TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994 - LONG TITLE

An Act to amend the law relating to taxation

PART 1 - PRELIMINARY

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 1

Short title [see Note 1]

1. This Act may be cited as the Taxation Laws Amendment Act (No. 3) 1994.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- 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) Division 1, and Subdivisions B, D, E, G, J, K, L and M of Division 3, of

Part 2 are taken to have commenced immediately after the commencement of the

Income Tax Assessment Amendment (Foreign Investment) Act 1992.

(3) Subdivision A of Division 12 of Part 2 commences immediately after

Subdivision B of that Division.

(4) Division 1 of Part 4 (other than section 123) is taken to have commenced

on 1 July 1994.

(5) Division 3 of Part 4, section 162 and paragraph 163(a) are taken to have

commenced on 30 June 1994.

PART 2 - AMENDMENT OF THE INCOME TAX ASSESSMENT ACT 1936

Division 1 - Principal Act

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 3

Principal Act

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

1936*1*.

Income Tax Assessment Act 1936

*1* 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, 168 and

174, 1985; No. 173, 1985 (as amended by No. 49, 1986); Nos. 41, 46, 48, 51,

109, 112 and 154, 1986; No. 49, 1986 (as amended by No. 141, 1987); No. 52,

1986 (as amended by No. 141, 1987); No. 90, 1986 (as amended by No. 141,

1987); Nos. 23, 58, 61, 120, 145 and 163, 1987; No. 62, 1987 (as amended by

No. 108, 1987); No. 108, 1987 (as amended by No. 138, 1987); No. 138, 1987 (as

amended by No. 11, 1988); No. 139, 1987 (as amended by Nos. 11 and 78, 1988);

Nos. 8, 11, 59, 75, 78, 80, 87, 95, 97, 127 and 153, 1988; Nos. 2, 11, 56, 70,

73, 105, 107, 129, 163 and 167, 1989; No. 97, 1989 (as amended by No. 105,

1989); Nos. 20, 35, 45, 57, 58, 60, 61, 87, 119 and 135, 1990; Nos. 4, 5, 6,

48, 55, 100, 203, 208 and 216, 1991; Nos. 3, 35, 69, 70, 80, 81, 92, 98, 101,

118, 138, 167, 190, 191, 208, 223, 224, 227 (as amended by No. 82, 1994), 237

and 238, 1992; Nos. 7, 17, 18, 27 and 32, 1993; and Nos. 56 and 82, 1994.

Division 2 - Amendments to introduce a reportable payments

system (RPS)

Subdivision A - Object

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 4

Object

4. The object of this Division is to introduce a tax file number-based

reporting system for certain payments.

Subdivision B - Insertion of RPS provisions

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 5

Insertion of new Division

5. After Division 1 of Part VI of the Principal Act the following Division

is inserted:

"Division 1AA-Reportable payments system (RPS)

"Subdivision A-Object and outline

Object

"220AA. The object of this Division is to facilitate the efficient

collection of tax by:

(a) providing for payers of certain payments ('reportable payments') to make

deductions from those payments if the payee's tax file number is not quoted;

and

(b) requiring payers of reportable payments to give reports to the

Commissioner about those payments.

Outline

"220AB. The following table sets out an outline of this Division:

Topic Provision(s)

Reportable payments

- definition Section 220AC

Deductions by payer from reportable

payments

- obligation to deduct section 220AF

- obligation to send deductions to

Commissioner section 220AG

- receipts section 220AH

- exemption for pensioners section 220AP

- refunds section 220AR

- civil penalties for breach of sections 220AS to 220AW

deduction rules

- civil protection for payers section 220AX

- recovery by Commissioner section 220AY

- tax credits sections 220AZ to 220AZC

Reports by payer to Commissioner

- statements accompanying section 220AI

deductions

- annual reports section 220AJ

- retention requirements section 220AK

Quotation of tax file number by payee

- method section 220AL

- tax file number declarations sections 220AM to 220AO

- payer to send declaration forms to section 220AQ

Commissioner

Pensioners

- exemption section 220AP

- payer to send declaration forms to section 220AQ

Commissioner

"Subdivision B-Interpretation

Interpretation

"220AC. In this Division:

'arrangement' means any agreement, arrangement, understanding, promise or

undertaking, whether express or implied, and whether or not enforceable, or

intended to be enforceable, by legal proceedings;

Note: This definition is only used in section 220AQ.

'exempt inter-corporate payment' means a payment made by a company (other

than in the capacity of trustee) to another company (other than in the

capacity of trustee) where, at the time of the payment:

(a) one of those companies is a subsidiary of the other company; or

(b) each of those companies is a subsidiary of a third company;

Note: This definition is only used in paragraph (e) of the definition of

'reportable payment'.

'government body' means the Commonwealth, a State, a Territory or an

authority of the Commonwealth, a State or a Territory;

'payee' means a person who receives, or is entitled to receive, a reportable

payment;

'payer' means a person who makes, or has made, a reportable payment;

'payment' has a meaning affected by section 220AD;

'pensioner exemption declaration' has the meaning given by section 220AP;

'pensioner exemption declaration form' has the meaning given by section

220AP;

'person' means any of the following:

(a) a company;

(b) a partnership;

(d) a government body;

(e) any other person;

Note 1: Section 220AZF sets out additional rules about partnerships.

Note 2: Section 220AZG sets out additional rules about unincorporated

companies.

'reportable payment' means a payment that:

(a) is declared by the regulations to be a reportable payment for the

purposes of this Division; and

(b) is assessable income; and

and

(d) is not a prescribed payment within the meaning of section 221YHA; and

(e) is not an exempt inter-corporate payment;

Note: 'Exempt inter-corporate payment' is defined by this section.

'signed' has the meaning given by section 220AE;

'subsidiary' has the same meaning as in section 221ED;

Note: This definition is only used in paragraphs (a) and (b) of the definition

of 'exempt inter-corporate payment'.

'tax file number' has the meaning given by section 202A;

'tax file number declaration' has the meaning given by section 220AM;

'tax file number declaration form' has the meaning given by section 220AM.

Money not actually paid to a person

"220AD. For the purposes of this Division, if money is not actually paid to

a person but is reinvested, accumulated, capitalised or otherwise dealt with

on behalf of the person, or as the person directs, the money is taken to be

paid to the person when it is so reinvested, accumulated, capitalised or

otherwise dealt with.

Signing of documents

Natural persons

"220AE.(1) For the purposes of this Division, a natural person is taken to

have signed a document if, and only if, the document is signed by:

(a) the person; or

(b) a person declared by the regulations to be a signatory for the purposes

of this subsection.

Persons other than natural persons

"(2) For the purposes of this Division, a person other than a natural person

is taken to have signed a document if, and only if, the document is signed by

a person declared by the regulations to be a signatory for the purposes of

this subsection.

"Subdivision C-Payer of reportable payment must make deduction

if payee's tax file number not quoted

Deduction from reportable payment if payee's tax file number not quoted

When section applies

"220AF.(1) This section applies if:

(a) a payer makes a reportable payment to a payee; and

(b) the payee has not quoted his or her tax file number to the payer in

connection with the payment; and

Note 1: See section 220AL for the method of quoting tax file numbers.

Note 2: The making of a pensioner exemption declaration is an alternative to

quotation of a tax file number-see section 220AP.

Deduction

"(2) The payer must deduct:

(a) 48.4% of the payment; or

(b) if another percentage is specified in regulations made for the purposes

of this subsection-that percentage of the payment.

If working out the relevant percentage results in an amount of dollars and

cents, the cents are to be disregarded.

Offence

"(3) A person (other than a government body) who contravenes this section is

guilty of an offence punishable on conviction by a maximum fine of 10 penalty

units.

Note: See section 220AS for an alternative civil penalty for contravening this

section.

Deductions to be sent to the Commissioner

Deductions to be sent

"220AG.(1) A payer who makes one or more reportable payments in a month must

send together to the Commissioner all amounts deducted under this Subdivision

from the payments. The amounts must be sent in sufficient time for them to be

received by the Commissioner in the ordinary course of events within:

(a) 14 days after the end of the month; or

(b) such longer period as the Commissioner allows.

Offence

"(2) A person (other than a government body) who contravenes this section is

guilty of an offence punishable on conviction by imprisonment for a maximum

period of 12 months. In addition, the court may order the person to pay to the

Commissioner, as a penalty, an amount not greater than the total of the

amounts required to be deducted under this Subdivision from the reportable

payments to which the contravention relates.

Note: See section 220AT for an alternative civil penalty for contravening this

section.

"Subdivision D-Payers' reporting and record-keeping obligations

Obligation to issue receipt for deduction

When section applies

"220AH.(1) This section applies if a payer deducts an amount under this

Division from a reportable payment.

Receipt to be given

"(2) The payer must give the payee, at the time of the payment or as soon as

practicable afterwards, a written receipt, invoice or similar document setting

out:

(a) the payer's name and address; and

(b) the payee's name (if known to the payer); and

(d) the date on which the payment was made; and

(e) the amount of the payment; and

(f) the amount deducted.

Receipt to be in English and signed

"(3) A document given by a payer under subsection (2) must be:

(a) in the English language; and

(b) signed by the payer.

Penalty: 1 penalty unit.

Deductions sent to Commissioner to be accompanied by a statement

When section applies

"220AI.(1) This section applies if a payer sends an amount to the

Commissioner under section 220AG.

Statement to be completed and sent to Commissioner

"(2) The payer must:

(a) before sending the amount, complete and sign a statement giving

information in relation to the deductions concerned; and

(b) make a copy of the statement; and

Note: Section 220AK deals with retention of the copies.

Form of statement

"(3) The statement must be in a form approved by the Commissioner.

Penalty: 20 penalty units.

Annual report

Requirements for annual report

"220AJ.(1) A payer who makes one or more reportable payments during a

financial year must:

(a) send to the Commissioner a written report setting out, in respect of

each payee:

(i) the payee's tax file number (if quoted to the payer); and

(ii) if the payee's tax file number was not quoted to the payer

but the payee made a pensioner exemption declaration to the payer:

(A) a statement to that effect; and

(B) the type of pension or benefit specified in the pensioner

exemption declaration form concerned; and

(iii) the payee's name (if known to the payer); and

(iv) the payee's address (if known to the payer); and

(v) the total amount of the reportable payments made by the payer

to the payee during the financial year; and

(vi) the total amount (if any) deducted by the payer under this

Division from those payments; and

(b) make a copy of the report.

Note: Section 220AK deals with retention of the copies.

Time limit

"(2) A report under subsection (1) relating to a financial year must be

given to the Commissioner within 2 months after the end of that financial year

or before such later date as the Commissioner allows.

Form of report

"(3) The report must be in a form approved by the Commissioner.

Section not to apply to pre-1 December 1994 payments

"(4) This section does not apply to a reportable payment made before 1

December 1994.

Penalty: 20 penalty units.

Retention of statement and annual report

Retention of statement

"220AK.(1) A person who makes a copy of a statement under paragraph

220AI(2)(b) in relation to a particular month must retain the copy for at

least 5 years after the end of the financial year in which that month

occurred.

Retention of annual report

"(2) A person who makes a copy of a report under paragraph 220AJ(1)(b) in

relation to a financial year must retain the copy for at least 5 years after

the end of the financial year.

Penalty: 20 penalty units.

"Subdivision E-How payees can quote their tax file numbers

Method of quoting tax file number

"220AL. A payee is taken to have quoted his or her tax file number to a

payer in connection with a reportable payment if a tax file number declaration

made to the payer by the payee is in force when the payment is made.

Note: See subsection 220AM(2) for the definition of 'making a tax file number

declaration'.

Meaning of "tax file number declaration"

Tax file number declaration form

"220AM.(1) A 'tax file number declaration form' is a document, in a form

approved by the Commissioner for the purposes of this section, that (in

addition to anything else that it requires or permits) enables the person

completing the form to state his or her tax file number.

Making a tax file number declaration

"(2) If a person (the 'first person') completes the form and gives it to

another person, the first person is said to make a 'tax file number

declaration' to the other person at the time when the form is given.

Note: The first person would normally be a payee and the other person would

normally be a payer.

When tax file number declaration in force

When declaration in force

"220AN.(1) A tax file number declaration made by a person (the 'first

person') to another person (the 'second person') is in force at all times

after it is made until any of the following happens:

(a) 29 days pass after the declaration is made without an obligation being

imposed on the second person under section 220AQ in relation to the tax file

number declaration form concerned;

(b) one year passes after the second person makes a reportable payment to

the first person (being a payment made when the declaration is in force)

without the first person again becoming entitled to receive a reportable

payment from the second person;

person;

(d) the Commissioner, by notice in the Gazette, determines that:

(i) all tax file number declarations cease to be in force; or

(ii) a specified class of tax file number declarations that

includes the particular tax file number declaration ceases to be in force;

(e) the declaration ceases to be in force because of subsection (2).

Note: The first person would normally be a payee and the second person would

normally be a payer.

Cancellation-no tax file number

"(2) A tax file number declaration ceases to be in force if:

(a) the Commissioner is satisfied that the tax file number stated in the

declaration form:

(i) has been cancelled since the form was given; or

(ii) is for any other reason not the first person's tax file

number; and

(b) the Commissioner is not satisfied that the first person has a tax file

number; and

first person:

(i) informs them accordingly; and

(ii) states that the declaration ceases to be in force on a

specified day (which must not be earlier than the day on which the notice is

given to the first person).

In such a case, the declaration ceases to be in force on the day specified in

the notices.

Notification of decisions

"(3) If the Commissioner gives the first person a notice under subsection

(2), the Commissioner must, together with the notice, give the first person a

written statement of the reasons for the decision to give the notice.

Commissioner may correct tax file number set out in tax file number

declaration form

"220AO.(1) If:

(a) the Commissioner is satisfied that the tax file number stated in a tax

file number declaration form:

(i) has been cancelled or withdrawn since the form was given; or

(ii) is otherwise wrong; and

(b) the Commissioner is satisfied that the person who gave the form (the

'first person') has a tax file number;

the Commissioner may give the person to whom the declaration was made (the

'second person') written notice of the incorrect statement and of the correct

tax file number.

Note: The first person would normally be a payee and the second person would

normally be a payer.

"(2) If the Commissioner does so, the second person must, in any document

under this Division requiring the first person's tax file number that the

second person completes after that time (before another tax file number

declaration is made by the first person to the second person), state that

correct tax file number.

"Subdivision F-Making of pensioner exemption declaration

to be alternative to quotation of tax file number

Making of pensioner exemption declaration to be alternative to quotation of

tax file number

Pensions and benefits to which this section applies

"220AP.(1) This section applies to the following pensions and benefits:

(a) an age pension under Part 2.2 of the Social Security Act 1991;

(b) a disability support pension under Part 2.3 of that Act;

(d) a carer pension under Part 2.5 of that Act;

(e) a sole parent pension under Part 2.6 of that Act;

(f) a widow B pension under Part 2.8 of that Act;

(g) a special benefit under Part 2.15 of that Act;

(h) a special needs pension under Part 2.16 of that Act;

(i) a pension under Part III of the Veterans' Entitlements Act 1986.

Making of pensioner exemption declaration

"(2) For the purposes of this Division, a payee is taken to have quoted his

or her tax file number to a payer in connection with a reportable payment if a

pensioner exemption declaration made to the payer by the payee is in force

when the payment is made. However, this rule does not apply for the purposes

of section 220AJ (which deals with annual reports by payers).

Note: See subsection (4) for the definition of 'making a pensioner exemption

declaration'.

Pensioner exemption declaration form

"(3) A 'pensioner exemption declaration form' is a document, in a form

approved by the Commissioner for the purposes of this section, that (in

addition to anything else that it requires or permits) enables the person

completing the form to state that he or she is being paid a pension or

benefit.

Making a pensioner exemption declaration

"(4) If a person (the 'first person') completes the form and gives it to

another person, the first person is said to make a 'pensioner exemption

declaration' to the other person at the time when the form is given.

Note: The first person would normally be a payee and the other person would

normally be a payer.

When declaration in force

"(5) A pensioner exemption declaration made by a person (the 'first person')

to another person (the 'second person') is in force at all times after it is

made until any of the following happens:

(a) 29 days pass after the declaration is made without an obligation being

imposed on the second person under section 220AQ in relation to the pensioner

exemption declaration form concerned;

(b) one year passes after the second person makes a reportable payment to

the first person (being a payment made when the declaration is in force)

without the first person again becoming entitled to receive a reportable

payment from the second person;

second person;

(d) the Commissioner, by notice in the Gazette, determines that:

(i) all pensioner exemption declarations cease to be in force; or

(ii) a specified class of pensioner exemption declarations that

includes the particular pensioner exemption declaration ceases to be in

force;

(e) the first person makes a tax file number declaration to the second

person;

(f) the first person ceases to be paid a pension or benefit.

Note: The first person would normally be a payee and the second person would

normally be a payer.

Commissioner may tell payers and payees about cessation of pension/benefit

"(6) If a pensioner exemption declaration made by a person (the 'first

person') to another person (the 'second person') ceases to be in force because

of paragraph (5)(f), the Commissioner may tell the first person and the second

person that the declaration has so ceased to be in force. The Commissioner may

also explain the reasons for the cessation and the effect of the cessation.

Note: The first person would normally be a payee and the second person would

normally be a payer.

Payees to tell payers about cessation of entitlement to pension/benefit

"(7) If a pensioner exemption declaration made by a person (the 'first

person') to another person (the 'second person') ceases to be in force because

of paragraph (5)(f), the first person must tell the second person, in writing,

about the cessation as soon as practicable after the cessation occurs.

Penalty for contravention of this subsection: 1 penalty unit.

Note: The first person would normally be a payee and the second person would

normally be a payer.

