where:
‘Base amount’ means whichever is the lesser of:
(a) the cost price of the horse; or
(b) the depreciated value of the horse, within the meaning of section 62, at the time the horse became live stock of the taxpayer;
‘Nominated percentage’ means the percentage, not exceeding 25%, nominated by the taxpayer at the same time as the taxpayer selects the option referred to in paragraph (2)(a);
‘Holding days in year of income’ means:
(a) if the horse was held by the taxpayer for breeding purposes during the whole of the year of income—the number of days in the year of income; or
(b) if the taxpayer commenced to hold the horse for breeding purposes during the year of income—the number of whole days in so much of the year of income as occurred after that commencement;
‘Total days in year of income’ means the number of days in the year of income.
[Reduction amount—female horse less than 12 years old]
“(9) If a female horse has not attained the age of 12 years before the end of the year of income, then, for the purposes of this section, the reduction amount in relation to the horse in relation to the year of income is worked out using the formula:
where:
‘Base amount’ means whichever is the lesser of:
(a) the cost price of the horse; or
(b) the depreciated value of the horse, within the meaning of section 62, at the time the horse became live stock of the taxpayer;
‘Reducing factor’ means whichever is the greater of:
(a) 3; or
(b) the difference between 12 and the number of whole years in the age attained by the horse on the day on which the horse commenced to be held by the taxpayer for breeding purposes;
‘Holding days in year of income’ means:
(a) if the horse was held by the taxpayer for breeding purposes during the whole of the year of income—the number of days in the year of income; or
(b) if the taxpayer commenced to hold the horse for breeding purposes during the year of income—the number of whole days in so much of the year of income as occurred after that commencement;
‘Total days in year of income’ means the number of days in the year of income.
[Age of horse]
“(10) For the purposes of this section, the time when a horse attains a particular age expressed in years is the commencement of the relevant anniversary of the birth date of the horse.
[Horse becoming live stock more than once before end of year of income]
“(11) For the purposes of this section, if a horse becomes live stock of the taxpayer more than once before the end of the year of income, the horse is taken to have become live stock of the taxpayer on the last occasion before the end of the year of income on which it became live stock of the taxpayer.
[Horse commencing to be held for breeding purposes more than once before end of year of income]
“(12) For the purposes of this section, if the taxpayer commences to hold a horse for breeding purposes more than once before the end of the year of income, the taxpayer is taken to have commenced to hold the horse for breeding purposes on the last occasion before the end of the year of income on which the taxpayer commenced to hold the horse for breeding purposes.
[Definitions]
“(13) In this section:
‘birth date’:
(a) in relation to a horse foaled on or after 1 August in a calendar year—means 1 August in that year; and
(b) in relation to a horse foaled before 1 August in a calendar year—means 1 August in the preceding year;
‘horse breeding stock’ has the meaning given by subsection (5);
‘opening value’ has the meaning given by subsection (7);
‘reduction amount’ has the meaning given by whichever of subsections (8) and (9) is applicable;
‘special closing value’ has the meaning given by subsection (6).”.
Application
[Sections 32 and 32A of the amended Act]
24.(1) Sections 32 and 32A of the Principal Act as amended by this Act apply in relation to live stock:
(a) in any case—acquired by a taxpayer under a contract entered into on or after 19 August 1992; or
(b) in the case of section 32 of the Principal Act as amended by this Act—acquired by a taxpayer otherwise than under a contract, where the acquisition occurred on or after 19 August 1992.
[Section 32 of the Principal Act]
(2) In spite of the repeal of section 32 of the Principal Act effected by this Division, that section continues to apply, in relation to live stock:
(a) acquired by a taxpayer under a contract entered into before 19 August 1992; or
(b) acquired by a taxpayer otherwise than under a contract, where the acquisition occurred before 19 August 1992;
as if that repeal had not been effected.
Division 8—Amendments to allow deductions for environment protection expenditure
25. After section 82BG of the Principal Act the following Subdivision is inserted:
“Subdivision CA—Deductions for environment protection expenditure
Objects of Subdivision
“82BH. The objects of this Subdivision are:
(a) to provide for the deductibility of allowable environment protection expenditure (section 82BK); and
(b) to allow property used for eligible environment protection activities to be treated as if it were used for the purpose of producing assessable income (section 82BR).
