in paragraph (6) (d); or

(ii) in any other case-the sum of:

(A) the amount that was taken into account under paragraph (1) (a) as

the paid-up value of the share; and

(B) the amount (if any) that was taken into account under paragraph

(1) (b) in relation to the share;

(b) the total amount applicable under paragraph (6) (d) in respect of 2

or more applications of that paragraph shall not exceed the difference

referred to in that paragraph;

or more applications of that paragraph shall not exceed the difference

referred to in subparagraph (6) (f) (i).

"(8) For the purposes of subsections (6) and (7):

(a) a reference to the distribution of an amount includes a reference

to the crediting of an amount or the distribution of property;

(b) 'clawback period', in relation to a company in relation to a year

of income, means the shorter of the following periods:

(i) the period of 2 years beginning at the end of the year of

income;

(ii) the period from the end of the year of income until there cease

to be any foreign controllers of the company;

share; (d) 'insider', in relation to a company, means a person who is a

foreign controller, or a non-resident associate of a foreign controller, of

the company; and

(e) 'outsider', in relation to a company, means a person (other than the

company) who is not:

(i) a foreign controller of the company; or

(ii) a non-resident associate of a foreign controller of the

company.

"(9) Where:

(a) apart from this subsection, there would be an amount of foreign

equity (in this subsection called the 'current equity amount') of a

partnership, trust estate or foreign investor of a year of income (in this

subsection called the 'current year of income');

(b) for the immediately preceding year of income:

(i) there is no amount of foreign equity in relation to the

partnership, trust estate or foreign investor (whether because of the

non-existence of the partnership, trust estate or foreign investor or for any

other reason); or

(ii) there is an amount of foreign equity (in this subsection called

the 'previous equity amount') in relation to the partnership, trust estate or

foreign investor that is less than the current equity amount;

and

(d) during the current year of income, the partnership, the trustee of

the trust estate or the foreign investor did not cease (other than

temporarily):

(i) in the case of a partnership-to derive assessable income of the

kind referred to in paragraph (3) (a);

(ii) in the case of the trustee of a trust estate-to derive

assessable income of the kind referred to in paragraph (4) (a); or

(iii) in the case of a foreign investor-to be a foreign investor;

the foreign equity of the partnership, trust estate or foreign investor of

the current year of income shall be taken to be (instead of the current equity

amount):

(e) if there is a previous equity amount-the greater of:

(i) the previous equity amount; and

(ii) the clawback period equity amount; or

(f) in any other case-the clawback period equity amount.

"(10) In subsection (9):

'clawback period equity amount', in relation to a partnership, trust

estate or foreign investor in relation to a year of income, means the amount,

or lowest amount, of foreign equity (including a nil amount) that is required

to be calculated for the purposes of this Division in relation to the

partnership, trust estate or foreign investor at any time or times during the

clawback period in relation to the year of income.

"(11) In subsections (9) and (10):

'clawback period', in relation to a partnership, trust estate or foreign

investor in relation to a year of income (in this subsection called the

'current year of income'), means the shorter of the following periods:

(a) the period commencing at the end of the current year of income

and ending:

(i) if:

(A) the current year of income is a part of a year of income (in

this subparagraph called the 'actual year of income'), being a part that is

required by section 159GZR to be treated as if it were the whole of a year of

income; and

(B) the current year of income ends before the actual year of

income;

2 years after the end of the actual year of income; or

(ii) in any other case-2 years after the end of the current year

of income;

(b) in the case of a partnership or trust estate-the period from the

end of the current year of income until:

(i) there cease to be any foreign controllers of the partnership

or trust estate; or

(ii) the partnership or the trustee of the trust estate ceases

(other than temporarily) to derive assessable income of the kind referred to

in paragraph (3) (a) or (4) (a), as the case may be;

whichever first happens;

current year of income until the foreign investor ceases (other than

temporarily) to be a foreign investor.".

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 27

Part year application of Division in certain circumstances

27. Section 159GZR of the Principal Act is amended:

(a) by omitting subsection (2);

(b) by adding at the end the following subsection:

"(2) In the application of this Division in accordance with subsection

(1) in relation to the parts of a year of income, subsections 159GZG (6) to

(11) (inclusive) shall not be applied in relation to a particular part if

there is a later part during which there were no foreign controllers of the

company, partnership or trust estate.".

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 28

Rebates for dependants

28. Section 159J of the Principal Act is amended:

(a) by omitting "family income supplement" from paragraph (a) and

subparagraph (b) (i) of the definition of "separate net income" in subsection

(6) and substituting "family allowance supplement";

(b) by omitting "handicapped child's allowance" from paragraph (a) and

subparagraph (b) (i) of the definition of "separate net income" in subsection

(6) and substituting "child disability allowance".

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 29

Rebate in respect of certain pensions

29. Section 160AAA of the Principal Act is amended:

(a) by omitting from subsection (2) "paid by way of";

(b) by inserting in paragraph (2) (aa) "paid by way of" before "income";

"(ab) received under:

(i) the scheme known as the Aboriginal Secondary Assistance Scheme;

or (ii) the scheme known as the Aboriginal Study Assistance Scheme;

(ac) paid by way of Formal Training Allowance;";

(d) by inserting in paragraphs (2) (a) and (b) "paid by way of" before "a

benefit".

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 30

Credits in respect of foreign tax

30. Section 160AF of the Principal Act is amended by inserting in

subsection (6) ", being foreign earnings within the meaning of section 23AG,"

after "derives foreign income".

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 31

Certain dividends deemed to be interest income

31. Section 160AFA of the Principal Act is amended:

(a) by omitting subsection (1) and substituting the following subsections:

"(1) A reference in this section to an accounting period of a foreign

company is a reference to:

(a) the first accounting period of the foreign company that ends after

30 June 1987; or

(b) a subsequent accounting period of the foreign company.

"(1A) For the purposes of this section, the relevant period in relation

to a foreign company is the first accounting period during which the company

derives net interest income amounting to at least 10% of its total profits

derived during that accounting period.";

(b) by omitting from subsection (2) all the words after "income derived"

and substituting the following words and paragraphs:

"during:

(a) the relevant period; and

(b) any subsequent accounting period in which the company derives net

interest income amounting to at least 10% of its total profits derived during

that subsequent accounting period;

reduced by the sum of any amounts deemed to be interest income by virtue

of subsection (3).".

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 32

Foreign underlying tax

32. Section 160AFC of the Principal Act is amended:

(a) by inserting in subsection (10) "of a foreign country" after "law"

(first occurring);

(b) by omitting from subsection (10) all the words after "being a law" and

substituting the following word and paragraphs:

"that imposes that tax because:

(a) the company is treated as a resident of that country for the

purposes of that law;

(b) the company is treated as domiciled in that country for the purposes

of that law; or

that country for the purposes of that law.";

"(11) A reference in subsection (10) to a foreign country includes a

reference to any part of, or place in, that country.".