"Subdivision G-Payer to send tax file number declaration form

or pensioner exemption declaration form to Commissioner

Obligations of payer-tax file number declaration form or pensioner exemption

declaration form

Form to be sent to Commissioner-prior dealings with payee

"220AQ.(1) If:

(a) a tax file number declaration form or pensioner exemption declaration

form is given by a person (the 'first person') to another person (the 'second

person'); and

(b) at any time during the period of 12 months ending at the time of receipt

by the second person of the form, there was in existence an arrangement that

gave rise, or was capable of giving rise, to the making of a reportable

payment by the second person to the first person (whether on fulfilment of a

condition or otherwise);

the second person must:

person; and

(d) sign the form; and

(e) make a copy of the form; and

(f) send the form to the Commissioner in sufficient time for it to be

received by the Commissioner in the ordinary course of events within:

(i) 14 days after receipt by the second person of the form; or

(ii) such longer period as the Commissioner allows.

Note 1: The first person would normally be a payee and the second person would

normally be a payer.

Note 2: Section 220AC defines 'arrangement'.

Form to be sent to Commissioner-no prior dealings with payee

"(2) If:

(a) a tax file number declaration form or pensioner exemption declaration

form is given by a person (the 'first person') to another person (the 'second

person'); and

(b) at no time during the period of 12 months ending at the time of receipt

by the second person of the form was there in existence an arrangement that

gave rise, or was capable of giving rise, to the making of a reportable

payment by the second person to the first person (whether on fulfilment of a

condition or otherwise); and

the form, the second person made one or more reportable payments to the first

person;

the second person must:

(d) complete the part of the form required to be completed by the second

person; and

(e) sign the form; and

(f) make a copy of the form; and

(g) send the form to the Commissioner in sufficient time for it to be

received by the Commissioner in the ordinary course of events within:

(i) 14 days after the earliest time when any of the payments

mentioned in paragraph (c) were made; or

(ii) such longer period as the Commissioner allows.

Note: Section 220AC defines 'arrangement'.

Retention of copy of form

"(3) A person who makes a copy of a form under paragraph (1)(e) or (2)(f)

must retain that copy until the second 1 July after the day on which the

declaration concerned ceases to be in force.

Penalty: 10 penalty units.

"Subdivision H-Refund of deductions in special circumstances

Commissioner may refund deductions

When section applies

"220AR.(1) This section applies if a deduction was made under this Division

from a reportable payment to a person.

Application for refund

"(2) The person may apply for a refund of the whole or a part of the

deduction.

Application to be in writing

"(3) The application is to be in writing and must be given to the

Commissioner.

Criteria for granting application

"(4) The Commissioner must grant the application if the Commissioner is

satisfied that:

(a) there are special circumstances that warrant granting the application;

and

(b) it would be fair and reasonable to grant the application having regard

to:

(i) the purposes of this Division; and

(ii) the nature of the act or omission that resulted in the

deduction being made; and

(iii) such other matters (if any) as the Commissioner thinks fit.

No credit for refunded amounts

"(5) A person is not entitled to a credit under this Division in respect of

an amount refunded under this section.

"Subdivision I-Civil penalties for failure to make deductions

from reportable payments and for failure to send

deductions to the Commissioner

Penalty for failure to make deductions from reportable payments

When section applies

"220AS.(1) This section applies if a person refuses or fails, at the time of

making a reportable payment to a payee, to deduct from the payment the amount

required to be deducted under this Division.

Persons other than government bodies

"(2) If the person is not a government body, the person is liable to pay to

the Commissioner, by way of penalty:

(a) an amount (the 'undeducted amount') equal to the amount that the person

refused or failed to deduct; and

(b) an amount at the rate of 16% per annum of so much of the undeducted

amount as remains unpaid (this amount is computed from the end of the period

within which the person would have been required to pay the amount of the

deduction to the Commissioner if it were assumed that the person had deducted

the amount required to be deducted under this Division).

Government bodies

"(3) If the person is a government body other than the Commonwealth, the

person is liable to pay to the Commissioner, by way of penalty, an amount at

the rate of 16% per annum of the amount that the person refused or failed to

deduct. This penalty is payable in respect of the period:

(a) beginning at the time when the reportable payment was made; and

(b) ending on 30 June in the financial year in which the reportable payment

was made.

Penalty for failure to send deductions to Commissioner

When section applies

"220AT.(1) This section applies if an amount (the 'principal amount')

payable to the Commissioner under section 220AG by a person remains unpaid

after the end of the period within which it is required to be paid.

Principal amount continues to be payable

"(2) The principal amount continues to be payable by the person to the

Commissioner.

Persons other than government bodies

"(3) If the person is not a government body, the person is liable to pay to

the Commissioner, by way of penalty:

(a) an amount (the 'relevant penalty amount') equal to 20% of the principal

amount; and

(b) an amount at the rate of 16% per annum of the sum of:

(i) so much of the principal amount as remains unpaid; and

(ii) so much of the relevant penalty amount as remains unpaid;

computed from the end of that period.

Government bodies

"(4) If the person is a government body other than the Commonwealth, the

person is liable to pay to the Commissioner, by way of penalty, an amount at

the rate of 16% per annum on so much of the principal amount as remains

unpaid, computed from the end of that period.

Commissioner may remit penalties for failure to deduct or for failure to send

deductions to Commissioner

When section applies

"220AU.(1) This section applies to a penalty payable by a person under

section 220AS or 220AT.

Power to remit

"(2) The Commissioner may remit the whole or a part of the penalty.

Criteria for remission-interest-based penalties

"(3) If the penalty is payable by a person under paragraph 220AS(2)(b),

220AT(3)(b) or subsection 220AT(4) in relation to another amount that has not

been paid (the 'principal amount'), the Commissioner may only remit the whole

or a part of the penalty if:

(a) the Commissioner is satisfied that:

(i) the circumstances that contributed to the delay in payment of

the principal amount were not due to, or caused directly or indirectly by, an

act or omission of the person; and

(ii) the person has taken reasonable action to mitigate, or

mitigate the effects of, those circumstances; or

(b) the Commissioner is satisfied that:

(i) the circumstances that contributed to the delay in payment of

the principal amount were due to, or caused directly or indirectly by, an act

or omission of the person; and

(ii) the person has taken reasonable action to mitigate, or

mitigate the effects of, those circumstances; and

(iii) having regard to the nature of those circumstances, it would

be fair and reasonable to remit the whole or the part of the penalty; or

because of which it would be fair and reasonable to remit the penalty or the

part of the penalty.

Notification of decisions

"(4) If the Commissioner makes a decision:

(a) to remit part only of a penalty payable under paragraph 220AS(2)(a),

subsection 220AS(3) or paragraph 220AT(3)(a); or

(b) not to remit any part of such a penalty;

the Commissioner must give written notice of the decision to the person liable

to pay the penalty.

Reduction of late payment penalty where judgment debt carries interest

Principal amount

"220AV.(1) For the purposes of this section, each of the following amounts

is a 'principal amount':

(a) an amount of the kind referred to in paragraph 220AS(2)(a) as the

undeducted amount;

(b) an amount of the kind referred to in subsection 220AT(1) as the

principal amount;

relevant penalty amount.

When section applies

"(2) This section applies if judgment is given by, or entered in, a court

for the payment of:

(a) the whole or a part of a principal amount; or

(b) an amount that includes the whole or a part of a principal amount.

Principal amount still due and payable

"(3) A person's liability to a penalty (the 'interest-based penalty') under

paragraph 220AS(2)(b), 220AT(3)(b) or subsection 220AT(4) is to be worked out

on the basis that the principal amount or the part of the principal amount, as

the case may be, does not cease to be due and payable only because of the

giving or entering of the judgment.

Reduction of interest-based penalties

"(4) If the judgment debt carries interest, the interest-based penalty that

would otherwise be payable in relation to the principal amount or the part of

the principal amount, as the case may be, is to be reduced by the amount

worked out using the formula:

Interest X Whole or part of principal amount

Judgment debt

where:

'Interest' means the amount of the interest;

'Whole or part of principal amount' means the principal amount, or the part

of the principal amount, as the case may be;

'Judgment debt' means the amount of the judgment debt.

Civil penalties to be alternative to prosecution for certain offences

"220AW.(1) If:

(a) apart from this subsection, an amount is payable, by way of penalty, by

a person to the Commissioner under this Division because of an act or omission

of the person; and

(b) a prosecution is instituted against the person for an offence against

this Division constituted by the act or omission;

the amount is not payable unless and until the prosecution is withdrawn.

"(2) If:

(a) a person is liable to pay, by way of penalty, an amount (the 'penalty

amount') to the Commissioner under this Division because of an act or omission

of the person; and

(b) an amount (the 'paid amount') is paid, or applied by the Commissioner,

in total or partial discharge of the liability; and

this Division constituted by the act or omission;

then:

(d) the paid amount is to be refunded to the person or applied by the

Commissioner in total or partial discharge of a tax liability of the person

(within the meaning of section 2 of the Taxation Administration Act 1953);

and

(e) if the prosecution is withdrawn, the person again becomes liable to pay

the penalty amount.

"Subdivision J-Payers to have civil protection for making deductions

Payers to have civil protection for making deductions

"220AX. A person is discharged from all liability to pay, or account for, a

deduction to any person other than the Commissioner if:

(a) the person makes the deduction from a reportable payment; and

(b) the deduction was made, or purports to have been made, for the purposes

of section 220AF.

"Subdivision K-Recovery of amounts payable under this Division

Recovery of amounts by Commissioner

Recoverable amount

"220AY.(1) In this section:

'recoverable amount' means any of the following amounts:

(a) an amount payable to the Commissioner under this Division by a person

other than the Commonwealth;

(b) the unpaid amount of an estimate under section 222AGA that relates to a

liability under this Division;

an estimate;

(d) an amount that is due and payable under an agreement under section

222ALA that relates to:

(i) a liability under this Division; or

(ii) a liability to pay an estimate relating to a liability under

this Division;

even if the agreement also relates to a liability that is not of a kind

referred to in subparagraph (i) or (ii);

(e) a penalty payable under Subdivision B of Division 9 in relation to a

company's liability under this Division;

(f) a penalty payable under Subdivision C of Division 9 in relation to an

estimate relating to a company's liability under this Division;

(g) a penalty payable under Subdivision D of Division 9 in relation to a

company's liability to pay an amount of the kind mentioned in paragraph (d).

Debt

"(2) A recoverable amount is a debt due to the Commonwealth.

Payable to Commissioner

"(3) A recoverable amount is payable to the Commissioner.

Recovery in court

"(4) A recoverable amount may be sued for and recovered in a court of

competent jurisdiction by the Commissioner or a Deputy Commissioner suing in

his or her official name.

Criminal proceedings-ancillary order for payment

"(5) If proceedings for an offence against this Division are brought against

the person by whom a recoverable amount is payable, the court before which the

proceedings are brought may order the person to pay the amount to the

Commissioner.

Averments

"(6) The provisions of section 8ZL of the Taxation Administration Act 1953

(which deals with averments) apply in proceedings for the recovery of a

recoverable amount in a corresponding way to the way in which they apply in

relation to a prosecution for a prescribed taxation offence within the meaning

of Part III of that Act.

Evidentiary certificate

"(7) In an action for the recovery of a recoverable amount, a written

certificate stating that the sum specified in the certificate was, as at the

date of the certificate, due by a specified person to the Commonwealth in

respect of a recoverable amount is prima facie evidence of the matters stated

in the certificate. The certificate must be signed by the Commissioner, a

Second Commissioner, a Deputy Commissioner or a delegate of the Commissioner.

Multiple amounts owing

"(8) If:

(a) 2 or more recoverable amounts are payable by a person; and

(b) an amount (the 'eligible payment') is paid to the Commissioner in

respect of one or more of those recoverable amounts; and

payment;

the Commissioner may:

(d) apply the eligible payment in partial discharge of the sum of the

recoverable amounts payable; and

(e) recover as a debt due to the Commonwealth the amount by which the sum of

the recoverable amounts payable exceeds the eligible payment.

The Commissioner may do those things in spite of any direction to the contrary

by or on behalf of the person by whom the recoverable amounts are payable or

the person making the eligible payment.

Application of Divisions 8 and 9

"(9) If the Commissioner applies or recovers an amount under subsection (8),

the Commissioner may make a written determination about how the amount is to

be taken, for the purposes of Divisions 8 and 9, to have been applied towards

discharging any one or more of the recoverable amounts referred to in

paragraph (8)(a). A determination has effect accordingly.

Effect of certain declarations and affidavits under Division 8

"(10) In making a statement (whether orally or in writing and whether or not

under oath) for a purpose connected with proceedings to recover a recoverable

amount from a person (the 'debtor'), the maker of the statement (who may be

the debtor) may, in so far as the statement relates to a question about

whether the debtor has a defence, ignore the possibility that a statutory

declaration relating to an estimate may be given to the Commissioner, or an

affidavit relating to an estimate may be filed, under Subdivision B, C or D of

Division 8.

Interpretation

"(11) An expression used in paragraphs (1)(b) to (g) has the same meaning as

in Division 8.

"Subdivision L-Tax credits for deductions from reportable payments

Entitlement to credit-payee neither a partnership nor a trustee

"220AZ. If:

(a) any deductions have been made under this Division from reportable

payments made in a year of income to a person (other than a partnership or the

trustee of a trust estate); and

(b) an assessment has been made of the tax payable, or the Commissioner is

satisfied that no tax is payable, by the person in relation to the year of

income;

the person is entitled to a credit of an amount equal to the deductions.

Entitlement to credit-payee a partnership

"220AZA. If:

(a) any deductions have been made under this Division from reportable

payments made in a year of income to a partnership; and

(b) the return of income of the partnership for the year of income has been

lodged with the Commissioner; and

satisfied that no tax is payable, in relation to the year of income by a

partner in the partnership whose individual interest in the net income or

partnership loss of the partnership is wholly or partly attributable to the

reportable payments;

the partner is entitled to a credit worked out using the formula:

Deductions X Individual interest

Net income/partnership loss

where:

'Deductions' means the sum of the deductions;

'Individual interest' means so much of the individual interest as is

attributable to the reportable payments;

'Net income/partnership loss' means so much of the net income or partnership

loss as is attributable to the reportable payments.

Entitlement to credit-payee a trustee

When section applies

"220AZB.(1) This section applies if any deductions are made under this

Division from reportable payments made during a year of income to a trustee of

a trust estate.

Trusts-section 97

"(2) If:

(a) a share of the net income of the trust estate is included in the

assessable income of a beneficiary in the trust estate under section 97, being

a share that is wholly or partly attributable to the reportable payments; and

(b) an assessment has been made of the tax payable, or the Commissioner is

satisfied that no tax is payable, by the beneficiary in relation to the year

of income;

the beneficiary is entitled to a credit equal to the amount worked out using

the formula:

Deductions X Share of net income

Net income

where:

'Deductions' means the sum of the deductions;

'Share of net income' means so much of the share of the net income of the

trust estate as is attributable to the reportable payments;

'Net income' means so much of the net income of the trust estate as is

attributable to the reportable payments.

Trusts-section 98

"(3) If:

(a) the trustee is liable to be assessed under section 98 in respect of a

share of the net income of the trust estate to which a beneficiary is

presently entitled, being a share that is wholly or partly attributable to the

reportable payments; and

(b) an assessment has been made of the tax payable, or the Commissioner is

satisfied that no tax is payable, by the trustee in respect of that share;

the trustee is entitled to a credit equal to the amount worked out using the

formula:

Deductions X Share of net income

Net income

where:

'Deductions' means the sum of the deductions;

'Share of net income' means so much of the share of the net income of the

trust estate as is attributable to the reportable payments;

'Net income' means so much of the net income of the trust estate as is

attributable to the reportable payments.

Trusts-section 99 or 99A

"(4) If:

(a) the trustee is liable to be assessed under section 99 or 99A in respect

of the net income, or a part of the net income, of the trust estate and that

net income or part is wholly or partly attributable to the reportable

payments; and

(b) an assessment has been made of the tax payable, or the Commissioner is

satisfied that no tax is payable, by the trustee under those sections in

respect of that net income or part;

the trustee is entitled to a credit equal to the amount worked out using the

formula:

Deductions X Part of net income

Net income

where:

'Deductions' means the sum of the deductions;

'Part of net income' means so much of the net income or part of the net

income in respect of which the trustee is so liable to be assessed as is

attributable to the reportable payments;

'Net income' means so much of the net income of the trust estate as is

attributable to the reportable payments.

Trusts-no net income

"(5) If there is no net income of the trust estate of the year of income,

the trustee is entitled to a credit equal to the sum of the deductions.

Application of credits

Credit is a debt owing by the Commonwealth

"220AZC.(1) Subject to this section, the amount of the credit to which a

person is entitled under this Division is a debt due and payable to that

person by the Commissioner on behalf of the Commonwealth.

Application of credit-cases not involving a trustee assessed to tax

"(2) If a person is entitled to a credit under section 220AZ, 220AZA or

subsection 220AZB(2), the Commissioner must:

(a) if the amount of the credit does not exceed the tax payable by the

person under an assessment in relation to the year of income in which the

deductions to which the credit relates were made-apply the amount of the

credit in payment, or part payment, of that tax; and

(b) if the amount of the credit exceeds the tax payable-apply:

(i) so much of the amount of the credit as does not exceed the tax

in payment of the tax; and

(ii) so much of the excess as does not exceed the amount of any

other tax payable by the person in payment, or part payment, of that other

tax.

Application of credit-trustee assessed under section 98

"(3) If the trustee of a trust estate is entitled to a credit under

subsection 220AZB(3) in relation to a share of a beneficiary of the net income

of the trust estate of a year of income, the Commissioner must:

(a) if the amount of the credit does not exceed the tax payable in respect

of that share-apply the amount of the credit in payment, or part payment, of

that tax; and

(b) if the amount of the credit exceeds the tax payable in respect of that

share-apply:

(i) so much of the amount of the credit as does not exceed the tax

payable in respect of that share in payment of the tax; and

(ii) so much of the excess as does not exceed the amount of any

tax payable by the trustee under section 98 in respect of a share of the

beneficiary of the net income of the trust estate of any other year of income

in payment, or part payment, of that other tax.