Interpretation
“82BJ. In this Subdivision:
‘allowable environment protection expenditure’ has the meaning given by section 82BL;
‘eligible environment protection activity’ has the meaning given by section 82BM;
‘environment’ includes all aspects of the surroundings of humans, whether affecting them as individuals or in social groupings;
‘income-producing activity’, in relation to a taxpayer, means an activity (including an investment activity) carried on for the purpose, or for purposes that include the purpose, of producing assessable income (other than assessable income attributable to section 160Z) of the taxpayer of any year of income;
‘site’ includes a part of a site.
Deduction of allowable environment protection expenditure
[Deduction allowable]
“82BK.(1) Subject to this Subdivision, allowable environment protection expenditure incurred by a taxpayer on or after 19 August 1992 is an allowable deduction for the year of income in which the expenditure is incurred.
[Section 51 limits apply]
“(2) A provision of this Act (including a provision of section 51, other than subsection 51(1)) that expressly prevents or restricts the operation of section 51 applies in the same way to this section.
Allowable environment protection expenditure
[Meaning of “allowable environment protection expenditure”]
“82BL.(1) For the purposes of this Subdivision, if:
(a) a taxpayer incurs expenditure (whether of a capital nature or otherwise) for the sole or dominant purpose of carrying on one or more eligible environment protection activities;
then:
(b) the expenditure, to the extent that the expenditure is in respect of eligible environment protection activities in relation to the taxpayer, is allowable environment protection expenditure of the taxpayer.
[Allowable environment protection expenditure does not include allowable environmental impact expenditure]
“(2) Expenditure is taken not to be allowable environment protection expenditure to the extent to which it is allowable environmental impact expenditure (within the meaning of section 82BC).
[Deduction of last resort]
“(3) Expenditure is taken not to be allowable environment protection expenditure to the extent to which a deduction is allowable in respect of that expenditure under a provision of this Act other than section 82BK.
Eligible environment protection activity
[Meaning of “eligible environment protection activity”]
“82BM.(1) A reference in this Subdivision to an eligible environment protection activity in relation to a taxpayer is a reference to any of the following activities carried on by or on behalf of the taxpayer:
(a) preventing, combating or rectifying pollution of the environment, where:
(i) the pollution has resulted, or is likely to result, from an income-producing activity that was, is, or is proposed to be, carried on by the taxpayer; or
(ii) the pollution is of a site on which the taxpayer carried on, carries on, or proposes to carry on, an income-producing activity; or
(iii) the source of the pollution is a site on which the taxpayer carried on, carries on, or proposes to carry on, an income-producing activity; or
(iv) the pollution is of a site on which the predecessor of the taxpayer carried on a business activity; or
(v) the source of the pollution is a site on which the predecessor of the taxpayer carried on a business activity;
(b) treating, cleaning up, removing or storing waste, where:
(i) the waste has resulted, or is likely to result, from an income-producing activity that was, is, or is proposed to be, carried on by the taxpayer; or
(ii) the waste is on a site on which the taxpayer carried on, carries on, or proposes to carry on, an income-producing activity; or
(iii) the source of the waste is a site on which the taxpayer carried on, carries on, or proposes to carry on, an income-producing activity; or
(iv) the waste is on a site on which the predecessor of the taxpayer carried on a business activity; or
(v) the source of the waste is a site on which the predecessor of the taxpayer carried on a business activity.
[Site on which investment activities carried on]
“(2) For the purposes of this section, if a taxpayer carried on, carries on, or proposes to carry on, an income-producing activity consisting of:
(a) the leasing of a site owned by the taxpayer; or
(b) the granting of rights to use a site owned by, or under the control of, the taxpayer; or
(c) any similar thing;
the taxpayer is taken to have carried on, to carry on, or to propose to carry on, the income-producing activity on that site, as the case requires.
[Site on which predecessor of taxpayer carried on a business activity]
“(3) For the purposes of this section, a site (‘old site’) is a site on which the predecessor of a taxpayer carried on a business activity, if, and only if:
(a) the taxpayer carries on an income-producing activity on another site (‘new site’); and
(b) the taxpayer’s income-producing activity consists of the carrying on of a business; and
(c) the taxpayer acquired the business from another person who, or whose predecessor (whether immediate or otherwise), carried on the business on the old site; and
(d) apart from the change of site, the taxpayer’s business is the same, or substantially the same, as the business carried on by the other person, or by the other person’s predecessor, as the case requires, on the old site.