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 33

Losses of previous years

33. Section 160AFD of the Principal Act is amended:

(a) by inserting after subsection (6) the following subsection:

"(6A) For the purposes of this section, the following provisions shall be

disregarded:

(a) section 79D;

(b) paragraph 23 (q) as in force at any time before the commencement of

the Taxation Laws Amendment (Foreign Tax Credits) Act 1986;

1988.";

(b) by omitting "a permanent establishment" from paragraph (a) of the

definition of "foreign source" in subsection (7) and substituting "one or more

permanent establishments".

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 34

Transfer of excess credit within company group

34. Section 160AFE of the Principal Act is amended:

(a) by omitting from paragraphs (1) (a) and (b) "a company" and

substituting "an Australian company";

(b) by omitting subsection (10).

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 35

Amendment of determinations

35. Section 160AK of the Principal Act is amended:

(a) by inserting in subsections (2) and (3) "after the end of 3 years after

the original determination date" after "shall not be made";

(b) by adding at the end the following subsection:

"(6) In this section:

'original determination date', in relation to a determination, means:

(a) in the case of a determination other than an amended

determination-the date on which the determination was made; or

(b) in the case of an amended determination-the date on which the

original determination was made;".

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 36

Other interpretative provisions

36. Section 160K of the Principal Act is amended:

(a) by omitting ", (jaa) and (x)" from paragraph (a) of the definition of

"relevant exempting provision" in subsection (1) and substituting "and

(jaa)";

(b) by inserting after paragraph (b) of the definition of "relevant

exempting provision" in subsection (1) the following paragraph:

"(baa) paragraph 23 (x) as in force at any time before the commencement

of section 1 of the Taxation Laws Amendment Act (No. 2) 1988;";

exempting provision" in subsection (1) the following paragraph:

"(bc) regulations under the International Organizations (Privileges and

Immunities) Act 1963, insofar as those regulations provide that an

organisation is not liable to income tax;".

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 37

Certificate of sources of information

37. Section 165 of the Principal Act is amended by inserting after

subsection (1A) the following subsection:

"(1B) The agent's certificate shall, for the purposes of this Act, be deemed

to be duly signed, in the case of a natural person who is registered as a tax

agent under Part VIIA, if, and only if:

(a) it is signed by the natural person; or

(b) it is signed in the name of the natural person by another person who is

registered as a nominee of the natural person for the purposes of that Part,

and that other person's name is also appended.".

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 38

Interpretation

38. Section 221A of the Principal Act is amended:

(a) by omitting "or" from the end of paragraph (m) of the definition of

"salary or wages" in subsection (1);

(b) by inserting after paragraph (n) of the definition of "salary or wages"

in subsection (1) the following paragraphs:

"(na) under the scheme known as the Aboriginal Secondary Assistance

Scheme in respect of a period commencing at or after the time the student

concerned attained the age of 16 years; or

(nb) under the scheme known as the Aboriginal Study Assistance Scheme;".

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 39

39. Before section 251A of the Principal Act the following heading is

inserted in Part VIIA:

"Division 1-Interpretation".

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 40

Interpretation

40. Section 251A of the Principal Act is amended by inserting the following

definitions:

" 'approved form' means a form approved in writing by the Board concerned

for the purposes of the provision in which the expression appears;

'authorised trustee company' means a company that is authorised by or under

a law of the Commonwealth, a State or a Territory to act as an executor,

administrator and trustee;

'conviction', in relation to a person, in relation to an offence, includes

the making of an order under section 19B of the Crimes Act 1914 in relation to

the person in respect of the offence;

'executive officer', in relation to a company, means:

(a) a director of the company;

(b) a secretary of the company; or

part in, the management of the company;

'serious taxation offence' means:

(a) an offence against section 29D or 86A of the Crimes Act 1914, being

an offence that relates to a tax liability within the meaning of the Taxation

Administration Act 1953;

(b) an offence against:

(i) section 6, 7 or 7A of the Crimes Act 1914; or

(ii) subsection 86 (1) of that Act by virtue of paragraph (a) of that

subsection;

being an offence that relates to an offence of a kind referred to in

paragraph (a) of this definition; or

(i) a taxation offence within the meaning of Part III of the

Taxation Administration Act 1953; and

(ii) punishable on conviction by either or both of the following:

(A) a fine exceeding $2,000;

(B) imprisonment;".

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 41

41. After section 251B of the Principal Act the following sections and

heading are inserted:

Companies in which qualified directors have a substantial interest

"251BA. (1) For the purposes of this Part, a company shall be taken to be a

company in which qualified directors have a substantial interest if:

(a) shares in the company carrying between them the right to exercise not

less than 25 per cent of the voting power in the company are beneficially

owned by a director who, or by directors each of whom, is a fit and proper

person to prepare income tax returns and transact business on behalf of

taxpayers in income tax matters; and

(b) the voting power in the company, to the extent to which it relates to

those shares, is not controlled, or capable of being controlled, by a person

or persons other than the director or directors concerned.

"(2) A reference in subsection (1) to control of the voting power in a

company is a reference to control that is direct or indirect and includes a

reference to control that is exercisable as a result or by means of

arrangements or practices:

(a) whether or not having legal or equitable force; and

(b) whether or not based on legal or equitable rights.

Non-exempt companies

"251BB. For the purposes of this Part, a company shall be taken to be a

non-exempt company as at a particular time unless either of the following

paragraphs applies:

(a) all of the following conditions are satisfied:

(i) the company was registered as a tax agent immediately before the

commencement of section 39 of the Taxation Laws Amendment Act (No. 2) 1988;

(ii) the company was registered as a tax agent at all times after that

commencement and before that time;

(iii) at all times after that commencement and before that time, shares

in the company carrying between them:

(A) the right to exercise more than one-half of the voting power in

the company;

(B) the right to receive more than one-half of any dividends that may

be paid by the company; and

capital of the company;

were beneficially owned by persons who, immediately before that

commencement, beneficially owned shares in the company carrying between them

rights of those kinds;

(b) the company is an authorised trustee company.

Fit and proper persons to prepare income tax returns

"251BC. (1) Without limiting the generality of an expression used in this

Part, but subject to this section, a person is not a fit and proper person to

prepare income tax returns and transact business on behalf of taxpayers in

income tax matters, as at a particular time, if:

(a) the person is not a natural person;

(b) both of the following conditions are satisfied:

(i) the person was not registered as a tax agent, or as a nominee, for

the purposes of this Part immediately before the commencement of section 39 of

the Taxation Laws Amendment Act (No. 2) 1988;

(ii) the person does not hold such qualifications (whether academic, by

way of experience or otherwise) as are prescribed;

(d) the person is not of good fame, integrity and character;

(e) the person has been convicted of a serious taxation offence during the

previous 5 years; or

(f) the person is under sentence of imprisonment for a serious taxation

offence.