Application of credit-trustee assessed under section 99 or 99A

"(4) If the trustee of a trust estate is entitled to a credit under

subsection 220AZB(4) in relation to the net income or a part of the net income

of the trust estate, the Commissioner must:

(a) if the amount of the credit does not exceed the tax payable under

section 99 or 99A in respect of that net income or part-apply the amount of

the credit in payment, or part payment, of that tax; and

(b) if the amount of the credit exceeds the tax payable under section 99 or

99A in respect of that net income or part-apply:

(i) so much of the amount of the credit as does not exceed that

tax in payment of that tax; and

(ii) so much of the excess as does not exceed the amount of any

tax payable by the trustee under section 99 or 99A in respect of the net

income or a part of the net income of the trust estate of any other year of

income in payment, or part payment, of that other tax.

Application of credit-no net income of trust

"(5) If the trustee of a trust estate is entitled to a credit under

subsection 220AZB(5) in relation to deductions made in a year of income from

reportable payments made to the trustee, the Commissioner must:

(a) if the amount of the credit does not exceed the amount of any tax

payable by the trustee under section 99 or 99A in respect of the net income or

a part of the net income of the trust estate of any other year of income-apply

the amount of the credit in payment, or part payment, of that tax; and

(b) if the amount of the credit exceeds the amount of any tax payable by the

trustee under section 99 or 99A in respect of the net income or a part of the

net income of the trust estate of any other year of income-apply so much of

the amount of the credit as does not exceed that tax in payment of that tax.

Deemed payment of tax

"(6) If, under subsection (2), (3), (4) or (5), the Commissioner has applied

an amount of a credit in payment of an amount of tax payable by a person, the

person is taken to have paid the amount so applied in payment of the tax as

at:

(a) the time at which it was so applied; or

(b) such earlier time as the Commissioner determines.

Recovery of excess credits

"(7) If the amount, or the sum of the amounts, applied or paid by the

Commissioner as a credit to which a person is entitled under this Division

exceeds the amount of the credit to which the person is so entitled, the

Commissioner may recover the amount of the excess as if it were income tax due

and payable by the person.

Higher education contribution etc.

"(8) This section has effect subject to section 221ZY (which deals with

higher education contribution and student financial supplement).

Interpretation

"(9) In this section:

(a) a reference to tax payable by a person other than a trustee is a

reference to an amount payable by the person to the Commonwealth under this

Act; and

(b) a reference to tax payable by the trustee of a trust estate in respect

of a share of a beneficiary of the net income of the trust estate of the year

of income is a reference to any amount payable by the trustee to the

Commonwealth under this Act in relation to the beneficiary in relation to the

year of income; and

section 99 or 99A in respect of the net income or a part of the net income of

the trust estate of a year of income is a reference to any amount payable by

the trustee to the Commonwealth under this Act in relation to the trust estate

in relation to the year of income, other than an amount payable by the trustee

in relation to a particular beneficiary.

"Subdivision M-Miscellaneous

Power of Commissioner to obtain information

"220AZD. Section 264 applies, for the purposes of this Division, as if the

reference in paragraph (1)(b) of that section to a person's income or

assessment were a reference to a matter relevant to the administration or

operation of this Division.

Note: Section 264 empowers the Commissioner to obtain information.

Declarations

"220AZE. A form that is approved by the Commissioner for the purposes of

this Division may be required to contain a declaration by the person using the

form.

Application of this Division to partnerships

"220AZF.(1) This Division applies to a partnership as if the partnership

were a person, but it applies with the following changes:

(a) obligations that would be imposed on the partnership are imposed instead

on each partner, but may be discharged by any of the partners;

(b) the partners are jointly and severally liable to pay an amount that

would be payable by the partnership;

the partnership is taken to have been committed by each of the partners.

"(2) In a prosecution of a person for an offence that the person is taken to

have committed because of paragraph (1)(c), it is a defence if the person

proves that the person:

(a) did not aid, abet, counsel or procure the relevant act or omission; and

(b) was not in any way knowingly concerned in, or party to, the relevant act

or omission (whether directly or indirectly and whether by any act or omission

of the person).

Application of this Division to unincorporated companies

"220AZG.(1) This Division applies to an unincorporated company as if the

company were a person, but it applies with the following changes:

(a) obligations that would be imposed on the company are imposed instead on

each member of the committee of management of the company, but may be

discharged by any of those members;

(b) any offence against this Division that would otherwise be committed by

the company is taken to have been committed by each member of the committee of

management of the company.

"(2) In a prosecution of a person for an offence that the person is taken to

have committed because of paragraph (1)(b), it is a defence if the person

proves that the person:

(a) did not aid, abet, counsel or procure the relevant act or omission; and

(b) was not in any way knowingly concerned in, or party to, the relevant act

or omission (whether directly or indirectly and whether by any act or omission

of the person).

Review of decisions

"220AZH.(1) This section applies to:

(a) a decision of the Commissioner under any of the following provisions:

(i) subsection 220AN(2);

(ii) subsection 220AO(1);

(iii) section 220AR; and

(b) a decision of the Commissioner under section 220AU (other than a

decision relating to a penalty payable under subsection 220AS(3)).

"(2) A person who is dissatisfied with a decision made in relation to the

person may object against the decision in the manner set out in Part IVC of

the Taxation Administration Act 1953.".

Subdivision C - Consequential amendments

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 6

Consequential amendments of the Principal Act

6. The Principal Act is amended as set out in the Schedule.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 7

Consequential amendments of other Acts

Crimes (Taxation Offences) Act 1980

7. (1) Section 3 of the Crimes (Taxation Offences) Act 1980 is amended by

inserting "220AG(1), 220AS(2), 220AT(3)," after "subsection" (first occurring)

in paragraph (g) of the definition of "income tax" in subsection (1).

Taxation (Interest on Overpayments) Act 1983

(2) Section 3 of the Taxation (Interest on Overpayments) Act 1983 is amended

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

subsection (1) the following paragraph:

"(baa) an amount payable to the Commissioner under paragraph 220AS(2)(a) or

220AT(3)(a) of the Income Tax Assessment Act 1936;".

Taxation Laws Amendment Act (No. 2) 1993

(3) Section 57 of the Taxation Laws Amendment Act (No. 2) 1993 is amended by

inserting "1AA or" after "Division" (second occurring) in paragraph (a) of the

definition of "net tax" in subsection (5).

Division 3 - Amendments relating to foreign investment funds and

controlled foreign companies

Subdivision A - Amendments relating to attribution credits

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 8

Object

8. The object of this Subdivision is to ensure that FIF attribution credits

do not arise for the purpose of calculating the attributable income of a CFC.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 9

Certain provisions to be disregarded in calculating attributable income

9. Section 389 of the Principal Act is amended by omitting from paragraph

(a) "and 461" and substituting ", 461 and 605".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 10

Application

10. The amendment made by this Subdivision applies in relation to the

calculation of attributable income of any eligible period ending after 30 June

1994.

Subdivision B - Amendment of trust provisions to avoid double

taxation of interests in a CFC held through a CFT

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 11

Object

11. The object of this Subdivision is to ensure that double taxation does

not arise from the interaction of Parts X and XI with Divisions 6 and 6AAA of

Part III of the Principal Act where a taxpayer has an interest in a CFC held

through a CFT.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 12

Application of Division in respect of interests in non-resident trust

estates to which Part XI applies

12. Section 96A of the Principal Act is amended:

(a) by inserting after subsection (3) the following subsections:

"(3A) If:

(a) under section 529, the assessable income of a year of income of a CFT

includes an amount of foreign investment fund income that, under Part XI,

accrued to the CFT from a FIF in respect of a notional accounting period of

the FIF; and

(b) a statutory accounting period of a CFC coincides with that notional

accounting period of the FIF; and

CFC to a taxpayer who is a beneficiary in the CFT; and

(d) the FIF is the same entity as the CFC;

then the beneficiary's share of the net income of the CFT of the year of

income is to be calculated as if the amount of foreign investment fund income

had not been included in the CFT's assessable income.

"(3B) If:

(a) under section 529, the assessable income of a year of income of a CFT

includes an amount of foreign investment fund income that, under Part XI,

accrued to the CFT from a FIF in respect of a notional accounting period of

the FIF; and

(b) each of 2 or more statutory accounting periods of a CFC occurs partly

within that notional accounting period of the FIF; and

periods of the CFC to a taxpayer who is a beneficiary in the CFT; and

(d) the FIF is the same entity as the CFC;

then the beneficiary's share of the net income of the CFT of the year of

income is to be calculated as if the amount of foreign investment fund income

had not been included in the CFT's assessable income.";

(b) by inserting in subsection (5) the following definitions:

" 'CFC' has the same meaning as in Part X;

'CFT' has the same meaning as in Part X;

'statutory accounting period' has the same meaning as in Part X.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 13

Attributable income of a trust estate

13. Section 102AAU of the Principal Act is amended:

(a) by omitting from sub-subparagraph (1)(c)(viii)(B) "and" and substituting

"or";

(b) by adding at the end of paragraph (1)(c) the following subparagraph:

"(ix) an excluded foreign investment fund income amount

(see subsections (7) and (8)); and";

"(7) For the purposes of subparagraph (1)(c)(ix), if:

(a) the non-resident trust estate concerned is a CFT; and

(b) under section 529, the assessable income of a year of income of the CFT

includes an amount of foreign investment fund income that, under Part XI,

accrued to the CFT from a FIF in respect of a notional accounting period of

the FIF; and

accounting period of the FIF; and

(d) wholly or partly because of the holding of an attribution tracing

interest in the CFT, section 456 applies at the end of the statutory

accounting period of the CFC to the attributable taxpayer in relation to whom

the attributable income is being calculated; and

(e) the FIF is the same entity as the CFC;

then the amount of foreign investment fund income is an excluded foreign

investment fund income amount for the purpose of calculating the attributable

income in relation to the attributable taxpayer.

"(8) For the purposes of subparagraph (1)(c)(ix), if:

(a) the non-resident trust estate concerned is a CFT; and

(b) under section 529, the assessable income of a year of income of a CFT

includes an amount of foreign investment fund income that, under Part XI,

accrued to the CFT from a FIF in respect of a notional accounting period of

the FIF; and

within that notional accounting period of the FIF; and

(d) wholly or partly because of the holding of an attribution tracing

interest in the CFT, section 456 applies at the end of each of these statutory

accounting periods of the CFC to the attributable taxpayer in relation to whom

the attributable income is being calculated; and

(e) the FIF is the same entity as the CFC;

then the amount of foreign investment fund income is an excluded foreign

investment fund income amount for the purpose of calculating the attributable

income in relation to the attributable taxpayer.

"(9) In subsections (7) and (8):

'attribution tracing interest' has the same meaning as in Part X;

'CFT' has the same meaning as in Part X;

'FIF' has the same meaning as in Part XI;

'notional accounting period' has the same meaning as in Part XI;

'statutory accounting period' has the same meaning as in Part X.".

Subdivision C - Attributable income of listed country trust estate

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 14

Object

14. The object of this Subdivision is to include foreign investment fund

income accruing to a listed country trust estate in its attributable income.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 15

Attributable income of a trust estate

15. Section 102AAU of the Principal Act is amended by omitting from

paragraph (1)(b) "other than eligible designated concession income in relation

to any listed country in relation to the year of income;" and substituting the

following words and subparagraphs "other than:

(i) eligible designated concession income in relation to any

listed country in relation to the year of income; or

(ii) amounts included under section 529 in the assessable income

of the trust estate of the year of income;".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 16

Application

16. The amendment made by this Subdivision applies to the calculation of

attributable income of the 1994-95 year of income and of all later years of

income.

Subdivision D - Amendment of trust provisions to avoid double taxation

of FIF income accruing to a resident public unit trust

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 17

Object

17. The object of this Subdivision is to ensure that double taxation of

foreign investment fund income of a resident public unit trust does not arise

under subsection 96A(2) of the Principal Act.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 18

Application of Division in respect of interests in non-resident trust

estates to which Part XI applies

18. Section 96A of the Principal Act is amended by adding at the end of

subsection (2) the following word and paragraph:

"; and (e) in determining under sections 99 and 99A the extent (if any) to

which the trustee is to be assessed and liable to pay tax on the whole or part

of the net income of the trust estate of the year of income or any later year

of income, paragraphs (c) and (d) of this subsection are to be disregarded.".

Subdivision E - Amendment to avoid double taxation where interim

distributions made to a CFC

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 19

Object

19. The object of this Subdivision is to repeal section 431B of the

Principal Act so that there is no double taxation of Part XI amounts included

in the attributable income of a CFC where an interim dividend is paid, or an

interim distribution of trust income is made, to the CFC.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 20

Repeal of section

20. Section 431B of the Principal Act is repealed.

Subdivision F - Amendments relating to corporate limited partnerships

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 21

Object

21. The object of this Subdivision is to ensure that corporate limited

partnerships are treated in the same way as companies for the purposes of

Parts X and XI of the Principal Act and related provisions.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 22

"Dividend" includes distribution of corporate limited partnership

22. Section 94L of the Principal Act is amended by inserting "or to a

dividend within the meaning of section 6" after "dividend".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 23

Repeal of section and substitution of new section

23. Section 94T of the Principal Act is repealed and the following section

is substituted:

Residence of corporate limited partnership

"94T. For the purposes of the income tax law, the partnership is:

(a) a resident; and

(b) a resident within the meaning of section 6; and

(d) a resident of Australia within the meaning of section 6;

if and only if:

(e) the partnership was formed in Australia; or

(f) either:

(i) the partnership carries on business in Australia; or

(ii) the partnership's central management and control is in

Australia.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 24

Application

24. The amendments made by this Subdivision apply to assessments in respect

of income of the 1994-95 year of income and of all later years of income.

Subdivision G - Amendments relating to FIF loss deductions

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 25

Object

25. The object of this Subdivision is to ensure that a foreign investment

fund loss deduction under section 532 or 533 of the Principal Act is not

quarantined under section 79D or taken into account under section 160AFD of

that Act.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 26

Losses of previous years

26. Section 160AFD of the Principal Act is amended by inserting "(other than

a deduction under section 532 or 533)" after "any deduction" in the definition

of "foreign income deduction" in subsection (9).

Subdivision H - Expression of FIF losses in same currency as FIF

attribution surpluses

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 27

Object

27. The object of this Subdivision is to ensure that, for the purposes of

working out deductions under Division 17 of Part XI of the Principal Act,

foreign investment fund losses are expressed in the same currency (i.e.

Australian dollars) as FIF attribution surpluses.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 28

Insertion of new section

28. After section 533 of the Principal Act the following section is inserted

in Division 17 of Part XI:

Foreign investment fund losses to be expressed in Australian currency

"533A. For the purposes of section 532 or 533, if the foreign investment

fund loss mentioned in that subsection is not expressed in Australian

currency, it is to be converted to the corresponding amount in Australian

currency in accordance with the rate of exchange applicable at the end of the

notional accounting period.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 29

Application

29. The amendment made by this Subdivision applies to notional accounting

periods ending after the commencement of the 1994-95 year of income.

Subdivision I - Expression of unapplied previous FIF and FLP losses in

same currency as gross FIF and FLP income

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 30

Object

30. The object of this Subdivision is to ensure that unapplied previous

foreign investment fund losses are calculated in the same currency as gross

foreign investment fund income for the purposes of subsections 542(2) and

600(2) of the Principal Act.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 31

Step 2-Calculation of foreign investment fund income

31. Section 542 of the Principal Act is amended by adding at the end the

following subsection:

"(8) For the purposes of applying subsections (5), (6) and (7) in working

out the amount of an unapplied previous foreign investment fund loss, if any

amount that is to be taken into account under any of those subsections in

relation to a notional accounting period is not expressed in the same currency

as the gross foreign investment fund income mentioned in paragraph (2)(a), the

amount is to be converted to the corresponding amount in that currency in

accordance with the rate of exchange applicable at the end of that notional

accounting period.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 32

Step 2-Calculation of foreign investment fund income

32. Section 600 of the Principal Act is amended by adding at the end the

following subsection:

"(8) For the purposes of applying subsections (5), (6) and (7) in working

out the amount of an unapplied previous foreign investment fund loss, if any

amount that is to be taken into account under any of those subsections in

relation to a notional accounting period is not expressed in the same currency

as the gross foreign investment fund income mentioned in paragraph (2)(a), the

amount is to be converted to the corresponding amount in that currency in

accordance with the rate of exchange applicable at the end of that notional

accounting period.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 33

Application

33. The amendments made by this Subdivision apply to the calculation of

amounts of foreign investment fund income in respect of notional accounting

periods ending after the commencement of the 1994-95 year of income.

Subdivision J - Attribution percentages under calculation method not to

exceed 100%

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 34

Object

34. The object of this Subdivision is to ensure that the attribution

percentages applicable to taxpayers in respect of a FIF, and hence their

shares of the calculated profit of the FIF, do not exceed 100%.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 35

How to work out attribution percentage applicable to taxpayer in

respect of interest or interests in foreign company

35. Section 581 of the Principal Act is amended by adding at the end the

following subsection:

"(4) If, apart from this subsection, the sum of the attribution percentages

at the end of the relevant period in relation to the company of all the

taxpayers to whom the operative provision applies in relation to the company

in relation to the relevant period would exceed 100%, the attribution

percentage of each taxpayer is the percentage worked out using the formula:

Attribution percentage of the

taxpayer concerned

X 100%

Sum of attribution percentages of

all of the taxpayers to whom the

operative provision applies .".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 36

Procedure to be followed

36. Section 582 of the Principal Act is amended by inserting after

subsection (6) the following subsection:

"(6A) If, apart from this subsection, the sum of the attribution percentages

at the end of the relevant period in relation to the trust of all the

taxpayers to whom the operative provision applies in relation to the trust in

relation to the relevant period would exceed 100%, the attribution percentage

of each taxpayer is the percentage worked out using the formula:

Attribution percentage of the

taxpayer concerned

X 100%

Sum of attribution percentages of

all of the taxpayers to whom the

operative provision applies .".