No deduction for expenditure on land, plant etc.
[No deduction for expenditure on land, buildings etc.]
“82BN.(1) A deduction is not allowable under section 82BK for:
(a) expenditure in respect of acquiring land; or
(b) expenditure of a capital nature in respect of constructing a building, structure or structural improvement; or
(c) expenditure of a capital nature in respect of constructing an extension, alteration or improvement to a building, structure or structural improvement; or
(d) expenditure in respect of a bond or security, however described, for the performance of eligible environment protection activities.
[No deduction for depreciable plant]
“(2) A deduction is not allowable under section 82BK for expenditure to the extent to which it is taken into account in calculating an amount of depreciation that is allowable as a deduction.
No deduction where expenditure is recouped
[No deduction where expenditure is recouped]
“82BP.(1) Section 82BK does not apply, and is taken never to have applied, to expenditure if:
(a) the taxpayer, whether before or after the commencement of this subsection, receives, or becomes entitled to receive, a recoupment of, or grant in respect of, the expenditure; and
(b) the amount of the recoupment or the grant is not, and will not be, included in the taxpayer’s assessable income of any year of income.
[Dissection of amounts]
“(2) For the purposes of subsection (1), if a taxpayer receives, or becomes entitled to receive, an amount that constitutes to an unspecified extent a recoupment of, or a grant in respect of, expenditure, then so much of that amount as is reasonable is taken to be a recoupment of, or grant in respect of, that expenditure, as the case requires.
[Amendment of assessments]
“(3) Section 170 does not prevent the amendment of an assessment at any time for the purpose of giving effect to this section.
Transactions between persons not at arm’s length
“82BQ. If:
(a) a person has incurred expenditure in connection with a transaction where the parties to the transaction are not dealing with each other at arm’s length in relation to the transaction; and
(b) deductions are or have been allowable under this Subdivision in respect of the expenditure; and
(c) the amount of the expenditure is greater or less than is reasonable;
the amount of the expenditure is taken, for all purposes of the application of this Act in relation to the parties to the transaction, to be the amount that would have been reasonable if the parties were dealing with each other at arm’s length.
Property used for eligible environment protection activities taken to be used for the purpose of producing assessable income
“82BR.(1) For the purposes of this Act, if property is used by a taxpayer on or after 19 August 1992 for eligible environment protection activities. that use of the property by the taxpayer is taken to be for the purpose of producing assessable income of the taxpayer.
“(2) Subsection (1) has effect subject to a provision of this Act that expressly provides that a particular use of property is not taken to be for the purpose of producing assessable income.”.
Interpretation
26. Section 124ZF of the Principal Act is amended by omitting from subsection (1) the definition of “building” and substituting the following definition:
“‘building’ includes:
(a) a structural improvement covered by section 124ZFB; and
(b) an earthwork covered by section 124ZFC;”.
27. After section 124ZFB of the Principal Act the following section is inserted:
Division has effect as if certain environment protection earthworks were buildings
[Earthworks to which this section applies]
“124ZFC.(1) This section applies to an earthwork if:
(a) the earthwork was constructed as the result of carrying out an
eligible environment protection activity in relation to any taxpayer (within the meaning of section 82BM); and
(b) the earthwork can be economically maintained in reasonably good order and condition for an indefinite period; and
(c) the earthwork is not integral to the construction of a building.
[Earthworks deemed to be buildings]
“(2) This Division has effect as if the earthwork were a building.
[Application]
“(3) This section applies in relation to expenditure incurred on or after 19 August 1992 in respect of the construction of an earthwork, or an extension, alteration or improvement to an earthwork.”.
Division 9—Amendments relating to research and development
Expenditure on research and development activities
[Amendments to extend the 150% concession for an indefinite period]
28.(1) Section 73B of the Principal Act is amended:
(a) by omitting “(a) in the case of the year of income ending on 30 June 1993 or an earlier year of income:’’ from the definition of “deduction acceleration factor” in subsection (1);
(b) by re-numbering and re-aligning subparagraphs (a)(i) and (ii) of the definition of “deduction acceleration factor” in subsection (1) so that they become paragraphs (a) and (b) respectively of that definition;
(c) by omitting “or” from the end of paragraph (a) of the definition of “deduction acceleration factor” in subsection (1);
(d) by omitting paragraph (b) of the definition of “deduction acceleration factor” in subsection (1);
(e) by omitting from subsection (13) all the words after “multiplied” and substituting “by 1.5 is an allowable deduction to the company for the year of income.”;
(f) by omitting subsection (15B).