"(2) Nothing in paragraph (1) (e) or (f) limits the generality of paragraph

(1) (d).

"(3) Where:

(a) a Board is required, in considering an application for:

(i) re-registration as a tax agent; or

(ii) re-registration of a nominee of a tax agent;

to decide whether the Board is satisfied that a particular person is a fit

and proper person to prepare income tax returns and transact business on

behalf of taxpayers in income tax matters;

(b) the person is not under sentence of imprisonment for a serious taxation

offence; and

(i) a conviction of the person;

(ii) the doing of an act or thing by the person; or

(iii) an omission of the person;

should be disregarded; the Board may, in making the decision referred to

in paragraph (a), disregard the conviction, the doing of the act or thing or

the omission, as the case requires.

"(4) For the purposes of this section:

(a) a person who has been released from serving a part of a sentence of

imprisonment on parole or upon licence to be at large shall be taken to be

under sentence of imprisonment during any period during which action can be

taken by way of requiring the person to serve the whole or a part of the

remainder of that sentence; and

(b) a person who has been released by a court from serving the whole or a

part of a sentence of imprisonment upon the person giving a good behaviour

security shall be taken to be under sentence of imprisonment during any period

during which action can be taken for a breach of a condition of that security.

"(5) A reference in subsection (4) to a good behaviour security given by a

person is a reference to a security given by the person, with or without

sureties, by recognizance or otherwise, that the person will comply with

conditions relating to his or her behaviour.

"Division 2-Tax Agents' Boards".

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 42

Constitution of Boards

42. Section 251D of the Principal Act is amended:

(a) by omitting paragraphs (1)(a), (b) and (c) and substituting the

following paragraphs:

"(a) an officer of the Australian Taxation office appointed by the

Minister; and

(b) 2 other persons appointed by the Minister.";

(b) by inserting after subsection (1) the following subsection:

"(1A) The Minister shall appoint as Chairperson one of the persons

referred to in paragraph (1) (b).";

"(3) A member of a Board holds office on a part-time basis.".

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 43

43. After section 251D of the Principal Act the following section is

inserted:

Remuneration and allowances

"251DA. (1) A member of a Board shall be paid such remuneration as is

determined by the Remuneration Tribunal.

"(2) A member shall be paid such allowances as are prescribed.

"(3) This section has effect subject to the Remuneration Tribunals Act

1973.".

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 44

Conduct of business of Board

44. Section 251E of the Principal Act is amended by omitting paragraphs (c)

and (d) and substituting the following paragraphs:

"(c) if the Chairperson is not present-the members present shall elect one

of their number to preside; and

(d) the Chairperson or member presiding shall have a deliberative, but not

a casting, vote.".

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 45

45. Before section 251J of the Principal Act the following headings are

inserted:

"Division 3-Registration of Tax Agents

"Subdivision A-Original Registration of Tax Agents".

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 46

Applications for original registration of tax agents

46. Section 251J of the Principal Act is amended:

(a) by omitting from subsection (2) "$2" and substituting "$80, or such

higher fee as is prescribed";

(b) by omitting subsections (3) to (12) (inclusive) and substituting the

following subsection:

"(3) An application shall be in the approved form and shall be

accompanied by such information as is required by the form to be provided.".

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 47

47. Section 251JA of the Principal Act is repealed and the following

sections and headings are substituted:

Original registration of tax agents

"251JA. (1) The Board shall register the applicant as a tax agent if the

applicant satisfies the Board that:

(a) if the applicant is a natural person:

(i) the applicant is a fit and proper person to prepare income tax

returns and transact business on behalf of taxpayers in income tax matters;

and

(ii) the applicant is not an undischarged bankrupt;

(b) if the applicant is a partnership:

(i) a partner specified in the application as the original nominee of

the partnership is a fit and proper person to prepare income tax returns and

transact business on behalf of taxpayers in income tax matters;

(ii) in the case of each partner who is a natural person-the partner:

(A) has attained the age of 18 years at the date on which the

application is made; and

(B) is of good fame, integrity and character;

(iii) in the case of each partner that is a company-each executive

officer of the company:

(A) has attained the age of 18 years at the date on which the

application is made; and

(B) is of good fame, integrity and character; and

(iv) there is no partner who is an undischarged bankrupt; or

(i) a person employed by the company and specified in the application

as the original nominee of the company is a fit and proper person to prepare

income tax returns and transact business on behalf of taxpayers in income tax

matters;

(ii) each executive officer of the company:

(A) has attained the age of 18 years at the date on which the

application is made; and

(B) is of good fame, integrity and character;

(iii) except where the company is an authorised trustee company-the

company is a company in which qualified directors have a substantial interest;

and

(iv) the company has not gone into liquidation.

"(2) The Board shall refuse to register the applicant in any other case.

"(3) Where a Board makes a decision refusing to register an applicant as a

tax agent, the Board shall cause to be served on the applicant a notice in

writing setting out that decision and giving the reasons for that decision.

"Subdivision B-Re-registration of Tax Agents

Applications for re-registration of tax agents

"251JB. (1) A registered tax agent may apply to the Board by which the tax

agent was registered for re-registration.

"(2) An application shall be accompanied by a lodgment fee of $40, or such

higher fee as is prescribed, which the Board shall pay to the Commissioner.

"(3) An application shall be in the approved form and shall be accompanied

by such information as is required by the form to be provided.

"(4) An application for re-registration as a tax agent shall be made:

(a) during the period:

(i) commencing 60 days before; and

(ii) ending 30 days before;

the day on which the existing registration ceases to be in force; or

(b) if the Board, on request in writing made by the tax agent, allows the

application to be made at a later time but before the existing registration

ceases to be in force-before that later time.

"(5) Where a Board makes a decision refusing to allow a later time for the

making of an application for re-registration, the Board shall cause to be

served on the applicant a notice in writing setting out that decision and

giving the reasons for that decision.

Re-registration of tax agents

"251JC. (1) The Board shall re-register the applicant as a tax agent if the

applicant satisfies the Board that:

(a) if the applicant is a natural person:

(i) the applicant is a fit and proper person to prepare income tax

returns and transact business on behalf of taxpayers in income tax matters;

and

(ii) the applicant is not an undischarged bankrupt;

(b) if the applicant is a partnership:

(i) a partner specified in the application as the original nominee of

the partnership is a fit and proper person to prepare income tax returns and

transact business on behalf of taxpayers in income tax matters;

(ii) in the case of each partner who is a natural person-the partner:

(A) has attained the age of 18 years at the date on which the

application is made; and

(B) is of good fame, integrity and character;

(iii) in the case of each partner that is a company-each executive

officer of the company:

(A) has attained the age of 18 years at the date on which the

application is made; and

(B) is of good fame, integrity and character; and

(iv) there is no partner who is an undischarged bankrupt;

(i) a person employed by the company and specified in the application

as the original nominee of the company is a fit and proper person to prepare

income tax returns and transact business on behalf of taxpayers in income tax

matters;

(ii) each executive officer of the company:

(A) has attained the age of 18 years at the date on which the

application is made; and

(B) is of good fame, integrity and character;

(iii) if the company is a non-exempt company-the company is a company in

which qualified directors have a substantial interest; and

(iv) the company has not gone into liquidation; and

(d) in all cases-the applicant has not permanently ceased to carry on

business as a tax agent.