Subdivision K - Removal of differences between exemption under section 523

and exemption under section 511

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 37

Object

37. The object of this Subdivision is to bring the wording of

sub-subparagraphs 523(b)(ii)(C) and (D) of the Principal Act into line with

sub-subparagraphs 511(b)(ii)(C) and (D) of that Act.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 38

Exemption

38.(1) Section 523 of the Principal Act is amended by adding at the end of

sub-subparagraph (b)(ii)(C) "or by a wholly-owned subsidiary of the company

that was principally engaged in carrying on the business of providing those

services through directors or employees of that subsidiary".

(2) Section 523 of the Principal Act is amended by omitting from

sub-subparagraph (b)(ii)(D) "or by a wholly-owned subsidiary of the company

that was principally engaged in carrying on the business of providing those

services through directors or employees of that subsidiary".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 39

Application

39. The amendment made by subsection 38(2) applies to notional accounting

periods ending after the commencement of the 1994-95 year of income.

Subdivision L - Avoidance of double taxation in respect of CFC dividends

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 40

Object

40. The object of this Subdivision is to exclude dividends from CFC measure

assessability under section 458 of the Principal Act to the extent that they

are paid out of amounts previously taxed under the FIF measures in that Act.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 41

Assessability in respect of certain dividends paid by a CFC

41. Section 458 of the Principal Act is amended by omitting from the

definition of the formula component GD in subsections (1), (3) and (5)

"grossed-up amount of any attribution debit" and substituting "sum of the

grossed-up amounts of any attribution debit and any FIF attribution debit".

Subdivision M - Correction of minor error

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 42

Object

42. The object of this Subdivision is to correct a minor error in Part XI of

the Principal Act.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 43

Exemption

43. Section 511 of the Principal Act is amended by omitting "subparagraph

(a)(i)" and substituting "paragraph (a)".

Division 4 - Amendments to provide an exemption from dividend

withholding tax

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 44

Object

44. The object of this Division is to provide an exemption from dividend

withholding tax for dividends paid out of certain foreign source non-portfolio

dividend income of Australian resident companies.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 45

Insertion of new heading

45. After the heading to Division 11A of Part III of the Principal Act the

following heading is inserted:

"Subdivision A-General".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 46

Liability to withholding tax

46. Section 128B of the Principal Act is amended by inserting after

paragraph (3)(ga) the following paragraph:

"(gaa) income that consists of so much of a dividend as:

(i) remains after deducting any amount that has been franked in

accordance with section 160AQF; and

(ii) does not exceed the foreign dividend account declaration

amount (if any) in respect of the dividend under section 128TC;".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 47

Certain income not included in assessable income

47. Section 128D of the Principal Act is amended by inserting "or (gaa)"

after "128B(3)(ga)".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 48

Insertion of new Subdivision

48. After section 128R of the Principal Act the following Subdivision is

inserted in Division 11A:

"Subdivision B-Foreign dividend accounts

Object

"128S. The object of this Subdivision is to make provision for the operation

of foreign dividend accounts for the purposes of the exemption from tax

provided by paragraph 128B(3)(gaa).

Amount of a dividend

"128SA. For the purposes of this Subdivision, in determining the amount of a

dividend paid to a resident company:

(a) subsection 6AC(2) (which increases the amount of a dividend by an amount

of foreign underlying tax) is to be disregarded; and

(b) any foreign tax paid or payable by the company in respect of the

dividend, where the company was or is personally liable for the tax, is to be

deducted.

FDA surplus

Conditions for surplus

"128T.(1) A 'foreign dividend account surplus' or 'FDA surplus' exists for a

resident company at a particular time if the company's total FDA credits

arising before that time exceed its total FDA debits arising before that time.

Amount of surplus

"(2) The amount of the surplus is equal to the amount of the excess.

FDA credit

Conditions for credit

"128TA.(1) A 'foreign dividend account credit' or 'FDA credit' arises for a

resident company if:

(a) a dividend that is exempt from income tax to any extent under section

23AJ is paid to the company on or after 1 July 1994; or

(b) a non-portfolio dividend (within the meaning of section 317) is paid to

the company on or after 1 July 1994 and the company is, for the purposes of

Division 18 (which deals with credits in respect of foreign tax), taken to

have paid and to have been personally liable for foreign tax in respect of the

dividend; or

(within the meaning of subsection 51AE(16)) to it, where an FDA debit arises

under paragraph 128TB(1)(a) for the other company in relation to the dividend.

Amount of credit

"(2) The amount of credit arising under subsection (1) is equal to:

(a) in a paragraph (1)(a) case-so much of the dividend as is exempt under

section 23AJ; or

(b) in a paragraph (1)(b) case-the amount of the dividend, to the extent

that it is not exempt from income tax under section 23AI or 23AK; or

Timing of credit

"(3) The credit arises when the dividend is paid to the company.

FDA debit

Conditions for debit

"128TB.(1) A 'foreign dividend account debit' or 'FDA debit' arises for a

resident company if:

(a) the company makes an FDA declaration under section 128TC in relation to

dividends paid on a particular day; or

(b) on or after 1 July 1994, the company incurs expenditure that is not an

allowable deduction of the company for any year of income, but that would be

an allowable deduction to any extent if section 23AJ were disregarded; or

(i) is an allowable deduction of the company for a year of income;

and

(ii) either relates exclusively to a dividend covered by

paragraph 128TA(1)(b) or (c) or may appropriately be related to such a

dividend; or

(d) there is an Australian-taxable dividend amount for the company in

relation to a year of income (see subsection (2)) ending on or after 1 July

1994.

Meaning of "Australian-taxable dividend amount"

"(2) For the purposes of paragraph (1)(d), there is an 'Australian-taxable

dividend amount' in relation to a year of income for a company of an amount

worked out using the formula:

Co. tax (Grossed-up dividend - Dividend ) - Foreign tax

rate ( amount deductions) on dividends

Co. tax rate

where:

'Co. tax rate' means the general company tax rate, within the meaning of

section 160APA, for the year of income;

'Grossed-up dividend amount' means the sum of the amount of:

(a) all dividends paid to the company in the year of income that are covered

by paragraph 128TA(1)(b); and

(b) all amounts covered by the formula component Foreign tax on dividends;

'Dividend deductions' means the sum of the amounts of all FDA debits arising

under paragraph 128TB(1)(c) during the year of income in relation to dividends

paid to the company in the year of income that are covered by paragraph

128TA(1)(b);

'Foreign tax on dividends' means the total of all foreign tax that, for the

purposes of Division 18 (which deals with credits in respect of foreign tax),

the company is taken to have paid and to have been personally liable for, in

respect of dividends paid to the company in the year of income that are

covered by paragraph 128TA(1)(b).

Amount of debit

"(3) The amount of the debit arising under subsection (1) is:

(a) in a paragraph (1)(a) case-the sum of the FDA declaration amounts for

all of the dividends to which the declaration relates; or

(b) in a paragraph (1)(b) case-so much of the expenditure as would be an

allowable deduction if section 23AJ were disregarded; or

(i) if the dividend mentioned in that paragraph is covered by

paragraph 128TA(1)(b)-the amount of the expenditure; or

(ii) if the dividend mentioned in that paragraph is covered by

paragraph 128TA(1)(c)-the amount worked out using the formula:

Amount of expenditure X Amount of FDA debit mentioned in paragraph

128TA(1)(c)

Amount of dividend

; or

(d) in a paragraph (1)(d) case-the same as the Australian-taxable dividend

amount.

Timing of debit

"(4) The debit arises:

(a) in a paragraph (1)(a) case-immediately after the beginning of the day on

which the dividends, to which the FDA declaration relates, are paid; or

(b) in a paragraph (1)(b) or (c) case-when the expenditure is incurred; or

FDA declaration, FDA declaration percentage and FDA declaration amount

Declaration to specify a percentage for all dividends

"128TC.(1) If there is an FDA surplus for a resident company on the day on

which it pays one or more dividends, the company may, before it pays the

dividends, make a written declaration (a 'foreign dividend account

declaration' or 'FDA declaration') specifying a percentage (the 'foreign

dividend account declaration percentage' or 'FDA declaration percentage') in

relation to all of the dividends concerned.

Limit on percentage that may be specified

"(2) The FDA declaration percentage must be such that the amount worked out

using the following formula is not greater than the FDA surplus at the

beginning of the day:

FDA Total Maximum Total calculation

declaration non-resident + non-resident X value for dividend

percentage dividends dividend purposes of other

percentage shares

where:

'Total non-resident dividends' means the sum of all dividends paid on the

day by the company to non-resident shareholders or companies that are related

(within the meaning of subsection 51AE(16));

'Maximum non-resident dividend percentage' means the highest percentage, for

any share in respect of which a dividend was paid on the day to a non-resident

shareholder or to a company that is related (within the meaning of subsection

51AE(16)), worked out using the formula:

Amount of the dividend

X 100%

Calculation value for dividend purposes

of the share (see subsection (3))

'Total calculation value for dividend purposes of other shares' means the

sum of the calculation value for dividend purposes (see subsection (3)) of all

shares in the company existing on the day, other than those on which a

dividend was paid on the day to a non-resident shareholder or to a company

that is related (within the meaning of subsection 51AE(16)).

Meaning of "calculation value for dividend purposes"

"(3) In subsection (2), 'calculation value for dividend purposes' means:

(a) in relation to a preference share-the amount (for example in the case of

a redeemable preference share, the sum of the paid-up value of the share, any

premium paid on the share and any other amount payable on a redemption of the

share) that, under the terms on which the preference share was issued, is, for

the purpose of working out the amount of a dividend to be paid on the share,

to be multiplied by the rate of the dividend; or

(b) in relation to any other share-the nominal value of the share.

FDA declaration amount

"(4) The 'foreign dividend account declaration amount' or 'FDA declaration

amount' for a particular dividend paid on the day is the product of the FDA

declaration percentage and the amount of the dividend.

Where FDA surplus exceeded by declaration

"(5) If the company, in purporting to make an FDA declaration, incorrectly

specifies a percentage such that the amount in the formula in subsection (2)

exceeds the FDA surplus at the beginning of the day, the declaration is

nevertheless valid, but (subject to subsection 128TE(1)) has effect, and is

taken always to have had effect, for all purposes as if the percentage

required for the amounts in the formula to equal the FDA surplus had been

specified instead of the percentage actually specified.

Dividend statement

Content of statement

"128TD.(1) If a company makes an FDA declaration in relation to one or more

dividends, it must, before or at the time of payment of any of the dividends

to a shareholder, give to the shareholder a statement in accordance with this

subsection:

(a) if the FDA declaration percentage in the FDA declaration is 100%-to the

effect that, if the dividend is derived by a non-resident, the non-resident

is, because of paragraph 128B(3)(gaa), not liable to pay withholding tax on

the dividend; or

(b) in any other case-that specifies:

(i) the amount of the dividend on which, because of paragraph

128B(3)(gaa), a non-resident who derives the dividend is not liable to pay

withholding tax; and

(ii) the amount of the dividend to which neither paragraph

128B(3)(ga) nor (gaa) applies so as to remove any liability to withholding tax

of a non-resident who derives the dividend; and

(iii) any amount deducted from the dividend under section 221YL.

Inclusion in section 160AQH

"(2) The statement may be included in any statement that the company is

required by section 160AQH to give to the shareholder.

Form of statement

"(3) If it is so included, the statement must be in the approved form

required by section 160AQH. If it is not so included, the statement must be in

a form approved in writing by the Commissioner for the purposes of this

section.

Other information

"(4) If either form requires other information relating to the dividend or

any matter relevant to the operation of this Division, the statement must set

out that information.

Penalty for setting out incorrect amounts in dividend statement

Additional tax by way of penalty

"128TE.(1) Subject to subsection (2), if a company, purportedly under

section 128TD, gives a shareholder a statement (whether or not included in a

statement purportedly given under section 160AQH) that, disregarding

subsection 128TC(5), is reasonably likely to cause the belief that:

(a) no withholding tax is liable to be paid on a dividend, where withholding

tax is actually liable to be paid; or

(b) an amount of withholding tax is liable to be paid on a dividend, where

(taking into account subsection 128TC(5)) that amount is less than is actually

liable to be paid;

the company is liable to pay, by way of penalty, additional tax equal to the

amount of the withholding tax, or the shortfall in the amount of the

withholding tax, as the case requires.

Avoidance of double tax where Part IIIAA penalty

"(2) If:

(a) either:

(i) the company includes the statement in a statement that the

company purportedly gives under section 160AQH; or

(ii) the company gives the shareholder a separate statement in

relation to the dividend purportedly under section 160AQH; and

(b) the company becomes liable to pay additional tax under section 160ARY in

respect of the statement purportedly given under section 160AQH;

then subsection (1) of this section applies as if the amount specified in

accordance with subparagraph 128TD(1)(b)(ii) in the statement purportedly

given under section 128TD were the amount of the dividend reduced by the sum

of:

and

(d) so much of the dividend as has been franked in accordance with section

160AQF.

Assessment

"(3) The Commissioner must make an assessment of the additional tax payable

under subsection (1).

Notice of assessment

"(4) This Act does not prevent notice of the assessment being incorporated

in a notice of any other assessment made in respect of the company under this

Act.

Collection and recovery

"(5) In sections 170, 172, 174, 204, 206, 207, 207A, 208, 209, 214, 215,

218, 254, 258 and 259, but not in any other section of this Act, 'income tax'

or 'tax' includes additional tax payable under subsection (1).

Company to keep records

"128TF. Section 262A applies for the purposes of this Subdivision as if:

(a) a reference to a person carrying on a business were a reference to a

company; and

(b) a reference to income and expenditure were a reference to matters

relevant to ascertaining whether there is an FDA surplus.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 49

Application

49. The amendments made by this Division apply to dividends paid by or to a

company on or after 1 July 1994.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 50

Transitional

50. If a company pays one or more dividends on a day in the period from the

beginning of 1 July 1994 until the commencement of this Division, subsection

128TC(1) of the Principal Act as amended by this Division has effect as if the

reference to the making of a declaration before it pays the dividends were

instead a reference to the making of the declaration within 90 days after the

commencement of this Division.

Division 5 - Amendments relating to home child care allowance

and dependant rebate

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 51

Object

51. The object of this Division is, basically:

(a) to exempt home child care allowance payments from tax; and

(b) to reduce a taxpayer's entitlement to a rebate of tax in respect of a

dependent spouse if home child care allowance is paid to the spouse.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 52

Income of certain persons serving with an armed force under the

control of the United Nations

52. Section 23AB of the Principal Act is amended by omitting subparagraph

(7)(a)(ii) and substituting the following subparagraph:

"(ii) an amount equal to 50% of the sum of the following rebates (if any) in

respect of the year of income:

(A) any rebate to which the taxpayer is entitled under section

159K or 159L;

(B) any rebate to which the taxpayer is entitled under section

159J in respect of a dependant included in class 2, 5 or 6 in the table in

subsection 159J(2);

subsection 159J(1A), be entitled under section 159J in respect of a dependant

included in class 3 or 4 in the table in subsection 159J(2);

(D) any rebate to which the taxpayer would be entitled under

section 159J in respect of a dependant included in class 1 in the table in

subsection 159J(2) if the amendments made by Division 5 of Part 2 of the

Taxation Laws Amendment Act (No. 3) 1994 had not been made;".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 53

Index of payments covered by Subdivision

53. Section 24AB of the Principal Act is amended by inserting after the

entry in the table relating to family payment advance the following entry:

"Home child care allowance 24ABXA".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 54

Insertion of new section

54. After section 24ABX of the Principal Act the following section is

inserted:

Home child care allowance

"24ABXA. Payments of home child care allowance under Part 2.18 of the Social

Security Act 1991 are exempt.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 55

Rebates for residents of isolated areas

55. Section 79A of the Principal Act is amended by omitting from subsection

(4) the definition of "relevant rebate amount" and substituting the following

definition:

" 'relevant rebate amount', in relation to a taxpayer in relation to a year

of income, means the sum of the following rebates (if any):

(a) any rebate to which the taxpayer is entitled in respect of the year of

income under section 159K or 159L;

(b) any rebate to which the taxpayer is entitled under section 159J in

respect of a dependant included in class 2, 5 or 6 in the table in subsection

159J(2);

159J(1A), be entitled under section 159J in respect of a dependant included in

class 3 or 4 in the table in subsection 159J(2);

(d) any rebate to which the taxpayer would be entitled under section 159J in

respect of a dependant included in class 1 in the table in subsection 159J(2)

if the amendments made by Division 5 of Part 2 of the Taxation Laws Amendment

Act (No. 3) 1994 had not been made.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 56

Rebates for members of Defence Force serving overseas

56. Section 79B of the Principal Act is amended:

(a) by omitting subparagraph (2)(a)(ii) and substituting the following

subparagraph:

"(ii) an amount equal to 50% of the concessional rebate amount;

or";

(b) by omitting paragraph (4)(b) and substituting the following paragraph:

"(b) an amount equal to 50% of the concessional rebate amount.";

subparagraph:

"(ii) an amount equal to 50% of the concessional rebate amount;";

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

" 'concessional rebate amount', in relation to a taxpayer in relation to a

year of income, means the sum of the following rebates (if any):

(a) any rebate to which the taxpayer is entitled under section 159K or 159L

in respect of the year of income;

(b) any rebate to which the taxpayer is entitled under section 159J in

respect of a dependant included in class 2, 5 or 6 in the table in subsection

159J(2);

159J(1A), be entitled under section 159J in respect of a dependant included in

class 3 or 4 in the table in subsection 159J(2);

(d) any rebate to which the taxpayer would be entitled under section 159J in

respect of a dependant included in class 1 in the table in subsection 159J(2)

if the amendments made by Division 5 of Part 2 of the Taxation Laws Amendment

Act (No. 3) 1994 had not been made;".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 57

Indexation of rebate amounts in sections 159J, 159K and 159L

57. Section 159HA of the Principal Act is amended by adding at the end the

following subsection:

"(8) To avoid doubt, the reference in paragraph (a) of the definition of

'indexable amount' in subsection (7) to an amount specified in subsection

159J(2) does not include a reference to the amount of $1,452 mentioned in

subsection 159J(1C).".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 58

Rebates for dependants

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

(a) by omitting from subsection (1B) "1 or";

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

"(1C) If:

(a) apart from subsection (1A), a taxpayer would be entitled in his or her

assessment in respect of income of a year of income to a rebate under this

section in respect of a dependant included in class 3 or 4 in the table in

subsection (2); and

(b) disregarding this subsection and subsections (3) to (6), the taxpayer is

entitled in that assessment to a rebate under this section in respect of a

dependant included in class 1 in that table; and

$1,452;

the entitlement to a rebate under this section in respect of the dependant

included in class 1 in the table is to be calculated as if the amount

applicable under the table in respect of that dependant were $1,452.";

"(5E) If:

(a) after taking into account any reduction because of the application of

any other provision of this section, a rebate is allowable to a taxpayer under

this section for a year of income in respect of a dependant who is the spouse

of the taxpayer; and

(b) an amount or amounts of home child care allowance (within the meaning of

the Social Security Act 1991) were paid to the spouse at any time during the

year of income;

the rebate is to be reduced or further reduced, as the case requires, by the

amount, or the sum of the amounts, of the home child care allowance.";

(d) by inserting "home child care allowance," before "or a child disability

allowance" in paragraph (a) of the definition of "separate net income" in

subsection (6).