[Amendments to remove the $10 million limit applying to pilot plant]
(2) Section 73B of the Principal Act is amended by omitting subsection (6) and substituting the following subsection:
“(6) If:
(a) the cost of a unit of pilot plant to an eligible company exceeds $10 million; and
(b) any of the following applies:
(i) the unit was acquired by the eligible company under a contract entered into before 19 August 1992;
(ii) the construction of the unit commenced before 19 August 1992;
(iii) a contract for the construction of the unit was entered into before 19 August 1992;
the cost of the unit of plant is taken, for the purposes of this section, to be $10 million.”.
[Amendments consequential upon amendments of the Industry Research and Development Act 1986 made by this Act]
(3) Section 73B of the Principal Act is amended:
(a) by omitting subsection (10) and substituting the following subsection:
“(10) A deduction is not allowable under this section to an eligible company for a year of income in respect of expenditure in relation to research and development activities unless:
(a) the company is registered, in relation to the year of income, under section 39J of the Industry Research and Development Act 1986; or
(b) the company is registered, in relation to the year of income and in relation to a project comprising or including those activities, under section 39P of that Act.”;
(b) by inserting in subsection (33) “or 39MA” after “39M”.
Recouped expenditure on research and development activities
29. Section 73C of the Principal Act is amended by omitting from subsection (8) all the words after “that subsection” and substituting “‘multiplied by 1.5’”.
30. After section 73CA of the Principal Act the following section is inserted:
Expenditure incurred to government bodies—guaranteed returns
[Interpretation—this section to be treated as part of section 73B]
“73CB.(1) For the purposes of interpretation, this section is to be construed as if it were part of section 73B.
[No deduction for expenditure incurred to government body if return guaranteed]
“(2) If:
(a) an eligible company incurs expenditure to a government body, or an associate of a government body, in connection with research and development activities carried out on behalf of the company; and
(b) the Commissioner is satisfied that, when the expenditure was incurred, the company was not at risk in respect of the whole or a part of the expenditure; and
(c) at the time when the expenditure was incurred, the government body or associate, as the case requires, was not entered on the Register of Commercial Government Bodies kept under section 39HA of the Industry Research and Development Act 1986;
a deduction is not allowable to the company under section 73B for any part of that expenditure.
[When company not at risk in respect of expenditure]
“(3) Subsection 73CA(5) applies for the purposes of this section in the same way as it applies for the purposes of section 73CA.
[Universities, research institutions etc. deemed to be government bodies]
“(4) For the purposes of this section:
(a) a university or other educational institution established by a law of the Commonwealth, a State or a Territory is taken to be an authority of the Commonwealth, the State or the Territory, as the case requires; and
(b) a research institution established by a law of the Commonwealth, a State or a Territory is taken to be an authority of the Commonwealth, the State or the Territory, as the case requires.
[Extended meaning of “associate”—government authorities]
“(5) For the purposes of this section, but without limiting the meaning of the expression ‘associate’:
(a) the Commonwealth is taken to be an associate of each authority of the Commonwealth; and
(b) an authority of the Commonwealth is taken to be an associate of each other authority of the Commonwealth; and
(c) a State is taken to be an associate of each authority of the State; and
(d) an authority of a State is taken to be an associate of each other authority of the State; and
(e) a Territory is taken to be an associate of each authority of the Territory; and
(f) an authority of a Territory is taken to be an associate of each other authority of the Territory.
[Meaning of “government body”]
“(6) In this section:
‘government body’ means:
(a) the Commonwealth, a State or a Territory; or
(b) an authority of the Commonwealth, a State or a Territory.”.
Amendment of assessments
31. Section 170 of the Principal Act is amended by inserting in subsection (10) “, 73CB” after “73C”.
Application
[Subsection 73B(10)]
32.(1) The amendments made by subsection 28(3) of this Act apply in relation to registration under section 39J or 39P of the Industry Research and Development Act 1986, where the application for registration was made after 15 October 1992.