"(2) The Board shall refuse to re-register the applicant in any other case.

"(3) Where a Board makes a decision refusing to re-register an applicant as

a tax agent, the Board shall cause to be served on the applicant a notice in

writing setting out that decision and giving the reasons for that decision.

"(4) Where:

(a) a Board makes a decision refusing to re-register an applicant as a tax

agent; and

(b) notice of that decision was served on the applicant at a time (in this

subsection called the 'notice time') after the time (in this subsection called

the 'expiry time') when the existing registration ceased to be in force; the

applicant shall be taken to have been registered as a tax agent during the

period commencing at the expiry time and ending at the notice time.

"Subdivision C-Effect of Changes in Constitution of Partnerships

Registration of a partnership terminated if constitution changes

"251JD. Where:

(a) a partnership is registered as a tax agent; and

(b) there is a change in the constitution of the partnership; the

registration shall be taken to be terminated at the time of that change.

"Subdivision D-Changes in Constitution of Partnerships-Registration of

Successor Tax Agents

Applications for registration of successor tax agents

"251JE. (1) Where:

(a) the registration of a partnership (in this section called the 'original

partnership') is terminated because of section 251JD;

(b) the registration of the original partnership was not suspended

immediately before the termination; and

particular natural person:

(i) the person was a partner, and a registered nominee, of the original

partnership immediately before the termination;

(ii) the person is not an undischarged bankrupt; the person may apply to

a Board for registration as a tax agent.

"(2) Where:

(a) the registration of a partnership (in this section also called the

'original partnership') is terminated because of section 251JD;

(b) the registration of the original partnership was not suspended

immediately before the termination; and

partnership (in this section called the 'new partnership'):

(i) a partner was a partner, and a registered nominee, of the original

partnership immediately before the termination;

(ii) there is no partner who is an undischarged bankrupt; the new

partnership may apply to a Board for registration as a tax agent.

"(3) An application shall be in the approved form and shall be accompanied

by such information as is required by the form to be provided.

"(4) Subject to subsection (9), an application shall be made within 30 days

after the termination of the registration of the original partnership.

"(5) An application by a natural person may specify, as the original nominee

or original nominees of the natural person, a person who, or persons each of

whom:

(a) was a registered nominee of the original partnership immediately before

the termination; and

(b) is an employee of the natural person.

"(6) An application made by a new partnership shall specify, as an original

nominee of the partnership, a partner of the kind referred to in subparagraph

(2) (c) (i).

"(7) An application made by a new partnership may specify, as an additional

original nominee or original nominees of the partnership, a person who, or

persons each of whom:

(a) was a registered nominee of the original partnership immediately before

the termination; and

(b) is a partner, or an employee, of the new partnership.

"(8) Where:

(a) a Board receives a document purporting to be an application made in

accordance with this section; and

(b) the Board is of the opinion that the document is not an application

made in accordance with this section; the Board shall cause to be served on

the person who lodged the document a notice in writing setting out that

opinion.

"(9) Where:

(a) a Board causes to be served a notice under subsection (8) relating to a

document purporting to be an application made in accordance with this section

in consequence of a change in the constitution of the original partnership;

(b) the purported application was made within 30 days after the termination

of the registration of the original partnership; and

of 21 days after the termination of the registration of the original

partnership; the person who made the purported application may make an

application under this section in consequence of the change in the

constitution of the original partnership within 7 days after the day of

service of the notice under subsection (8).

Registration of successor

"251JF. The Board shall register the applicant as a tax agent within 60 days

after receiving the application.

"Subdivision E-Duration of Registration of Tax Agents

Registration of tax agents to be in force for 3 years

"251JG. (1) The registration of a tax agent granted by a Board comes into

force, or shall be deemed to have come into force, as the case requires:

(a) if the registration was granted under section 251JA-on the day on which

it was granted;

(b) if the registration was granted under section 251JC by way of the

re-registration of an existing registration-immediately after the existing

registration ceases or ceased to be in force; or

change in the constitution of a partnership:

(i) if the tax agent is a natural person-immediately after that change;

(ii) if the tax agent is a partnership (in this subparagraph called the

'new partnership')-immediately after whichever of the following times is the

later:

(A) the time of that change;

(B) the time of the formation of the new partnership.

"(2) The registration of a tax agent granted by a Board under section 251JA

or 251JC shall, unless terminated, cancelled or surrendered under this Act,

continue in force for a period of 3 years.

"(3) The registration of a tax agent granted by a Board under section 251JF

in consequence of a change in the constitution of a partnership shall, unless

terminated, cancelled or surrendered under this Act, continue in force until

the end of the period (including a period that is applicable because of one or

more applications of this subsection) during which the registration of the

partnership would have been in force if it had not been terminated because of

section 251JD.

"Subdivision F-Surrender of Registration of Tax Agents

Surrender of registration

"251JH. A person or partnership that is registered as a tax agent may, by

notice in writing to the Board by which the tax agent was registered,

surrender that registration.

"Subdivision G-Termination of Registration of Tax Agents other than

Partnerships

Death of natural person

"251JK. The registration of a natural person as a tax agent terminates on

death.

Companies ceasing to exist

"251JM. The registration of a company as a tax agent terminates upon the

company ceasing to exist.

"Subdivision H-Cancellation or Suspension of Registration of Tax Agents".