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 59

Uplifted provisional tax amount

59. Section 221YCAA of the Principal Act is amended:

(a) by inserting "or, if the amendments made by Division 5 of Part 2 of the

Taxation Laws Amendment Act (No. 3) 1994 had not been made, would have been"

before "entitled" in subparagraph (n)(i) of the definition of "Qualifying

reductions" in subsection (2);

(b) by inserting "(other than in respect of a spouse of the taxpayer)" after

"section 159J" in paragraph (p) of the definition of "Qualifying reductions"

in subsection (2);

reductions" in subsection (2) the following paragraph:

"(pa) where the taxpayer was entitled to a rebate, in the taxpayer's

assessment in respect of income of the preceding year of income, under section

159J in respect of a spouse of the taxpayer:

(i) if the preceding year of income was the 1993-94 year of income

and subsection 159J(1B) applied in relation to the rebate-25%; or

(ii) if the preceding year of income was the 1993-94 year of

income and subsection 159J(1B) did not apply in relation to the rebate-100%;

(iii) if the preceding year of income is the 1994-95 year of

income, or any later year of income, and subsection 159J(1C) did not apply in

relation to the rebate-100%;

of the amount that would have been the amount of that rebate if increases in

the amounts of rebates arising out of the operation of section 159HA in

relation to the current year of income had been in force and had applied to

assessments in respect of the preceding year of income; and".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 60

Provisional tax on estimated income

60. Section 221YDA of the Principal Act is amended by inserting in paragraph

(1)(da) and subparagraph (2)(a)(ii) "or to which subsection 159J(1C) applies"

after "other than section 159N".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 61

Application

61.(1) The amendments made by sections 53 and 54 apply to payments made on

or after 29 September 1994.

(2) Subject to section 62, the amendments made by sections 52, 55, 56, 57

and 58 apply to assessments in respect of income of the 1994-95 year of income

and of all later years of income.

(3) The amendments made by section 59 apply to provisional tax (including

instalments) payable in respect of income of the 1994-95 year of income and of

all later years of income.

(4) The amendments made by section 60 apply to estimates or calculations of

provisional tax (including instalments) payable in respect of income of the

1995-96 year of income and of all later years of income.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 62

Transitional

62.(1) Subject to this section, the amount of rebate of tax to which a

taxpayer is entitled, in his or her assessment for the 1994-95 year of income

under section 159J of the Income Tax Assessment Act 1936 in respect of a

spouse included in class 1 in the table in subsection 159J(2), is worked out

using the formula:

Pre-29 Sep component Post-28 Sep component

(old law) + (new law)

where:

"Pre-29 Sep component (old law)" means the amount of any rebate in respect

of the spouse to which the taxpayer would be entitled for the year of income

under section 159J on the following assumptions:

(a) that the amendments made by this Division were disregarded;

(b) that references in section 159J to the year of income were instead

references to the part of the year of income before 29 September 1994;

by section 159HA, which indexes amounts) were instead only 90/365 of those

amounts;

(d) that the reference in subsection 159J(4) to $282 were instead a

reference to $70;

"Post-28 Sep component (new law)" means the amount of any rebate in respect

of the spouse to which the taxpayer would be entitled for the year of income

under section 159J on the following assumptions:

(a) that the amendments in this Division (disregarding this section) were

made;

(b) that references in section 159J to the year of income were instead

references to the part of the year of income after 28 September 1994;

159HA, which indexes amounts) were instead only 275/365 of those amounts;

(d) that the reference in subsection 159J(4) to $282 were instead a

reference to $212.

(2) If, disregarding the amendments made by this Division, a taxpayer is not

entitled to a rebate under section 159J of the Principal Act in his or her

assessment for the 1994-95 year of income in respect of a spouse included in

class 1 in the table in subsection 159J(2) of that Act, the taxpayer is not

entitled to any rebate in respect of the spouse in his or her assessment for

the 1994-95 year of income:

(a) under subsection (1) of this section; or

(b) under section 159J of the Principal Act as amended by this Division.

Division 6 - Amendments relating to provisional tax

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 63

Object

63. The object of this Division is to reduce the provisional tax uplift

factor for 1994-95 from 10% to 8%.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 64

Interpretation

64. Section 221YA of the Principal Act is amended by omitting from

subsection (1) the definition of "provisional tax uplift factor" and

substituting the following definition:

" 'provisional tax uplift factor':

(a) in relation to the 1994-95 year of income-means 8%; and

(b) in relation to a later year of income-means, until the Parliament

otherwise provides, 10%;".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 65

Application

65. The amendment made by this Division applies in relation to provisional

tax (including instalments) payable for the 1994-95 year of income and for all

later years of income.

Division 7 - Amendments relating to short-term asset sales

Subdivision A - Object of Division

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 66

Object

66. The object of this Division is to repeal section 26AAA of the Principal

Act because it is redundant, and to make consequential amendments.

Subdivision B - Repeal of section 26AAA

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 67

Repeal of section

67. Section 26AAA of the Principal Act is repealed.

Subdivision C - Consequential amendments

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 68

Interpretation

68. Section 6 of the Principal Act is amended:

(a) by inserting "and" after "held by the taxpayer," in the definition of

"income from personal exertion" or "income derived from personal exertion" in

subsection (1);

(b) by omitting all the words from and including "and any profit" to and

including "26AAA," from the definition of "income from personal exertion" or

"income derived from personal exertion" in subsection (1).

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 69

Sales of securities purchased at a discount

69. Section 23J of the Principal Act is amended by omitting from subsection

(3) ", 26AAA".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 70

Money paid before 1 July 1991 on shares in management and investment

companies

70. Section 77F of the Principal Act is amended:

(a) by omitting from subsection (1) the definitions of "private company" and

"private trust estate";

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

" 'private company' means a company other than one whose shares are listed

for quotation in the official list of a stock exchange in Australia or

elsewhere;

'private trust estate' means a trust estate, other than a unit trust whose

units are:

(a) listed for quotation in the official list of a stock exchange in

Australia or elsewhere; or

(b) ordinarily available for subscription or purchase by the public;".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 71

Interpretation

71. Section 124ZF of the Principal Act is amended by omitting from

subsection (1) the definition of "private trust estate" and substituting the

following definition:

" 'private trust estate' means a trust estate, other than a unit trust whose

units are:

(a) listed for quotation in the official list of a stock exchange in

Australia or elsewhere; or

(b) ordinarily available for subscription or purchase by the public;".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 72

Part applies in respect of disposals of assets

72. Section 160L of the Principal Act is amended by omitting paragraphs

(3)(b), (4)(b) and (5)(b).

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 73

Disposal of shares or interest in trust

73. Section 160ZZT of the Principal Act is amended by omitting subsection

(2) and substituting the following subsection:

"(2) For the purposes of this section:

(a) a reference to property generally or to a particular kind of property

includes a reference to an estate or interest in property, or in that kind of

property; and

(b) a reference to the net worth of a company or trust estate is a reference

to the total value of the assets of the company or trust estate as reduced by

the total liabilities of the company or trust estate; and

without the payment of any other consideration), it is taken to have been

purchased; and

(d) if a company issues shares in itself to a person as, or as part of, the

consideration for the sale of property by the person to the company, the

person is taken to have purchased those shares; and

(e) if one or more persons (the 'transferors') transfer property, with or

without consideration, to one or more other persons (the 'transferees') the

transfer is taken to constitute:

(i) the sale of the property by the transferors; and

(ii) the purchase of the property by the transferees; and

(f) if, under a contract, land is sold or purchased, it is taken to be sold

or purchased on the day the contract is made.".

Subdivision D - Application of amendments

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 74

Application

74. If an assessment would be affected by the amendments made by this

Division, the amendments are to be disregarded in making the assessment.

Division 8 - Amendments relating to home loan interest rebate

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 75

Object

75. The object of this Division is to repeal redundant provisions relating

to rebates of tax for home loan interest payments.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 76

Repeal of Subdivision

76. Subdivision AA of Division 17 of Part III of the Principal Act is

repealed.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 77

Amendment of assessments

77. Section 170 of the Principal Act is amended by omitting from subsection

(10) "159ZJ(2B), 159ZJ(6) or 159ZNA(5), section 159ZO, 159ZP or" and

substituting "section".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 78

Provisional tax on estimated income

78. Section 221YDA of the Principal Act is amended by omitting from

paragraph (1)(da) and subparagraph (2)(a)(ii) ", AA".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 79

Application

79. If an assessment would be affected by the amendments made by this

Division, the amendments are to be disregarded in making the assessment.

Division 9 - Deductions for bequests of significant cultural value made

to certain institutions

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 80

Object

80. The object of this Division is to allow a deduction for bequests of

significant cultural value that are made to certain institutions under the

Cultural Bequests Program.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 81

Deduction for gifts, pensions etc.

81. Section 78 of the Principal Act is amended:

(a) by omitting from the table in subsection (2):

Gifts to The Australiana Fund, (6) (13), (14), (15) (16)

libraries, museums, or art

galleries

and substituting:

Gifts to The Australiana (6), (6A) (13), (14), (15), (15A)

Fund, libraries, museums, (16), (16A)

or art galleries

(b) by inserting in paragraph (4)(f) "(6A)," after "(6),";

(d) by inserting after subsection (6) the following subsections:

Deductions for testamentary gifts of property-Cultural Bequests Program

"(6A) Subject to subsection (6F), a testamentary gift made by a taxpayer

under the scheme formulated by the Australian Government and known as the

Cultural Bequests Program to:

(a) The Australiana Fund; or

(b) a public library in Australia; or

(d) a public art gallery in Australia; or

(e) an institution in Australia consisting of a public library, a public

museum and a public art gallery or any 2 of them;

is an allowable deduction if:

(f) the gift is property (other than an estate or interest in land or in a

building or part of a building); and

(g) the property is given to, and accepted by, The Australiana Fund or the

authority or institution concerned for inclusion in the collection, or any of

the collections, maintained or being established by that Fund, authority or

institution; and

(h) the Minister for Communications and the Arts has given the taxpayer a

certificate under subsection (6B) approving the gift and specifying the value

of the gift for the purposes of this subsection; and

(i) the value of the gift, as specified in the certificate, is $2 or more.

Gifts covered by subsection (6A)-issue of certificates

"(6B) Subject to subsections (6C) and (6E), the Minister for Communications

and the Arts may, on written application by a taxpayer, give the taxpayer a

certificate:

(a) approving a gift for the purposes of subsection (6A); and

(b) specifying the value of the gift for the purposes of that subsection;

and

requires.

Gifts covered by subsection (6A)-approval to be in accordance with Ministerial

guidelines

"(6C) A decision of the Minister for Communications and the Arts:

(a) to approve a gift for the purposes of subsection (6A); or

(b) to specify a particular value for a gift for the purposes of that

subsection;

must be made in accordance with written guidelines made by that Minister under

this subsection.

Gifts covered by subsection (6A)-content of guidelines

"(6D) The guidelines made under subsection (6C) may require the Minister for

Communications and the Arts, in approving gifts and specifying values, to take

into account:

(a) specified criteria; or

(b) recommendations of particular bodies; or

Gifts covered by subsection (6A)-restrictions on issue of certificates

"(6E) The Minister for Communications and the Arts:

(a) must determine, in writing, an amount as the maximum approval amount for

certificates given under subsection (6B) for each financial year; and

(b) must not give any certificates under that subsection in a financial year

before specifying the maximum approval amount for that financial year; and

in the certificate, when added to the values specified in all certificates

previously given under that subsection in that financial year, would exceed

the maximum approval amount for certificates given in that financial year.

Gifts covered by subsection (6A)-assessment in which deduction allowable

"(6F) Subject to subsection (6G), a deduction to which subsection (6A)

applies is allowable in the assessment of the taxpayer in respect of income of

the year of income in which the taxpayer died and not otherwise.

Gifts covered by subsection (6A)-when deduction allowable in assessment of

taxpayer's estate

"(6G) If:

(a) an amount (the 'section 79C amount') of the deduction to which

subsection (6A) applies is not allowable because of section 79C in the

assessment of the taxpayer in respect of income of the year of income in which

the taxpayer died; and

(b) the taxpayer died before the last day of a year of income;

the section 79C amount is allowable in the assessment of the taxpayer's estate

in respect of income of the remainder of that year of income.";

(e) by inserting after subsection (15) the following subsection:

Value of gift-subsection (6A)

"(15A) For the purposes of subsection (6A), the value of a gift of property

is the amount specified in the certificate given by the Minister for

Communications and the Arts under subsection (6B) in relation to the gift.";

(f) by inserting after subsection (16) the following subsection:

Testamentary gifts made at time of death

"(16A) To avoid doubt, a testamentary gift is taken to be made at the time

of death of the taxpayer who made the gift.";

(g) by inserting after subsection (25) the following subsection:

Disallowable instruments

"(25A) The following are disallowable instruments for the purposes of

section 46A of the Acts Interpretation Act 1901:

(a) guidelines made under subsection (6C); and

(b) determinations under paragraph (6E)(a).".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 82

Part applies in respect of disposals of assets

82. Section 160L of the Principal Act is amended by adding at the end the

following subsection:

"(9) This Part does not apply in respect of the disposal by a person of an

asset under the scheme formulated by the Australian Government and known as

the Cultural Bequests Program.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 83

Application

83. The amendments made by this Division apply to gifts made by taxpayers

who die on or after 1 July 1994.

Division 10 - Amendments relating to gifts

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 84

Object

84. The object of this Division is to amend section 78 of the Principal Act

to correct minor technical errors.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 85

Deductions for gifts, pensions etc.

85. Section 78 of the Principal Act is amended:

(a) by omitting "the" from item 1.2.1 of table 1 in subsection (4) and

substituting "The";

(b) by inserting "or public fund" after "institution" in item 5.1.2 of table

5 in subsection (4).

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 86

Application

86. The amendments made by this Division apply in relation to:

(a) gifts and contributions made on or after 1 July 1993; and

(b) pensions, gratuities and retiring allowances paid on or after 1 July

1993.

Division 11 - Partner allowance

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 87

Object

87. The object of this Division is to give to the partner allowance paid

under the Social Security Act 1991 the same tax treatment as is given to other

social security allowances.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 88

Rebate in respect of certain pensions, benefits etc.

88. Section 160AAA of the Principal Act is amended by omitting "or 2.15"

from paragraph (a) of the definition of "rebatable benefit" in subsection (1)

and substituting ", 2.15 or 2.15A".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 89

Index of payments covered by Subdivision

89. Section 24AB of the Principal Act is amended by inserting in the index

of payments set out in that section:

"Partner allowance Section 24ABPA"

after:

"Newstart allowance Section 24ABM".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 90

Section 24ABA Interpretation-supplementary amounts

90. Section 24ABA of the Principal Act is amended by inserting "Partner

allowance" immediately below "Newstart allowance".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 91

Insertion of new section

91. After section 24ABP of the Principal Act the following section is

inserted:

Partner allowance

"24ABPA.(1) The treatment of payments of partner allowance under Part 2.15A

of the Social Security Act 1991 is as follows:

(a) the supplementary amount is exempt;

(b) the balance is not exempt.

"(2) Payments under section 771NW of the Social Security Act 1991 (which

deals with bereavement payments) are exempt.

"(3) If a taxpayer derives a payment under section 771NX of the Social

Security Act 1991:

(a) so much of the sum of that payment and other payments under the Social

Security Act 1991 derived by the taxpayer during the bereavement lump sum

period as does not exceed the tax-free amount calculated using the exempt

bereavement payment calculator AB in section 24ABZD is exempt; and

(b) the balance of the sum is not exempt.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 92

Application

92. The amendments made by this Division apply to payments received under

the Social Security Act 1991 on or after 20 September 1994.