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 48

Cancellation or suspension of registration of tax agents

48. Section 251K of the Principal Act is amended:

(a) by omitting subsections (1) and (1A) and substituting the following

subsection:

"(1) Where a Board is satisfied that a tax agent, or a registered nominee

of a tax agent, has been convicted of:

(a) an offence against section 8P, 8T or 8U of the Taxation

Administration Act 1953; or

(b) an offence against:

(i) section 6, 7 or 7A of the Crimes Act 1914; or

(ii) subsection 86 (1) of that Act by virtue of paragraph (a) of that

subsection;

being an offence that relates to an offence of the kind referred to in

paragraph (a) of this subsection;

the Board shall suspend or cancel the registration of the tax agent.";

(b) by omitting from subsection (1B) "(1A)" and substituting "(1)";

(d) by adding at the end of subparagraph (2) (b) (i) "or";

(e) by omitting subparagraph (2) (b) (iii);

(f) by omitting paragraph (2) (c) and substituting the following

paragraphs:

"(c) a registered nominee of the tax agent is not a fit and proper

person to prepare income tax returns and transact business on behalf of

taxpayers in income tax matters;

(d) if the tax agent is a natural person-the tax agent is not a fit and

proper person to prepare income tax returns and transact business on behalf of

taxpayers in income tax matters;

(e) if the tax agent is a partnership:

(i) in the case of a partner who is a natural person-the partner:

(A) has not attained the age of 18 years; or

(B) is not of good fame, integrity and character; or

(ii) in the case of a person who is an executive officer of a partner

that is a company-the person:

(A) has not attained the age of 18 years; or

(B) is not of good fame, integrity and character; or

(f) if the tax agent is a company-an executive officer of the company:

(i) has not attained the age of 18 years; or

(ii) is not of good fame, integrity and character.";

(g) by omitting subsections (2A) and (3) and substituting the following

subsections:

"(3) If the registration of a tax agent is not already suspended, a

suspension of the registration of the tax agent shall be for such period as

the Board concerned thinks fit.

"(3A) If the registration of a tax agent is already suspended, a

suspension of the registration of the tax agent shall be for such further

period as the Board concerned thinks fit, being a period commencing at the end

of the period for which the registration of the tax agent is already

suspended.

"(3B) The period, or further period, of a suspension under subsection (1)

shall not be less than 3 months.

"(3C) A Board shall cancel the registration of a tax agent who is a

natural person if:

(a) the person becomes an undischarged bankrupt; or

(b) the person permanently ceases to carry on business as a tax agent.

"(3D) A Board shall cancel the registration of a tax agent that is a

non-exempt company if the company ceases to be a company in which qualified

directors have a substantial interest.";

(h) by omitting paragraphs (4) (a) and (b) and substituting the following

paragraphs:

"(a) in a case where the tax agent is a partnership:

(i) if there is no partner registered as a nominee in respect of the

tax agent; or

(ii) if any partner becomes an undischarged bankrupt;

(b) in a case where the tax agent is a company:

(i) if there is no nominee registered in respect of the tax agent;

(ii) if the company goes into liquidation; or";

(j) by omitting from paragraph (4) (c) "it" and substituting "the tax

agent";

(k) by omitting subsections (5) to (10) (inclusive) and substituting the

following subsections:

"(5) Where a Board makes a decision suspending or cancelling the

registration of a tax agent, the Board shall cause to be served on the tax

agent a notice in writing setting out that decision and giving the reasons for

that decision.

"(6) A person or partnership whose registration as a tax agent is

suspended shall, except for the purposes of section 251BB or 251BC, Division

3, 4 or 6 or section 251Q, be taken not to be registered as a tax agent while

that registration remains suspended.

"(7) A suspension of the registration of a tax agent continues

notwithstanding that, during the period of suspension, the tax agent is

re-registered.".

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 49

49. After section 251K of the Principal Act the following headings and

sections are inserted:

"Division 4-Registration of Nominees of Tax Agents

Original nominee to be registered as a nominee

"251KA. (1) Where a partnership or company is registered by a Board as a tax

agent under section 251JA or 251JC, the person specified in the application

for registration or re-registration as the original nominee of the partnership

or company, as the case may be, shall be registered by the Board as a nominee

of the tax agent for the purposes of this Part.

"(2) Where a partnership or company is registered as a tax agent during a

particular period because of subsection 251JC (4), the person specified in the

application for re-registration as the original nominee of the partnership or

company, as the case may be, shall be taken to have been registered as a

nominee of the tax agent for the purposes of this Part during that period.

"(3) Where a person or partnership is registered as a tax agent under

section 251JF, the person or each of the persons specified in the application

for registration as the original nominee or as the original nominees of the

person or partnership, as the case may be, shall be registered by the Board

concerned as a nominee of the tax agent for the purposes of this Part.

Applications for registration or re-registration of nominees

"251KB. (1) A person or partnership may, in an application made for the

purpose, request a Board to register or re-register, as a nominee of the

person or partnership for the purposes of this Part:

(a) in the case of a partnership-a partner or an employee of the

partnership; or

(b) in the case of a natural person or company-an employee of the person or

company.

"(2) An application shall be accompanied by a lodgment fee of:

(a) if the proposed nominee is not already registered as a nominee of the

person or partnership-$80, or such higher fee as is prescribed; or

(b) if the proposed nominee is already registered as a nominee of the

person or partnership-$5, or such higher fee as is prescribed; which the Board

shall pay to the Commissioner.

"(3) An application shall be in the approved form and shall be accompanied

by such information as is required by the form to be provided.

"(4) An application for re-registration as a nominee of a tax agent shall be

made:

(a) during the period:

(i) commencing 60 days before; and

(ii) ending 30 days before;

the day on which the existing registration ceases to be in force; or

(b) if the Board, on request in writing made by the tax agent, allows the

application to be made at a later time but before the existing registration

ceases to be in force-before that later time.

"(5) Where a Board makes a decision refusing to allow a later time for the

making of an application for re-registration, the Board shall cause to be

served on the applicant and on the proposed nominee a notice in writing

setting out that decision and giving the reasons for that decision.

Registration and re-registration of nominees of tax agents

"251KC. (1) The Board shall register or re-register the proposed nominee as

a nominee of the tax agent for the purposes of this Part if the Board is

satisfied that the proposed nominee is a fit and proper person to prepare

income tax returns and transact business on behalf of taxpayers in income tax

matters.

"(2) The Board shall refuse to register or re-register the proposed nominee

in any other case.

"(3) Where the Board makes a decision refusing to register or re-register a

proposed nominee, the Board shall cause to be served on the applicant and on

the proposed nominee a notice in writing setting out that decision and giving

the reasons for that decision.

"(4) Where:

(a) a Board makes a decision refusing to re-register a proposed nominee as

a nominee of a tax agent;

(b) notice of that decision was served on the proposed nominee at a time

(in this subsection called the 'notice time') after the time (in this

subsection called the 'expiry time') when the existing registration ceased to

be in force; and

(which whole or part is in this subsection called the 'post-expiry period')

commencing at the expiry time and ending at the notice time; the proposed

nominee shall be taken to have been registered as a nominee of the tax agent

during the post-expiry period.

Duration of registration of nominees

"251KD. (1) The registration of a nominee granted by a Board comes into

force, or shall be deemed to have come into force, as the case requires:

(a) if the registration was granted by way of the re-registration of an

existing registration-immediately after the existing registration ceases or

ceased to be in force;

(b) if the registration was granted under section 251KA-at the time when

the registration of the tax agent concerned came or comes into force; or

"(2) A person ceases to be a registered nominee of a tax agent if:

(a) in a case where the tax agent is a natural person-the nominee ceases to

be an employee of the tax agent;

(b) in a case where the tax agent is a partnership-there comes a time when

the nominee is neither a member of the partnership nor an employee of the

partnership;

employee of the company;

(d) the tax agent notifies the Board by which it was registered that the

tax agent no longer desires that person to be its nominee;

(e) the registration of the nominee is cancelled;

(f) the nominee dies; or

(g) the registration of the tax agent is terminated, cancelled, surrendered

or otherwise ceases to be in force.

Cancellation of registration of nominees

"251KE. (1) A Board may cancel the registration of a nominee of a tax agent

if the Board is satisfied that the nominee is not a fit and proper person to

prepare income tax returns and transact business on behalf of taxpayers in

income tax matters.

"(2) Where a Board makes a decision cancelling the registration of a nominee

of a tax agent, the Board shall cause to be served on the tax agent and on the

nominee a notice in writing setting out that decision and giving the reasons

for that decision.

"Division 5-Refund of Lodgment Fees

Refund of lodgment fees if application withdrawn

"251KF. Where:

(a) an application under section 251J, 251JB or 251KB is withdrawn; and

(b) the application was neither granted nor refused before the withdrawal;

the Commissioner shall refund the lodgment fee paid in respect of the

application.

"Division 6-Notification Obligations of Tax Agents etc.

Tax agents who are natural persons

"251KG. A natural person who is registered as a tax agent shall forthwith

notify the Board by which the tax agent was registered if:

(a) the person becomes an undischarged bankrupt;

(b) the person permanently ceases to carry on business as a tax agent; or

of this Part ceases to be employed by the tax agent.

Penalty: $500.

Tax agents that are partnerships

"251KH. A partnership that is registered as a tax agent shall forthwith

notify the Board by which it was registered if:

(a) a partner becomes an undischarged bankrupt;

(b) a person becomes an executive officer of a partner that is a company;

purposes of this Part and was employed by the partnership at the time the

person was last registered as a nominee ceases to be employed by the

partnership; or

(d) the partnership permanently ceases to carry on business as a tax

agent.

Penalty: $500.

Changes in the constitution of partnerships

"251KJ. (1) Where:

(a) a partnership is registered as a tax agent; and

(b) there is a change in the constitution of the partnership; each person

who was a partner immediately before the change shall forthwith notify the

Board by which the tax agent was registered.

"(2) A person who was a partner in a partnership immediately before a change

in the constitution of the partnership is not guilty of an offence against

subsection (1) in relation to that change if another person who was a partner

in the partnership immediately before that change complies with subsection

(1).

Penalty: $500.

Tax agents that are companies

"251KK. (1) A company that is registered as a tax agent shall forthwith

notify the Board by which it was registered if:

(a) the company goes into liquidation;

(b) any person who is a nominee of the company for the purposes of this

Part ceases to be employed by the company;

(d) the company permanently ceases to carry on business as a tax agent.

"(2) A registered tax agent that is a non-exempt company shall forthwith

notify the Board if it has reasonable grounds to believe that the company has

ceased to be a company in which qualified directors have a substantial

interest. Penalty: $500.

"Division 7-Privileges and Duties of Registered Tax Agents".

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 50

Preparation of returns etc. on behalf of registered tax agents

50. Section 251N of the Principal Act is amended:

(a) by inserting in subsection (2) "registered" before "nominee";

(b) by inserting after subsection (2) the following subsection:

"(2A) A natural person who is registered as a tax agent shall not allow

any person to do anything specified in paragraph (1) (a) or (b) except under

the supervision and control of:

(a) the tax agent; or

(b) a registered nominee of the tax agent.

Penalty: $1,000.".

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 51

Advertising etc. by persons other than registered tax agents

51. Section 251O of the Principal Act is amended:

(a) by omitting "A person" and substituting "Subject to this section, a

person";

(b) by adding at the end the following subsection:

"(2) Paragraph (1) (b) does not apply in relation to advertising that

relates to acts or things done or to be done:

(a) by a solicitor or counsel acting in the course of his or her

profession:

(i) in the preparation of an objection;

(ii) in litigation or proceedings before a board, the Tribunal or a

court; or

(iii) in an advisory capacity in connection with the preparation of

an income tax return or with any income tax matter; or

(b) by a person providing services on a voluntary basis under a scheme

approved by the Commissioner by notice published in the Gazette.".

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 52

52. Before section 251P of the Principal Act the following heading is

inserted:

"Division 8-Miscellaneous".

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 53

53. After section 251Q of the Principal Act the following sections are

inserted in Part VIIA:

Review of decisions

"251QA. Applications may be made to the Tribunal for review of the following

decisions of a Board:

(a) a decision refusing to register a person or a partnership as a tax

agent (not being a decision under Subdivision D of Division 3);

(b) a decision refusing to re-register a tax agent;

application for re-registration as a tax agent;

(d) a decision to suspend or cancel the registration of a tax agent;

(e) a decision refusing to register a person as a nominee of a tax agent;

(f) a decision refusing to re-register a person as a nominee of a tax

agent;

(g) a decision refusing to allow a later time for the making of an

application for re-registration as a nominee of a tax agent;

(h) a decision to cancel the registration of a nominee of a tax agent.

Statements to accompany notification of decisions

"251QB. (1) Where a decision of a kind referred to in section 251QA is made

and notice in writing of the decision is given to a person affected by the

decision, that notice shall include a statement to the effect that a person

whose interests are affected by the decision may, subject to the

Administrative Appeals Tribunal Act 1975, if dissatisfied with the decision,

make application to the Tribunal for review of the decision.

"(2) Any failure to comply with subsection (1) does not affect the validity

of the decision.".

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 54

Amendments consequential on renumbering of the Social Security Act 1947

54. The Principal Act is amended as set out in the Schedule.

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 55

Application of amendments

55. (1) In this section:

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

(2) The amendments made by section 13, subsection 14 (1), section 17,

sections 30 to 34 (inclusive) and paragraphs 26 (e) and 27 (a) apply to

assessments in respect of income of the year of income commencing on 1 July

1987 and of all subsequent years of income.

(3) The amendments made by section 8, paragraph 10 (a), subsection 14 (2),

sections 16, 23, 24 and 25, paragraphs 26 (a), (b), (c), (d) and (f) and 27

(b) and section 35 apply to assessments in respect of income of the year of

income commencing on 1 July 1988 and of all subsequent years of income.

(4) The amendment made by paragraph 10 (b) applies to amounts received on or

after the date of commencement of this subsection.

(5) In determining the meaning of the expression "the person who received

the benefit" in sub-subparagraph 23 (z) (v) (B), subparagraph 23 (z) (vi),

sub-subparagraph 23 (zaa) (i) (B) or subparagraph 23 (zaa) (ii) of the

Principal Act, when used in relation to an amount received before the

commencement of this subsection, the amendments made by this Part shall be

disregarded.