Division 12 - Amendments relating to reasonable benefits limits

Subdivision A - Certain commutation ETPs, pensions and annuities to be

in excess of RBLs

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 93

Object

93. The object of this Subdivision is to provide that, where an ETP, or a

residual pension or residual annuity, resulted from the commutation etc. of a

pension or annuity that was in excess of a person's RBLs, the ETP, residual

pension or residual annuity will be similarly determined to be in excess of

the person's RBLs.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 94

Determination of whether a benefit is in excess of recipient's RBLs

94. Section 140R of the Principal Act is amended:

(a) by omitting from subsection (1) "subsection (4) (which deals with

non-quotation of tax file numbers)" and substituting "this section";

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

(Application of subsection (1) in respect of commutation ETPs)

"(1A) If the ETP:

(a) was made in relation to the person as a result of the commutation or

partial commutation of, or the residual capital value of, a superannuation

pension or annuity; or

(b) arose from the commutation or partial commutation of a superannuation

pension or annuity to which paragraph 140ZC(2)(d) applies;

the determination that the Commissioner must make is that the ETP is in excess

of the person's RBLs to the extent worked out using the formula:

RBL amount X 1 - Rebatable proportion of the

of the ETP superannuation pension or annuity.

(Application of subsection (1) in respect of commutation pensions and

annuities)

"(1B) If the superannuation pension or annuity mentioned in subsection (1)

is a residual pension or residual annuity payable on the commutation or

partial commutation of another superannuation pension or annuity, the

determination that the Commissioner must make is:

(a) that the superannuation pension or annuity is in excess of the person's

RBLs; and

(b) that the rebatable proportion of the superannuation pension or annuity

is the same as the rebatable proportion of the other superannuation pension or

annuity.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 95

Interim determinations

95. Section 140T of the Principal Act is amended:

(a) by omitting from subsection (1) "subsection (2) (which deals with the

non-quotation of tax file numbers)" and substituting "this section";

(b) by inserting after subsection (2A) the following subsections:

(Application of subsection (1) in respect of commutation ETPs)

"(2B) If the ETP:

(a) was made in relation to the person as a result of the commutation or

partial commutation of, or the residual capital value of, a superannuation

pension or annuity; or

(b) arose from the commutation or partial commutation of a superannuation

pension or annuity to which paragraph 140ZC(2)(d) applies;

the determination that the Commissioner must make is that the ETP is in excess

of the person's RBLs to the extent worked out using the formula:

RBL amount X 1-Rebatable proportion of the

of the ETP superannuation pension or annuity

(Application of subsection (1) in respect of commutation pensions and

annuities)

"(2C) If the superannuation pension or annuity mentioned in subsection (1)

is a residual pension or residual annuity payable on the commutation or

partial commutation of another superannuation pension or annuity, the

determination that the Commissioner must make is:

(a) that the superannuation pension or annuity is in excess of the person's

RBLs; and

(b) that the rebatable proportion of the superannuation pension or annuity

is the same as the rebatable proportion of the other superannuation pension or

annuity.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 96

Benefits which are counted towards a person's RBLs

96. Section 140ZC of the Principal Act is amended:

(a) by omitting paragraphs (2)(b) and (c) and substituting the following

paragraphs:

"(b) an ETP made in relation to the person as a result of the commutation

of, or the residual capital value of, a superannuation pension or annuity

where the commencement day for the pension or annuity is before 1 July 1990;

another superannuation pension or annuity where the commencement day for the

other pension or annuity is before 1 July 1990;";

(b) by omitting paragraph (2)(e).

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 97

RBL amount-ETP paid by life assurance company or registered organisation

97. Section 140ZI of the Principal Act is amended by omitting all the words

before paragraph (c) and substituting:

"140ZI. If an ETP in relation to a person is paid by a life assurance

company or a registered organisation, the RBL amount of the ETP is the whole

of the ETP, other than any part of the ETP that consists of:".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 98

Application

98. The amendments made by this Subdivision apply to:

(a) ETPs paid on or after 1 July 1994; and

(b) superannuation pensions and annuities where the commencement day (within

the meaning of section 140C of the Principal Act) is on or after 1 July 1994.

Subdivision B - Tax file number where interim determination

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 99

Object

99. The object of this Subdivision is to remove death benefit ETPs from the

tax file number requirements of the interim determination provision (section

140T of the Principal Act).

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 100

Interim determinations

100. Section 140T of the Principal Act is amended:

(a) by omitting from subsection (2) "If" and substituting "Subject to

subsection (2A), if";

(b) by inserting after subsection (2) the following subsection:

(Exception in case of death benefit ETPs)

"(2A) Subsection (2) does not apply if:

(a) the ETP is made in relation to the recipient as a result of the death of

the recipient; and

(b) the Commissioner is satisfied that the recipient has a tax file

number.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 101

Application

101. The amendments made by this Subdivision apply to ETPs paid on or after

1 July 1994.

Subdivision C - Payer notification obligations

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 102

Object

102. The object of this Subdivision is:

(a) to remove the exemption, for trustees of superannuation funds, from

giving notice under section 140M of the Principal Act in relation to ETPs

equal to or less than $5,000; and

(b) to require the Insurance and Superannuation Commissioner to give notice

under that section in relation to ETPs exceeding $5,000.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 103

Payers of benefits to give certain information to Commissioner

103. Section 140M of the Principal Act is amended by omitting from

sub-subparagraph (1)(a)(i)(B) "or the trustee of a superannuation fund" and

substituting "or the Insurance and Superannuation Commissioner".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 104

Application

104. The amendment made by this Subdivision applies to ETPs paid on or after

1 July 1994.

Subdivision D - Superannuation pensions and annuities not meeting

standards

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 105

Object

105. The object of this Subdivision is to provide for the qualifying

portions of ETPs previously received by a person to be counted in determining

whether a superannuation pension or annuity that does not meet the pension and

annuity standards is to be assessed against the person's lump sum RBL.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 106

Assessment of benefits against lump sum RBL

106. Section 140ZF of the Principal Act is amended by inserting after

paragraph (3)(b) the following word and paragraph:

"and (ba) the qualifying portions of any ETPs previously received by the

person;".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 107

Application

107. The amendment made by this Subdivision applies in relation to

superannuation pensions and annuities where the commencement day (within the

meaning of section 140C of the Principal Act) is on or after 1 July 1994.

Subdivision E - Alleviation of notice requirements

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 108

Alleviation of notice requirements

108. If, apart from this section, a payer would, only because of the

application of the amendments made by this Division, be required under section

140M of the Principal Act as amended by this Act to have given a notice before

the commencement of this Division, that notice is not required to be given

until the end of the 28th day after the day on which this Division commences.

Division 13 - Amendments relating to regional headquarters

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 109

Object

109. The object of this Division is to provide a deduction for certain

expenditure incurred by approved companies in establishing a regional

headquarters in Australia.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 110

Insertion of new Subdivision

110. After Subdivision CA of Division 3 of Part III of the Principal Act the

following Subdivision is inserted:

"Subdivision CB-Regional Headquarters (RHQs)

Object

"82C. The object of this Subdivision is to provide a deduction for certain

expenditure incurred by approved companies in establishing a regional

headquarters in Australia.

Deduction for setup costs of RHQ companies

"82CA. RHQ setup costs incurred on or after 1 July 1994 by an RHQ company in

a year of income are an allowable deduction from the assessable income of the

RHQ company of the year of income.

Interpretation

"82CB.(1) In this Subdivision:

'associated company' has the meaning given by section 82CC;

'management related services' include the following:

(a) finance and treasury services;

(b) business planning services;

(d) accounting services;

(e) research and development services;

'RHQ company' means a company that the Treasurer, under section 82CE, has

determined to be an RHQ company;

'RHQ setup costs' means expenditure (whether or not of a capital nature)

incurred by an RHQ company:

(a) both:

(i) in setting up the facilities referred to in subsection

82CD(1); and

(ii) in the period starting 12 months before, and ending 12 months

after, the company first derives assessable income from the provision of

regional headquarters support from those facilities; or

(b) in reimbursing expenditure incurred by a non-resident associated company

of the RHQ company if the latter expenditure would have been covered by

paragraph (a) if it had instead been incurred by the RHQ company at the time

when it was incurred by the associated company;

but does not include:

setting up of facilities in Australia to provide regional headquarters

support; or

(d) costs incurred in connection with moving facilities that provide

regional headquarters support from one location in Australia to another

location in Australia; or

(e) the cost of plant, equipment, land, buildings or similar items.

"(2) A company 'provides regional headquarters support' if:

(a) the company provides to an associated company that is located in a

country other than Australia; or

(b) a part of the company provides to another part of the company that is

located in a country other than Australia;

any of the following:

(d) data services; or

(e) software support services.

"(3) A reference in this section to the provision of data services to a

company, or a part of a company, is a reference to:

(a) the substantial input, transmission or manipulation of data; or

(b) the production of information from data;

for, or on behalf of, that company or that part of that company.

"(4) A reference in this section to the provision of software support

services to a company, or a part of a company, is a reference to the

provision, to clients of that company or that part of that company, of advice

and assistance in relation to computer software sold by that company or that

part of that company.

Associated companies

"82CC. For the purposes of this Subdivision, a company is an 'associated

company' of another company if:

(a) either company controls at least 10% of the votes in the other company

(either directly or through one or more interposed companies, partnerships or

trust estates); or

(b) a third company is an associated company (including by one or more

applications of this paragraph) of both of the companies.

Application to become an RHQ company

"82CD.(1) A company may, in writing, apply to the Treasurer to become an RHQ

company if the company intends to establish facilities in Australia mainly for

the purpose of providing regional headquarters support.

"(2) The Treasurer must publish the address to which applications must be

sent.

Determination of RHQ companies

"82CE.(1) Subject to subsection (3), the Treasurer may, on application by a

company under section 82CD, make a written determination that the company is

an RHQ company for the purposes of this Subdivision.

"(2) The determination must:

(a) specify the day when the company commences to be an RHQ company; and

(b) contain any other information the Treasurer considers appropriate.

"(3) A determination of the Treasurer under subsection (1):

(a) may only be made if the Treasurer is satisfied that the company has the

intention mentioned in subsection 82CD(1); and

(b) must be made in accordance with guidelines determined by the Treasurer

under this section.

"(4) The Treasurer must determine written guidelines for the making of

determinations under subsection (1). The guidelines may require the Treasurer

to take into account:

(a) specified criteria; or

(b) recommendations of particular bodies; or

"(5) Determinations made under this section are disallowable instruments for

the purposes of section 46A of the Acts Interpretation Act 1901.".

Division 14 - Australian branches of foreign banks

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 111

Object

111. The object of this Division is to enact new provisions relating to the

taxation of foreign banks in respect of income derived through permanent

establishments in Australia.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 112

Repeal of section

112. Section 128M of the Principal Act is repealed.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 113

Insertion of new Part

113. After Part IIIA of the Principal Act the following Part is inserted:

"PART IIIB-AUSTRALIAN BRANCHES OF FOREIGN BANKS

"Division 1-Preliminary

Object

"160ZZVA.(1) The object of this Part is:

(a) to assist in calculating that part of a foreign bank's taxable income

that is referable to certain activities of its Australian branch; and

(b) to make it clear that withholding tax will apply to amounts that are

taken by this Part to be interest paid by the branch to the bank.

"(2) For the purpose of achieving the object mentioned in subsection (1),

this Part requires, in the circumstances stated in this Part and not

otherwise, that the Australian branch is to be treated as if it were a

separate legal entity from the bank.

Application

"160ZZVB.(1) It is the intention that, in so far as this Part is to be

applied to identify amounts of income and expenditure that are taken into

account in calculating that part of a foreign bank's taxable income of a year

of income that is referable to certain activities of its Australian branch,

the provisions of this Part are to be applied in their entirety.

"(2) If, as a result of the application of this Part:

(a) the taxable income of a year of income of a foreign bank that is

attributable to activities carried on by the bank through its Australian

branch is greater than the amount that would be that taxable income if this

Part did not apply; or

(b) a foreign bank would be taken not to incur a loss in a year of income in

respect of activities carried on by the bank through its Australian branch

that it would be taken to have incurred if this Part did not apply; or

year of income in respect of activities carried on by the bank through its

Australian branch is less than the amount of the loss that it would be taken

to have incurred if this Part did not apply;

and an agreement within the meaning of the Income Tax (International

Agreements) Act 1953 that has the force of law applies in relation to the

bank, the bank may elect that this Part is not to apply in the calculation of

its taxable income of that year of income.

"(3) If a foreign bank makes an election as mentioned in subsection (2):

(a) this Part does not apply in the calculation of the bank's taxable income

of the year of income to which the election relates and the bank may furnish

returns, and is liable to pay tax, accordingly; but

(b) the election does not affect the operation of this Part in respect of

the application of withholding tax to amounts that are taken by this Part to

be interest paid by the branch to the bank.

Definitions

"160ZZV. In this Part, unless the contrary intention appears:

'accounting records' includes:

(a) invoices, receipts, vouchers and other documents of prime entry; and

(b) any working papers and other documents that are necessary to explain the

methods and calculations by which accounts are made up;

'Australian branch', in relation to a foreign bank, means a permanent

establishment in Australia through which the bank carries on banking

business;

'derivative transaction' means a transaction entered into for the purpose of

eliminating, reducing or altering the risk of adverse financial consequences

that might result from changes in rates of interest or changes in rates of

exchange between currencies, or for the purpose of making a profit from such

changes, but does not include a transaction for the provision of finance or a

foreign exchange transaction;

'foreign bank' means a foreign bank as defined by subsection 5(1) of the

Banking Act 1959;

'foreign exchange transaction' means a transaction by which different

currencies are exchanged;

'offshore banking unit' has the same meaning as in Division 11A of Part

III;

'time of establishment', in relation to an Australian branch of a foreign

bank, means the time when the bank began to carry on business through the

permanent establishment in Australia that constitutes the branch.

Certain provisions to apply as if Australian branch of foreign bank were a

separate legal entity

"160ZZW.(1) Subsections (2), (3), (4) and (5) apply only:

(a) for the purposes of sections 160ZZZ, 160ZZZA, 160ZZZB, 160ZZZC, 160ZZZE

and 160ZZZF as they have effect in the determination under this Act of the

liability of a foreign bank to tax (other than withholding tax) in respect of

income derived from an Australian branch of the bank; and

(b) for the purposes of the provisions of this Act other than this Part as

those provisions apply in relation to amounts that are taken by this Part to

have been received from a foreign bank by its Australian branch or to have

been paid to a foreign bank by its Australian branch; and

liability of a foreign bank to withholding tax in respect of amounts paid to

the bank by an Australian branch of the bank.

"(2) The branch and the bank are taken to be, and to have been since the

time of establishment of the branch, separate legal entities.

"(3) The branch is taken to be, and to have been since the time of its

establishment, a company having a share capital all the shares in which are or

were beneficially owned by the bank.

"(4) The branch is taken to be a non-resident and to have been a

non-resident since the time of its establishment.

"(5) For the purposes of Division 13 of Part III, the branch is taken not to

be, and not to have been at any time since its establishment, a permanent

establishment in Australia of the bank.

"Division 2-Provisions relating to income tax

Income of branch to have Australian source

"160ZZX. All income derived by a foreign bank through its Australian branch

is taken, for the purposes of this Act, to be income derived from a source in

Australia.

Deduction for foreign tax

"160ZZY. Foreign tax paid during a year of income by a foreign bank on

interest received by its Australian branch from a place outside Australia is

an allowable deduction for that year of income.

Notional borrowing by branch from bank

"160ZZZ.(1) If an amount has been made available by a foreign bank for use

by an Australian branch of the bank and is recorded in the branch's accounting

records as having been provided by the bank to the branch, that amount is

taken, for the purposes of this Act, to have been borrowed by the branch from

the bank when the amount became so available and to have been so borrowed in

the currency in which the amount became so available.

"(2) If an amount has been made available by the branch to the bank in

purported repayment of an amount that is taken, under subsection (1), to have

been borrowed by the branch from the bank and the amount so made available is

recorded in the branch's accounting records as having been repaid by the

branch to the bank, the amount that was so taken to have been borrowed is

taken, for the purposes of this Act, to have been repaid by the branch to the

bank when the amount became so available and to have been so repaid in the

currency in which the amount became so available.

Notional payment of interest by branch to bank

"160ZZZA.(1) If, under section 160ZZZ, an amount is taken, for the purposes

of this Act, to have been borrowed (the 'notional borrowing') in a particular

currency from a foreign bank by an Australian branch of the bank, the

following provisions have effect:

(a) at any time (the 'relevant time') when, in respect of the notional

borrowing, an amount (the 'notional amount of interest') is entered in the

branch's accounting records as interest for a period fixed by the bank,

interest is taken, for the purposes of this Act, to be incurred by the branch,

paid by the branch to the bank, and derived by the bank, in respect of the

notional borrowing;

(b) subject to the application of paragraph (c), the notional amount of

interest is taken, for the purposes of this Act, to be the amount of interest

so taken to be paid;

calculated at a rate of interest that exceeded the LIBOR that was applicable

at the beginning of the relevant interest calculation period in relation to

the notional borrowing, there is taken to have been entered in the branch's

accounting records at the relevant time, in lieu of the notional amount of

interest, the amount that would have been so entered if interest on the

notional borrowing for the relevant interest calculation period had been

calculated at the LIBOR that was applicable at the beginning of that period.

"(2) For the purposes of this section, a reference to the LIBOR that was

applicable at the beginning of the relevant interest calculation period in

relation to the notional borrowing is a reference to:

(a) the LIBOR applicable at the beginning of that period in respect of

advances in the currency of that borrowing for a term the number of days in

which was equal to the number of days in that period; or

(b) if there was no LIBOR applicable at the beginning of that period in

respect of advances in the currency of that borrowing for such a term:

(i) the LIBOR applicable at the beginning of that period in

respect of advances in that currency for a term the number of days in which

most nearly approximated the number of days in that period; or

(ii) if there were different LIBORs so applicable for different

terms the number of days in each of which could be described as having most

nearly approximated the number of days in that period-the LIBOR so applicable

for the shorter of those terms.