(6) The amendments made by paragraphs 10 (c) to (g) (inclusive) apply in

relation to income received in respect of a period commencing on or after 1

January 1988.

(7) The amendment made by paragraph 12 (a) applies to payments under the

Social Security Act 1947 made in respect of a fortnightly period that

commences on or after the date of commencement of this subsection.

(8) The amendment made by paragraph 12 (b) applies to assessments in respect

of income of the year of income in which 5 June 1987 occurred and of all

subsequent years of income.

(9) The amendments made by section 18 and paragraphs 19 (c) and (d) and 36

the organisation commencing on 1 July 1988 and in relation to all subsequent

years of income.

(10) The amendment made by paragraph 28 (a) applies in relation to a payment

under the Social Security Act 1947 that fell or falls due on or after 17

December 1987.

(11) The amendment made by paragraph 28 (b) applies to a payment under the

Social Security Act 1947 that fell or falls due on or after 15 November 1987.

(12) Paragraph 160AAA (2) (ab) of the amended Act applies to assessments in

respect of income of the year of income commencing on 1 July 1988 and of all

subsequent years of income.

(13) Paragraph 160AAA (2) (ac) of the amended Act applies to assessments in

respect of income of the year of income commencing on 1 July 1987 and of all

subsequent years of income.

(14) The amendments made by section 38, insofar as they have effect for the

purposes of Division 6AA of Part III of the amended Act, apply to payments

made in respect of any period commencing on or after 1 January 1988.

(15) The persons holding office as members of a Tax Agents' Board

immediately before the commencement of this subsection shall, on the

commencement of this subsection, cease to hold office.

(16) A person or partnership whose registration as a tax agent under Part

VIIA of the Principal Act was in force immediately before the commencement of

this subsection (including a tax agent whose registration is suspended) shall

be deemed, for the purposes of Part VIIA of the amended Act, to have been

registered under section 251JA of the amended Act immediately after the

commencement of this subsection.

(17) Notwithstanding the repeals of section 251JA and subsection 251K (2A)

of the Principal Act effected by this Part, that section and subsection of

that Act continue to apply, after the commencement of this subsection, in

relation to a tax agent whose registration was in force on

1 April 1988 (including a tax agent whose registration was suspended on that

date), as if those repeals had not been effected.

(18) Notwithstanding section 251JG of the amended Act, the registration of a

tax agent referred to in subsection (16) of this section shall cease to be in

force on 1 April 1989, unless sooner:

(a) cancelled:

(i) under that Act; or

(ii) under subsection 251K (2A) of the Principal Act in its application

by virtue of subsection (17) of this section; or

(b) terminated or surrendered under the amended Act.

(19) Any suspension of the registration of a tax agent referred to in

subsection (16) of this section that was in effect under subsection 251K (1A)

of the Principal Act immediately before the commencement of this subsection

shall be deemed, for the purposes of Part VIIA of the amended Act, to have

continued in effect under subsection 251K (1) of the amended Act.

(20) A person whose registration as a nominee of a tax agent for the

purposes of Part VIIA of the Principal Act was in force immediately before the

commencement of this subsection shall be deemed, for the purposes of Part VIIA

of the amended Act, to have been registered as a nominee of the tax agent

under subsection 251KC (1) of the amended Act immediately after the

commencement of this subsection.

(21) Where:

(a) an application for registration as a tax agent was made under

subsection 251J (1) of the Principal Act before the commencement of this

subsection; and

(b) the application was neither granted nor refused before the commencement

of this subsection; the following provisions have effect:

relation to the application as if the amendments made by section 46 of this

Act had not been made;

(d) Part VIIA of the amended Act applies to any registration of a tax agent

granted in accordance with that application as if it had been granted under

section 251JA of the amended Act;

(e) paragraph 251BB (a) and subparagraph 251BC (1) (b) (i) of the amended

Act apply to any registration of a tax agent granted in accordance with that

application as if a reference in that paragraph or subparagraph to the

commencement of section 39 of the Taxation Laws Amendment Act (No. 2) 1988

were a reference to the time immediately after that registration came into

force;

(f) Part VIIA of the amended Act applies to any registration of a nominee

granted in accordance with subsection 251J (4) of the Principal Act as if it

had been granted under subsection 251KA (1) of the amended Act;

(g) subparagraph 251BC (1) (b) (i) of the amended Act applies to any

registration of a nominee granted in accordance with subsection 251J (4) of

the Principal Act as if the reference in that subparagraph to the commencement

of section 39 of the Taxation Laws Amendment Act (No. 2) 1988 were a reference

to the time immediately after that registration came into force.

(22) Where:

(a) a request was made under subsection 251J (5) of the Principal Act

before the commencement of this subsection; and

(b) the request was neither granted nor refused before the commencement of

this subsection; the following provisions have effect:

that request as if the amendments made by section 46 of this Act had not been

made;

(d) Part VIIA of the amended Act applies to any registration granted in

accordance with that request as if it had been granted under subsection 251KC

(1) of the amended Act;

(e) subparagraph 251BC (1) (b) (i) of the amended Act applies to any

registration granted in accordance with that request as if the reference in

that subparagraph to the commencement of section 39 of the Taxation Laws

Amendment Act (No. 2) 1988 were a reference to the time immediately after that

registration came into force.

(23) The amendment made by paragraph 48 (k) does not affect any application

made to the Tribunal before the commencement of this subsection, or any matter

or thing arising out of, or any proceeding incidental to or connected with,

any such application.

(24) Paragraphs 251QA (a), (e) and (h) of the amended Act apply in relation

to decisions of a Board made after the commencement of this subsection.

(25) Paragraph 251QA (d) of the amended Act applies in relation to a

decision of a Board made before or after the commencement of this subsection.

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 56

Increase in section 160AAA rebate for 1987-88 income year-service pensioners

etc.

56. Where the assessable income of a taxpayer of the year of income

commencing on 1 July 1987 includes an amount paid by way of pension, allowance

or benefit under the Veterans' Entitlements Act 1986 (other than Part VII),

section 160AAA of the Principal Act applies to the taxpayer in relation to

that year of income as if:

(a) references in subsection (1) of that section to $6,142 were references

to $6,384; and

(b) references in subsection (1) of that section to $250 were references to

$308.

PART IV - AMENDMENT OF THE INCOME TAX RATES ACT 1986

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 58

Principal Act

58. In this Part, "Principal Act" means the Income Tax Rates Act 1986*3*.

*3* No. 107, 1986, as amended. For previous amendments, see No. 60, 1987.

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 59

Interpretation

59. Section 16 of the Principal Act is amended by omitting "Part VII" from

paragraph (c) of the definition of "eligible pensioner" in subsection (1) and

substituting "Part XIII".