"(3) For the purposes of this section:

(a) a reference to LIBOR, in relation to a particular time, is a reference

to the rate of interest applicable at that time in relation to banks in the

London inter bank market as determined by reference to the Reuter Monitor

Money Rates Service or any other published source; and

(b) a reference to the relevant interest calculation period in relation to a

notional borrowing from a foreign bank by an Australian branch of the bank is

a reference to the period fixed by the bank for the calculation of the

notional amount of interest in respect of the notional borrowing.

Deductions in respect of interest

"160ZZZB.(1) If, apart from this section, an amount would be allowable as a

deduction other than an allowable OB deduction (within the meaning of

Subdivision B of Division 9A of Part III) under subsection 51(1) from the

assessable income of an Australian branch of a foreign bank in respect of

interest incurred by the branch in respect of money borrowed by the branch,

the amount that is allowable as a deduction under that subsection from that

assessable income in respect of that interest is the first-mentioned amount

reduced by the notional equity requirement.

"(2) In subsection (1):

'notional equity requirement' means 4% of the amount first mentioned in that

subsection.

Offshore banking units

"160ZZZC. If:

(a) apart from this section, a foreign bank would be an offshore banking

unit under a declaration published under subsection 128AE(2); and

(b) the foreign bank has an Australian branch;

this Act has effect as if the Australian branch were the offshore banking unit

under the declaration.

Thin capitalisation

"160ZZZD. A foreign bank that carries on banking business in Australia

through an Australian branch is not taken to be a foreign investor for the

purposes of Division 16F of Part III in respect of income derived by the bank

through that branch.

Notional derivative transactions between branch and bank

"160ZZZE. If the accounting records of an Australian branch of a foreign

bank reflect a derivative transaction notionally entered into by the branch

with the bank:

(a) the notional transaction is taken to be a transaction entered into by

the branch with the bank; and

(b) any amount entered in the branch's accounting records as a payment or

receipt in respect of the notional transaction is taken, for the purposes of

this Act, to be an amount paid or received by the branch, as the case may be,

in respect of the derivative transaction when the amount was so entered.

Notional foreign exchange transactions between branch and bank

"160ZZZF. If the accounting records of an Australian branch of a foreign

bank reflect a foreign exchange transaction notionally entered into by the

branch with the bank:

(a) the notional transaction is taken to be a transaction entered into by

the branch with the bank; and

(b) any amount entered in the branch's accounting records as a payment or

receipt in respect of the notional transaction is taken, for the purposes of

this Act, to be an amount paid or received by the branch, as the case may be,

in respect of the foreign exchange transaction when the amount was so entered.

Losses

"160ZZZG. Section 80G has effect as if an Australian branch of a foreign

bank were a subsidiary of the bank and a resident of Australia.

Capital losses

"160ZZZH. Section 160ZP has effect as if an Australian branch of a foreign

bank were a subsidiary of the bank and a resident of Australia.

Certain transactions to be disregarded

"160ZZZI. Any transaction entered into by a foreign bank otherwise than

through its Australian branch:

(a) under which finance is provided to the bank; or

(b) that is a derivative transaction or a foreign exchange transaction;

is to be disregarded for the purpose of determining whether a deduction is

allowable to the bank under this Act.

"Division 3-Provisions relating to withholding tax

Withholding tax on interest paid by branch to bank

"160ZZZJ.(1) If:

(a) an amount of interest is taken under section 160ZZZA to be paid to, and

derived by, a foreign bank by an Australian branch of the bank; and

(b) apart from this section, sections 128B and 221YL would apply to an

amount (the 'taxable amount') that comprises the whole or a part of the amount

so taken to be paid;

the following subsections have effect.

"(2) Sections 128B and 221YL apply only to the amount worked out using the

formula:

Taxable amount less notional equity requirement

where:

'notional equity requirement' means 4% of the taxable amount.

"(3) An amount to which section 128B applies because of subsection (2) of

this section is taken, for the purposes of section 128C, to be income that was

derived by the bank when the amount of interest referred to in paragraph

(1)(a) is taken to have been paid to the bank.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 114

Keeping of records

114. Section 262A of the Principal Act is amended by inserting after

subsection (1A) the following subsection:

"(1B) Without limiting subsection (1), a foreign bank (within the meaning of

subsection 5(1) of the Banking Act 1959) must maintain accounting records in

respect of, and separately account for, money used in the activities of a

permanent establishment in Australia through which the bank carries on banking

business.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 115

Application

115.(1) The repeal of section 128M of the Principal Act effected by section

113 is taken to have had effect on and after 18 June 1993.

(2) Sections 160ZZX to 160ZZZF (inclusive) and section 160ZZZI inserted in

the Principal Act by this Division apply to assessments in respect of income

of the first year of income commencing after 30 June 1994 and in respect of

income of all later years of income.

(3) Sections 160ZZZG and 160ZZZH inserted in the Principal Act by this

Division apply to assessments in respect of income of the first year of income

following the year of income in which the Financial Corporations (Transfer of

Assets and Liabilities) Act 1993 commenced and in respect of income of all

later years of income.

(4) Section 160ZZZJ inserted in the Principal Act by this Division applies

in respect of amounts of interest that are taken to be paid to a foreign bank

by an Australian branch of the bank at any time after the start of the first

year of income commencing after 30 June 1994.

PART 3 - AMENDMENT OF THE INCOME TAX (MINING WITHHOLDING TAX) ACT 1979

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 117

Principal Act

117. In this Part, "Principal Act" means the Income Tax (Mining Withholding

Tax) Act 1979*2*.

Income Tax (Mining Withholding Tax) Act 1979

*2* No. 28, 1979, as amended. For previous amendments, see No. 103, 1982 and

No. 109, 1986.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 118

Rate of tax

118. Section 6 of the Principal Act is amended by omitting "5.8%" and

substituting "4%".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 119

Application

119. The amendment made by this Part applies to mining payments made or

applied on or after 30 June 1994.

PART 4 - AMENDMENT OF THE SALES TAX LAW

Division 1 - Amendments relating to child care

Subdivision A - Object

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 120

Object

120. The objects of this Division are:

(a) to limit the value of the exemption on the purchase or lease of luxury

motor vehicles for use in providing child care; and

(b) to allow a credit to particular exempt child care bodies for certain tax

borne before the bodies became exempt child care bodies.

Subdivision B - Amendment of the Sales Tax Assessment Act 1992

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 121

Principal Act

121. In this Subdivision, "Principal Act" means the Sales Tax Assessment Act

1992*3*.

Sales Tax Assessment Act 1992

*3* No. 114, 1992, as amended. For previous amendments, see Nos. 150, 191, 210

and 224, 1992; Nos. 18, 44 and 118, 1993.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 122

Luxury motor vehicle for disabled person or exempt child care body

122. Section 49 of the Principal Act is amended by omitting from subsection

(1) "or 97" and substituting ", 97 or 144A".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 123

Schedule 1

123. Schedule 1 to the Principal Act is amended by inserting after credit

ground CR20 in Table 3 the following credit ground:

"CR20A

Tax borne before claimant became an exempt child care body ('an

ECCB')

Claimant became an ECCB under subsection 3B(1) of the Exemptions

and Classifications Act within 3 months after it first began to

provide any kind of child care referred to in paragraph 3B(1)(a)

of that Act.

Claimant has borne tax on a tax-bearing dealing:

(a) after 23 December 1993; and

(b) not more than 12 months before it became an ECCB.

The claimant was not entitled to quote for the dealing, but would

have been if it had been an ECCB at the time of the dealing.

the tax borne

the time the claimant became an ECCB".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 124

Application

124. The amendment made by section 122 applies to dealings with goods after

the commencement of that section.

Subdivision C - Amendment of the Sales Tax (Exemptions and

Classifications) Act 1992

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 125

Principal Act

125. In this Subdivision, "Principal Act" means the Sales Tax (Exemptions

and Classifications) Act 1992*4*.

Sales Tax (Exemptions and Classifications) Act 1992

*4* No. 119, 1992, as amended. For previous amendments, see Nos. 131, 150, 167

and 224, 1992; and No. 118, 1993.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 126

Schedule 1

126. Schedule 1 to the Principal Act is amended by adding at the end of Item

144A the following subitem:

"(2) Subitem (1) does not apply to motor cars or station wagons (including

those known as four-wheel drive vehicles), if the taxable value of the taxable

dealing concerned is more than 67.1% of the motor vehicle depreciation limit

for the financial year in which the taxable dealing happens, unless the motor

vehicle:

(a) is specially fitted out for transporting disabled persons seated in

wheel chairs; and

(b) is not described in subitem (1) of exemption Item 96 or 97.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 127

Application

127. The amendments made by this Subdivision apply to dealings with goods

after the commencement of this section.

Division 2 - Amendments to provide a credit for export alteration goods

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 128

Object

128. The amendments made by this Division provide for sales tax credits for

certain goods used in the alteration of goods that are exported.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 129

Principal Act

129. In this Division, "Principal Act" means the Sales Tax Assessment Act

1992*3*.

Sales Tax Assessment Act 1992

*3* No. 114, 1992, as amended. For previous amendments, see Nos. 150, 191, 210

and 224, 1992; Nos. 18, 44 and 118, 1993.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 130

General definitions

130. Section 5 of the Principal Act is amended:

(a) by inserting ", 9A" after "sections 9" in the definition of

"Australian-used goods";

(b) by inserting the following definition:

" 'export alteration goods' has the meaning given by section 15D;".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 131

Insertion of new section

131. After section 9 of the Principal Act the following section is

inserted:

Export alteration goods: affects meaning of "Australian-used goods"

"9A.(1) This section applies to Australian-used goods if:

(a) the export of the goods gave rise to a CR23 credit in relation to the

goods or goods that became an integral part of the goods; and

(b) the goods are later imported.

"(2) In applying the sales tax law at or after the time of the importation,

the goods are not taken to be Australian-used goods only because of an AOU of

the goods that happened before they were exported as mentioned in paragraph

(1)(a).".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 132

Insertion of new section

132. After section 15C of the Principal Act the following section is

inserted in Part 2:

Export alteration goods

"15D.(1) Goods are export alteration goods if:

(a) the goods are parts, fittings or accessories that are used by a person

('the claimant') exclusively in the alteration of other goods ('the altered

goods'); and

(b) as a result of that use, the goods become an integral part of the

altered goods; and

(i) the altered goods are exported by another person and that

person gives the claimant a declaration under subsection (2); or

(ii) the altered goods are exported by the claimant; and

(d) the goods were not used (other than in a manner covered by paragraphs

(a) and (b)) in the period commencing at the end of the alteration and

ending at the start of the export of the goods.

"(2) The declaration referred to in paragraph (1)(c) is a declaration that

either:

(a) the altered goods; or

(b) if the claimant has used the altered goods as parts, fittings or

accessories exclusively in the alteration of other goods-those other goods;

were exported by the person making the declaration and were not used (other

than in a manner covered by paragraphs (1)(a) and (b)) in the period

commencing at the end of the alteration and ending at the start of the export

of the goods. The declaration must be in writing in a form approved by the

Commissioner and must be signed by the person making the declaration.

"(3) The time when the goods become export alteration goods is the time when

the claimant exports the goods, or is given the declaration, as the case

requires.

"(4) In this section:

'alteration' includes repair, renovation or upgrading.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 133

Taxable dealing with goods imported after being exported for alteration

133. Section 42 of the Principal Act is amended by omitting from subsection

(1) "This" and substituting "Subject to section 42AA, this".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 134

Insertion of new section

134. After section 42 of the Principal Act the following section is

inserted:

Export alteration goods that are re-imported

"42AA.(1) This section applies to any taxable dealing with goods to which

section 9A applies.

"(2) If the taxable dealing is covered by section 42, the taxable value is

the amount calculated under that section plus the amount that would have been

the taxable value if the dealing had only involved the export alteration

goods.

"(3) If the taxable dealing is not covered by section 42, the taxable value

is the amount that would have been the taxable value if the dealing had only

involved the export alteration goods.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 135

Schedule 1

135. Schedule 1 to the Principal Act is amended by adding at the end of

Table 3 the following credit ground:

"CR23

Tax on export alteration goods

Claimant has borne tax on export alteration goods.

the tax borne on the goods to the extent that the claimant

has not passed it on

when the goods became export alteration goods".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 136

Application

136.(1) The amendments made by sections 130, 132 and 135 apply to goods

where the alteration of the goods occurred, or occurs, on or after 1 January

1993.

(2) The amendments made by sections 131, 133 and 134 apply in relation to

goods that are imported (after being exported) on or after the commencement of

this Division.

Division 3 - Reduction of clawback of CR9 credit

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 137

Object

137. The object of this Division is to reduce the amount of the clawback of

CR9 credits to avoid double tax on parts used to repair the goods.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 138

Principal Act

138. In this Division, "Principal Act" means the Sales Tax Assessment Act

1992*3*.

Sales Tax Assessment Act 1992

*3* No. 114, 1992, as amended. For previous amendments, see Nos. 150, 191, 210

and 224, 1992; Nos. 18, 44 and 118, 1993.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 139

Clawback of CR9 credit on later sale of defective goods

139. Section 58 of the Principal Act is amended:

(a) by omitting from subsection (2) "The amount" and substituting "Subject

to subsection (2A), the amount";

(b) by inserting after subsection (2) the following subsection:

"(2A) If the claimant has borne tax on goods that were used as raw materials

in repairing the defective goods, the amount payable by the claimant is the

amount calculated using the formula in subsection (2) reduced by the amount of

the tax borne.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 140

Application

140. The amendments made by section 139 apply to amounts payable under

section 58 of the Principal Act in relation to liabilities arising from sales

of defective goods occurring after the commencement of this Division.

Division 4 - Amendments to extend the periodic quoting provisions

of the Sales Tax Assessment Act 1992

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 141

Object

141. The object of this Division is to extend the periodic quoting

provisions of the Sales Tax Assessment Act 1992:

(a) to extend the period for which quotes may be made from 1 month to 1

year; and

(b) to allow unregistered persons to make periodic quotes based on an

exemption Item; and

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 142

Principal Act

142. In this Division, "Principal Act" means the Sales Tax Assessment Act

1992*3*.

Sales Tax Assessment Act 1992

*3* No. 114, 1992, as amended. For previous amendments, see Nos. 150, 191, 210

and 224, 1992; Nos. 18, 44 and 118, 1993.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 143

Periodic quoting

143. Section 85 of the Principal Act is amended:

(a) by omitting subsections (1) and (2) and substituting the following

subsections:

"(1) A person ('the quoter') may make a periodic quote under this section

for purchases that the quoter proposes to make from a person ('the supplier')

during the period, not exceeding 12 months, covered by the periodic quote.

"(2) If the quoter is a registered person and makes such a periodic quote on

or before the first day of the period to which the quote relates, the quoter

is taken to have quoted a registration number for all purchases during the

period from the supplier, other than purchases in respect of which the quoter

has notified the supplier in accordance with subsection (3).

"(2A) If the quoter is an unregistered person and makes such a periodic

quote on or before the first day of the period to which the quote relates, the

quoter is taken to have quoted an exemption declaration for all purchases

during the period from the supplier, other than purchases in respect of which

the quoter has notified the supplier in accordance with subsection (3).";

(b) by omitting from subsection (3) "month" and substituting "period";

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 144

Manner in which quote must be made

144. Section 86 of the Principal Act is amended by omitting from subsection

(1) "monthly" and substituting "periodic".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 145

Savings

145.(1) A monthly quote made under section 85 of the Principal Act is taken

to be a periodic quote under section 85 of the amended Act that covers the

month concerned.

(2) In this section, "amended Act" means the Principal Act as amended by

this Act.

Division 5 - Amendments to extend the post-trial sale and lease

provisions

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 146

Object

146. The amendments made by this Division extend the provisions in relation

to post-trial sales and post-trial leases.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 147

Principal Act

147. In this Division, "Principal Act" means the Sales Tax Assessment Act

1992*3*.

Sales Tax Assessment Act 1992

*3* No. 114, 1992, as amended. For previous amendments, see Nos. 150, 191, 210

and 224, 1992; Nos. 18, 44 and 118, 1993.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 148

Repeal of section and substitution of new section

148. Section 15B of the Principal Act is repealed and the following section

is substituted:

Post-trial sale or post-trial lease

"15B.(1) A sale by a person ('the claimant') is a post-trial sale and a

lease by a person (also 'the claimant') is a post-trial lease if:

(a) the sale or lease occurs after one or more exempt trial-leases or exempt

trial-loans in relation to the goods; and

(b) in the case of a lease-the lease is for the remainder of the statutory

period; and

gives evidence to the claimant, in a form approved by the Commissioner, of the

purchaser's or lessee's intended use of the goods during the remainder of the

statutory period so as to satisfy an exemption Item; and

(d) immediately before the first exempt trial-lease or exempt trial-loan the

goods were assessable goods; and

(e) in the period starting at the end of the exempt trial-lease or exempt

trial-loan referred to in paragraph (d) and ending at the time of the sale or

lease:

(i) the goods were not sold by the claimant; and

(ii) any AOU of the goods was an exempt trial-lease or an exempt

trial-loan.

"(2) In this section:

'exempt trial-lease' means a lease of goods where, before the end of the

lease, the person to whom the goods are leased gives evidence to the lessor,

in a form approved by the Commissioner, that the lessee used, or intended to

use, the goods during the lease so as to satisfy an exemption Item;

'exempt trial-loan' means a loan of goods where, before the end of the loan,

the person to whom the goods are lent gives evidence to the lender, in a form

approved by the Commissioner, that the person used, or intended to use, the

goods during the loan so as to satisfy an exemption Item.