PART V - AMENDMENT OF THE SALES TAX (EXEMPTIONS AND CLASSIFICATIONS)

ACT 1935

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 60

Principal Act

60. In this Part, "Principal Act" means the Sales Tax (Exemptions and

Classifications) Act 1935*4*.

*4* No. 60, 1935, as amended. For previous amendments, see No. 41, 1936; No.

78, 1938; No. 32, 1939; Nos. 29 and 76, 1940; No. 32, 1941; No. 6, 1942; Nos.

35 and 44, 1943; No. 31, 1944; No. 36, 1945; Nos. 12 and 67, 1946; No. 65,

1947; No. 42, 1948; No. 54, 1949; No. 37, 1950; No. 42, 1951; No. 44, 1952;

No. 53, 1953; No. 45, 1954; No. 5, 1956; No. 71, 1957; Nos. 17 and 92, 1959;

Nos. 65 and 88, 1960; Nos. 1 and 76, 1961; No. 4, 1962; No. 44, 1963; No. 30,

1965; Nos. 26 and 62, 1966; Nos. 21, 29 and 80, 1967; No. 78, 1970; Nos. 67

and 87, 1972; Nos. 17, 181 and 216, 1973; No. 24, 1975; No. 175, 1976; No.

107, 1978; Nos. 3, 94 and 157, 1979; No. 142, 1981; Nos. 64, 93 and 115, 1982;

Nos. 63, 84 and 136, 1983; Nos. 81, 123 and 165, 1984; Nos. 65, 67, 145 and

178, 1985; No. 28, 1986; and Nos. 42, 76 and 135, 1987.

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 61

First Schedule

61. The First Schedule to the Principal Act is amended by omitting items

74F, 74H, 74HA and 74HB.

PART VI - AMENDMENT OF THE TAXATION LAWS AMENDMENT (FOREIGN TAX

CREDITS) ACT 1986

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 62

Principal Act

62. In this Part, "Principal Act" means the Taxation Laws Amendment (Foreign

Tax Credits) Act 1986*5*

*5* No. 51, 1986.

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 63

Transitional provisions-depreciation

63. Section 34 of the Principal Act is amended by inserting in subsections

(1) and (2) "the first day of the year of income commencing on" before "1 July

1987".

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 64

Transitional provisions-losses

64. Section 35 of the Principal Act is amended by inserting after subsection

(2) the following subsection:

"(2A) For the purposes of this section, paragraph 23 (q) of the Principal

Act shall be disregarded.".

PART VII - AMENDMENT OF THE TAXATION LAWS AMENDMENT (FRINGE BENEFITS

AND SUBSTANTIATION) ACT 1987

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 65

Principal Act

65. In this Part, "Principal Act" means the Taxation Laws Amendment (Fringe

Benefits and Substantiation) Act 1987*6*.

*6* No. 139, 1987, as amended. For previous amendments, see No. 11, 1988.

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988

- SECT 66

Taxable value of car fringe benefits-cost basis

66. Section 6 of the Principal Act is amended by inserting in paragraph (e)

"(wherever occurring)" before "and substituting".

TAXATION LAWS AMENDMENT ACT (No. 2) 1988No. 78, 1988 - SCHEDULE

SCHEDULE

Section 54

AMENDMENTS OF THE INCOME TAX ASSESSMENT ACT 1936 CONSEQUENTIAL ON THE

RENUMBERING OF THE SOCIAL SECURITY ACT 1947

Subparagraph 23 (jca) (i):

Omit "section 6", substitute "section 3".

Subparagraph 23 (jca) (ii):

Omit "Part IIA", substitute "Part III".

Subparagraph 23 (jca) (iii):

Omit "section 6", substitute "section 3".

Subsection 23AD (1) (definition of "carer's pension"):

Omit "Part III" (wherever occurring), substitute "Part IV".

Subsection 23AD (1) (definition of "dependent child"):

Omit "section 6", substitute "section 3".

Subsection 23AD (1) (subparagraph (b) (i) of the definition of "excepted

payment"):

Omit "Part IV or Part IVAAA", substitute "Part V or Part VI".

Subsection 23AD (1) (sub-subparagraph (b) (iii) (B) of the definition of

"excepted payment"):

Omit "subsection 28 (1A)", substitute "subsection 33 (1)".

Subsection 23AD (1) (paragraph (c) of the definition of "excepted payment"):

Omit "Part VII", substitute "Part XIII".

Subsection 23AD (1) (paragraph (a) of the definition of "excepted pension"):

Omit "Part III or section 135U", substitute "Part IV or section 172".

Subsection 23AD (1) (subparagraph (d) (ii) of the definition of "excepted

pension"):

Omit "subsection 28 (1A)", substitute "subsection 33 (1)".

Subsection 23AD (1) (definition of "rent"):

Omit "section 6", substitute "section 3".

Subsection 23AD (1) (paragraph (a) of the definition of "wife's pension"):

Omit "subsection 6 (1)", substitute "subsection 3 (1)".

Subsection 23AD (1) (subparagraph (c) (ii) of the definition of "wife's

pension"):

Omit "subsection 6 (1)", substitute "subsection 3 (1)".

Subsection 79A (4) (paragraph (a) of the definition of "prescribed

allowance"):

Omit "Part IIA", substitute "Part III".

Subsection 79A (4) (paragraph (b) of the definition of "prescribed

allowance"):

Omit "Part IIA", substitute "Part III".

Sub-subparagraph 102AC (2) (d) (i) (B):

Omit "Part III", substitute "Part IV".

Paragraph 102AC (2) (f):

Omit "subsection 105B (2)", substitute "subsection 95 (2)".

Paragraph 102AC (3) (a):

Omit "subsection 105B (2)", substitute "subsection 95 (2)".

Subsection 159J (6) (paragraph (c) of the definition of "invalid relative"):

Omit "Part III", substitute "Part IV".

Paragraph 160AAA (1) (e):

Omit "Part VII", substitute "Part XIII".

Paragraph 160AAA (2) (a):

Omit "Part VII", substitute "Part XIII".

Subsection 251R (5):

Omit "Part VI", substitute "Part X".

Notes to the Taxation Laws Amendment Act (No. 2) 1988

Note 1

The Taxation Laws Amendment Act (No. 2) 1988 as shown in this compilation comprises
Act No. 78, 1988 amended as indicated in the Tables below.

Table of Acts

Act	Number and year	Date of Assent	Date of commencement	Application, saving or transitional provisions
Taxation Laws Amendment Act (No. 2) 1988	78, 1988	24 June 1988	See s. 2
Tax Laws Amendment (2010 Measures No. 2) Act 2010	75, 2010	28 June 2010	Schedule 6 (item 40): 29 June 2010	—

Table of Amendments

ad. = added or inserted am. = amended rep. = repealed rs. = repealed and substituted
Provision affected	How affected
S. 57...................	rep. No. 75, 2010