"(3) A reference in subsection (1) or (2) to a loan includes a reference to

a demonstration, and, in relation to a demonstration, a reference in that

subsection to use of goods by a person includes use by another person

demonstrating the goods to the person.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 149

Application

149. The amendments made by this Division apply to sales or leases where the

first, or only, exempt trial-lease or exempt trial-loan occurs after the

commencement of this Division.

Division 6 - Amendments relating to regional headquarters

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 150

Principal Act

150. In this Division, "Principal Act" means the Sales Tax (Exemptions and

Classifications) Act 1992*4*.

Sales Tax (Exemptions and Classifications) Act 1992

*4* No. 119, 1992, as amended. For previous amendments, see Nos. 131, 150, 167

and 224, 1992; and No. 118, 1993.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 151

Object

151. The object of this Division is to provide a sales tax exemption or

credit for imported computer equipment for use by an RHQ company.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 152

Schedule 1

152. Schedule 1 to the Principal Act is amended:

(a) by inserting after Item 38 of the Table of Contents the following Item

in Sub-Chapter 1.5 of Chapter 1:

"38A. Computer related equipment for RHQ company";

(b) by inserting after Item 38 the following Item in Sub-Chapter 1.5 of

Chapter 1:

"Item 38A: (Computer related equipment for RHQ company) (1) Imported goods,

being computer related equipment for use by an RHQ company mainly in providing

regional headquarters support, if:

(a) at all times during the 9 months before the local entry, the goods:

(i) were in existence; and

(ii) were owned or leased by:

(A) the RHQ company; or

(B) a company ('the RHQ group company') that, at the time of the

local entry, was a group company in relation to the RHQ company; or

group company; and

(iii) were not leased or subleased to a person who is not covered

by subparagraph (ii); and

(b) the goods are locally entered within 2 years after the day on which the

first goods covered by this Item that are for use by the RHQ company are

locally entered.

(2) In this Item:

'computer equipment' includes:

(a) equipment for networking computers; or

(b) equipment mainly used in communications between computers; or

'computer related equipment' means:

(a) computer equipment; or

(b) equipment mainly used for producing, supplying, monitoring or regulating

power for computer equipment; or

equipment covered by paragraph (a) or (b) is situated;

'provide regional headquarters support' has the same meaning as in

Subdivision CB of Division 3 of Part III of the Income Tax Assessment Act

1936;

'RHQ company' means:

(a) an RHQ company within the meaning of Subdivision CB of Division 3 of

Part III of the Income Tax Assessment Act 1936; or

(b) a transitional RHQ company within the meaning of subsection 154(4) of

the Taxation Laws Amendment Act (No. 3) 1994.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 153

Application

153. The amendments made by this Division apply to dealings with goods after

the commencement of this Division.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 154

Transitional

154.(1) The Sales Tax Assessment Act 1992 applies in relation to a

transitional RHQ company dealing as if the following credit ground were added

at the end of Table 3 in Schedule 1 to that Act:

"CR24

Transitional credit for a transitional RHQ company dealing

Claimant has borne tax on a transitional RHQ company dealing

within the meaning of subsection 154(3) of the Taxation Laws

Amendment Act (No. 3) 1994.

the tax borne, to the extent that the claimant has not passed

it on

at the commencement of section 154 of the Taxation Laws

Amendment Act (No. 3) 1994".

(2) If a taxpayer is entitled to a credit for a transitional RHQ company

dealing, the reference in paragraph (1)(b) of exemption Item 38A of the

Principal Act as amended by this Division to the day on which the first goods

covered by that Item are locally entered for use by the RHQ company concerned

is a reference to the day on which the first goods that are the subject of a

transitional RHQ company dealing are locally entered for use by that

transitional RHQ company.

(3) A dealing with imported goods is a "transitional RHQ company dealing"

if:

(a) the goods are computer related equipment for use by a transitional RHQ

company mainly in providing regional headquarters support; and

(b) at all times during the 9 months before the local entry, the goods:

(i) were in existence; and

(ii) were owned or leased by:

(A) the transitional RHQ company; or

(B) a company ("the RHQ group company") that, at the time of the

local entry, was a group company in relation to the transitional RHQ company;

group company; and

(iii) were not leased or subleased to a person who is not covered

by subparagraph (ii); and

this section.

(4) The Treasurer may determine that a pre-approved company, or a group

company in relation to a pre-approved company, is a "transitional RHQ

company".

(5) The determination must:

(a) specify the day on which the company commences to be a transitional RHQ

company; and

(b) contain any other information as the Treasurer considers appropriate.

(6) A company is a "pre-approved company" if:

(a) before 15 December 1993, the Treasurer, or another Minister, agreed in

writing to provide the company with:

(i) a sales tax exemption for equipment; or

(ii) compensation for sales tax paid on equipment;

where the equipment was imported into Australia and was owned by the company

for at least 9 months before importation; or

(b) on or after 15 December 1993, and before the commencement of this

section, the Treasurer agreed in writing to give the company conditional

approval as an RHQ company.

(7) Determinations made under subsection (4) are disallowable instruments

for the purposes of section 46A of the Acts Interpretation Act 1901.

(8) In this section, "computer related equipment", "provide regional

headquarters support" and "RHQ company" have the same meaning as in exemption

Item 38A of the Principal Act as amended by this Division.

(9) In this section:

"group company" has the same meaning as in the Principal Act as amended by

this Division.

Division 7 - Amendments relating to eligible repair goods

Subdivision A - Amendment of the Sales Tax Assessment Act 1992

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 155

Principal Act

155. In this Subdivision, "Principal Act" means the Sales Tax Assessment Act

1992*3*.

Sales Tax Assessment Act 1992

*3* No. 114, 1992, as amended. For previous amendments, see Nos. 150, 191, 210

and 224, 1992; Nos. 18, 44 and 118, 1993.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 156

General definitions

156. Section 5 of the Principal Act is amended by inserting the following

definition:

" 'always-exempt person' means a person whose use of goods of whatever kind

is always covered by an exemption Item, regardless of the way in which the

goods are used by the person;".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 157

Eligible repair goods

157. Section 15C of the Principal Act is amended:

(a) by omitting paragraph (1)(d) and substituting the following paragraph:

"(d) the exemption user gives the claimant:

(i) a declaration that the exemption user is an always-exempt

person; or

(ii) a declaration under subsection (2).";

(b) by omitting from subsection (2) "paragraph (1)(d)" and substituting

"subparagraph (1)(d)(ii)";

(d) by inserting after subsection (2) the following subsection:

"(2A) A declaration under subparagraph (1)(d)(i) or subsection (2) must be

in writing in a form approved by the Commissioner and signed by the exemption

user.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 158

Schedule 1

158. Schedule 1 to the Principal Act is amended by omitting column (4) of

Table 3 in relation to credit ground CR22 and substituting:

"(a) if the exemption user mentioned in section 15C is an always-exempt

person-the tax borne on the goods to the extent that the claimant has not

passed it on; or

(b) in any other case-the tax borne on the goods.".

Subdivision B - Amendment of the Sales Tax

(Exemptions and Classifications) Act 1992

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 159

Principal Act

159. In this Subdivision, "Principal Act" means the Sales Tax (Exemptions

and Classifications) Act 1992*4*.

Sales Tax (Exemptions and Classifications) Act 1992

*4* No. 119, 1992, as amended. For previous amendments, see Nos. 131, 150, 167

and 224, 1992; and No. 118, 1993.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 160

Interpretation

160. Section 3 of the Principal Act is amended by omitting from subsection

(2) the definition of "always-exempt person".

Subdivision C - Application

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 161

Application

161. The amendments made by this Division apply to goods where the repair,

renovation or reconditioning of the goods mentioned in subsection 15C(1) of

the Sales Tax Assessment Act 1992 as amended by this Division occurs on or

after the day on which this Division commences.

Division 8 - Other amendments of the Sales Tax

(Exemptions and Classifications) Act 1992

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 162

Principal Act

162. In this Division, "Principal Act" means the Sales Tax (Exemptions and

Classifications) Act 1992*4*.

Sales Tax (Exemptions and Classifications) Act 1992

*4* No. 119, 1992, as amended. For previous amendments, see Nos. 131, 150, 167

and 224, 1992; and No. 118, 1993.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 163

Schedule 1

163. Schedule 1 to the Principal Act is amended:

(a) by inserting in subitem 27(3) "or delivering" after "marketing";

(b) by omitting from subitem 169(2) "conduct the service" and substituting

"operate the wireless transceiver".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 164

Application

164.(1) The amendment made by paragraph 163(a) applies to dealings with

goods after the commencement of that paragraph.

(2) The amendment made by paragraph 163(b) applies to dealings with goods

after the commencement of that paragraph.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 165

Transitional

165. The Sales Tax Assessment Act 1992 applies in relation to dealings with

goods after 30 June 1993 and before the commencement of this section as if the

following credit ground were added at the end of Table 3 in Schedule 1 to that

Act:

"CR25

Transitional credit item for amended exemption Item 169

Claimant has borne tax on a tax-bearing dealing with goods.

The claimant was not entitled to quote for the dealing, but

would have been if exemption Item 169 as amended by the Taxation

Laws Amendment Act (No. 3) 1994 had been in force at the time of

the dealing.

the tax borne

at the commencement of section 165 of the Taxation Laws

Amendment Act (No. 3) 1994".

PART 5 - AMENDMENT OF THE INCOME TAX REGULATIONS

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 166

Amendment

166. Regulation 76 of the Income Tax Regulations is amended by adding at the

end the following subregulation:

"(2) If:

(a) on or after 1 July 1995, an employee receives or is entitled to receive

payments of salary or wages in respect of a week or part of a week in a year

of income; and

(b) during that week or part of a week, the employee contributes to the

maintenance of:

(i) a dependant included in class 1 in the table in

subsection 159J(2) of the Act who is a resident; and

(ii) a dependant included in class 3 or 4 in that table who is a

resident; and

159HA of the Act to replace the amount of $1,000 in relation to the dependant

included in class 1 in the table is not more than $1,452;

the employee is not entitled to have the concessional rebate applicable to the

dependant included in class 1 in the table taken into account in determining

the prescribed rate of deductions to be made for the purposes of section 221C

of the Act, by the employee's employer, from the payments of salary or

wages.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994

- SECT 167

Amendment or repeal of Income Tax Regulations

167. The amendment of the Income Tax Regulations by this Part does not

prevent the amendment or repeal, by regulations, of the Income Tax Regulations

as amended by this Part.

TAXATION LAWS AMENDMENT ACT (No. 3) 1994 No. 138 of 1994 - SCHEDULE 1

AMENDMENTS OF THE INCOME TAX ASSESSMENT ACT 1936

CONSEQUENT UPON THE INTRODUCTION OF THE

REPORTABLE PAYMENTS SYSTEM

PART 1

Item Provision to be amended Amendment

1. Subsection After "Division" (first

215(6)(paragraph (c) of the occurring) insert "1AA,".

definition of "tax")

Subsection

218(6B) (paragraph (b) and

subparagraph (c)(iii) of the

definition of "tax")

Subsection

218(6B) (definition of

"taxpayer")

Subparagraph

222AGB(2)(e)(ii)

Paragraph 222AGD(1)(b)

222AGF(4)(a)

222AHE(4)(a)

222AID(4)(a)

222AIH(3)(a)

222AJB(1)(b)

Subsection

222AJB(3)

222AJC(1)

222AOA(1)

Paragraph

222AOB(1)(a)

222AOC(a)

2. Subparagraph After "Division" (second

221AY(6)(a)(i) occurring) insert "1AA or".

221AZE(6)(a)(i)

221AZP(1)(b)(i)

3. Subparagraph After "section" insert

221YAB(a)(vii) "220AZC,".

Subsection

221ZY(1) (definition of

"relevant provision")

4. Subsection After "Divisions" insert

222AFA(1) "1AA,".

222ALA(6)

4A. Subsection After “Division” (second occurring)

222AFA(4) insert “1AA,”.

5. Subsection After "Sections" insert

222AFA(5) "220AY,".

222ANA(4)

PART 2

1. Subsection 221AV(2):

Before "3A" insert "1AA or".

2. Subsection 221YA(1):

Insert:

" 'reportable payment' has the same meaning as in Division 1AA;".

3. Subsection 221YC(1A):

Before "salary or wages," insert "reportable payments,".

4. Subsection 221YC(5):

Omit "Division 3A", substitute "Division 1AA or 3A from reportable

payments or".

5. Paragraphs 221YCAA(2)(m) and (q):

After "160AF" insert ", 220AZ, 220AZA, 220AZB".

6. After paragraph 221YDA(1)(d):

Insert:

"(daaa) the amount of the reportable payments from which deductions

have been, or will be, made in accordance with Division 1AA during

that year of income;".

7. Before paragraph 221YDA(1)(e):

Insert:

"(dba) the amount of the deductions that have been, and will be,

made under Division 1AA from reportable payments that have been, and

will be, made to the taxpayer during the year of income;".

8. Subparagraph 221YDA(2)(b)(ii):

(a) Omit "(1)(e)" insert "(1)(dba), (e)".

(b) After "in accordance with" insert "Division 1AA,".

9. Paragraph 221YDB(1A)(b):

After "includes" (first occurring) insert "reportable payments,".

10. Subparagraphs 221YDB(1A)(b)(i), (ii) and (iii):

Omit the subparagraphs, substitute:

"(i) if the income of the taxpayer of the year of income includes

reportable payments-the amount of any deductions made from those

payments under Division 1AA; and

(ii) if the income of the taxpayer of the year of income includes

salary or wages-the amount of any deductions made from that salary or

wages under sections 221C and 221D; and

(iii) if the income of the taxpayer of the year of income includes

prescribed payments-the amount of any deductions made from those

payments under Division 3A.".

11. Paragraph 221YDB(1AA)(d):

Omit all the words after "reduced", substitute:

"by the sum of the following amounts:

(i) if the income of the taxpayer of the year of income includes

reportable payments-the amount of any deductions made from those

payments under Division 1AA;

(ii) if the income of the taxpayer of the year of income includes

salary or wages-the amount of any deductions made from that salary or

wages under sections 221C and 221D;

(iii) if the income of the taxpayer of the year of income includes

prescribed payments-the amount of any deductions made from those

payments under Division 3A;".

12. Paragraph 221YDB(1ABA)(f) (subparagraph (ii) of the definition of

"Relevant amount"):

Omit all the words after "reduced", substitute:

"by the sum of the following amounts:

(A) if the income of the taxpayer of the year of income includes

reportable payments-the amount of any deductions made from those

payments under Division 1AA;

(B) if the income of the taxpayer of the year of income includes

salary or wages-the amount of any deductions made from that salary or

wages under sections 221C and 221D;

prescribed payments-the amount of any deductions made from those

payments under Division 3A;".

13. Heading to Division 8 of Part VI:

After "Divisions" insert "1AA,".

14. Subsection 222AFB(1) (definition of "person"):

Insert before paragraph (a):

"(aa) a person as defined in section 220AC; and".

15. Subsection 222AFB(1) (definition of "remittance provision"):

Insert before paragraph (a):

"(aa) in Division 1AA-subsection 220AG(1);".

16. Subsection 222ALB(2):

After "subsection" (first occurring) insert "220AY(9),".

17. Subsection 222ANA(1):

After "Division" (second occurring) insert "1AA,".

18. Heading to Subdivision B of Division 9 of Part VI:

After "Division" insert "1AA,".

NOTE ABOUT SECTION HEADING

1. On the day on which Division 1AA of Part VI of the Income Tax

Assessment Act 1936 commences, the heading to section 222AJB of that

Act is altered by inserting "1AA," after "Division".

Notes to the Taxation Laws Amendment Act (No. 3) 1994

Note 1

The Taxation Laws Amendment Act (No. 3) 1994 as shown in this compilation comprises
Act No. 138, 1994 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. 3) 1994	138, 1994	28 Nov 1994	See s. 2
Taxation Laws Amendment Act (No. 2) 1995	169, 1995	16 Dec 1995	Schedule 10 (items 7, 8): (a)	—
Statute Law Revision Act 1996	43, 1996	25 Oct 1996	Schedule 3 (item 120): 28 Nov 1994	—
Taxation Laws Amendment Act (No. 3) 1997	147, 1997	14 Oct 1997	Schedule 16 (items 2, 3): (b)	—
Tax Laws Amendment (2010 Measures No. 2) Act 2010	75, 2010	28 June 2010	Schedule 6 (item 62): 29 June 2010	—

(a) Subsections 2(8) and (9) of the Taxation Laws Amendment Act (No. 2) 1995 provide as follows:

(8) Item 7 of Schedule 10 is taken to have commenced immediately after the commencement
of section 92 of the Taxation Laws Amendment Act (No. 3) 1994.

Section 92 of the Taxation Laws Amendment Act (No. 3) 1994 commenced on 28 November 1994.

(9) Item 8 of Schedule 10 is taken to have commenced immediately after the commencement
of section 130 of the Taxation Laws Amendment Act (No. 3) 1994.

Section 130 of the Taxation Laws Amendment Act (No. 3) 1994 commenced on 28 November 1994.

(b) Subsection 2(11) of the Taxation Laws Amendment Act (No. 3) 1997 provides as follows:

(11) Items 2 and 3 of Schedule 16 are taken to have commenced immediately after the commencement
of Part 1 of the Schedule to the Taxation Laws Amendment Act (No. 3) 1994.

Part 1 of the Schedule to the Taxation Laws Amendment Act (No. 3) 1994 commenced on 28 November 1994.

Table of Amendments

ad. = added or inserted am. = amended rep. = repealed rs. = repealed and substituted
Provision affected	How affected
S. 92...................	am. No. 169, 1995
Div. 15 of Part 2...........	rep. No. 75, 2010
S. 116..................	rep. No. 75, 2010
S. 130..................	am. No. 169, 1995
Schedule................	am. No. 147, 1997