[Section 73CB]
(2) Subject to subsection (3) of this section, section 73CB of the amended Act applies in relation to expenditure incurred by an eligible company in a year of income in connection with particular research and development activities where:
(a) on or after 19 August 1992, the company made an application under section 39J of the Industry Research and Development Act 1986 for registration in respect of the year of income; or
(b) on or after 19 August 1992, an application was made under section 39P of the Industry Research and Development Act 1986 on behalf of the company for joint registration of the company and one or more other companies in respect of the year of income in relation to one or more proposed projects comprising or including those research and development activities; or
(c) both:
(i) before 19 August 1992, the company made an application under section 39J of the Industry Research and Development Act 1986 for registration in respect of the year of income; and
(ii) a finance scheme in relation to those research and development activities was entered into, or varied, on or after 19 August 1992; or
(d) both:
(i) before 19 August 1992, an application was made under section 39P of the Industry Research and Development Act 1986 on behalf of the company for joint registration of the company and one or more other companies in respect of the year of income in relation to one or more proposed projects comprising or including those research and development activities; and
(ii) a finance scheme in relation to those research and development activities was entered into, or varied, on or after 19 August 1992.
[Exception to the rule in subsection (2)]
(3) Section 73CB of the amended Act does not apply in relation to expenditure incurred by an eligible company in a year of income in connection with particular research and development activities if:
(a) during the interim period:
(i) the company made an application under section 39J of the Industry Research and Development Act 1986 for registration in respect of the year of income; or
(ii) an application was made under section 39P of the Industry Research and Development Act 1986 on behalf of the company for joint registration of the company and one or more other companies in respect of the year of income in relation to one or more proposed projects comprising or including those research and development activities; or
(iii) the Board granted an application made by the company under section 39J of the Industry Research and Development Act 1986 for registration in respect of the year of income; or
(iv) the Board granted an application made under section 39P of the Industry Research and Development Act 1986 on behalf of the company for joint registration of the company and one or more other companies in respect of the year of income in relation to one or more proposed projects comprising or including those research and development activities; or
(v) the company made an application for an advance eligibility ruling in relation to an application proposed to be made by the company under section 39J of the Industry Research and Development Act 1986 for registration in respect of the year of income; or
(vi) an application was made for an advance eligibility ruling in relation to an application proposed to be made under section 39P of the Industry Research and Development Act 1986 on behalf of the company for joint registration of the company and one or more other companies in respect of the year of income in relation to one or more proposed projects comprising or including those research and development activities; or
(vii) the Board issued an advance eligibility ruling in relation to an application proposed to be made by the company under section 39J of the Industry Research and Development Act 1986 for registration in respect of the year of income; or
(viii) the Board issued an advance eligibility ruling in relation to an application proposed to be made under section 39P of the Industry Research and Development Act 1986 on behalf of the company for joint registration of the company and one or more other companies in respect of the year of income in relation to one or more proposed
projects comprising or including those research and development activities; and
(b) if there was or is a finance scheme in relation to those research and development activities—the finance scheme was not entered into, or varied, on or after 1 July 1993.
[Definitions]
(4) In this section:
“advance eligibility ruling”, in relation to a proposed application for the registration of a company or companies, means a statement issued by the Board to the effect that the Board is of the opinion that particular activities carried on, or proposed to be carried on, by or on behalf of the company or companies are research and development activities, where the statement is issued in connection with the proposed application;
“amended Act” means the Principal Act as amended by this Act;
“finance scheme” has the same meaning as in section 39A of the Industry Research and Development Act 1986 as amended by this Act;
“interim period” means the period:
(a) commencing on 31 March 1992; and
(b) ending at the end of 10 June 1992.
Division 10—Amendments to limit deductions for intere6st etc. on loans obtained to finance certain superannuation contributions and life assurance premiums
33. After section 67 of the Principal Act the following section is inserted:
Deductions not allowable for interest etc. on loans obtained to finance certain superannuation contributions and life assurance premiums
[Superannuation contributions—interest etc. not deductible unless contributions deductible under section 82AAC]
“67AAA.(1) A deduction is not allowable under this Act to a taxpayer in respect of a financing cost in relation to:
(a) contributions made to a fund for the purpose of making provision for superannuation benefits for, or for dependants of, the taxpayer or another person;
unless:
(b) a deduction is allowable to the taxpayer under section 82AAC for those contributions (assuming subsections 82AAC(2) to (3) (inclusive) had not been enacted).
[Life assurance premiums—interest etc. not deductible unless premium consists wholly of risk component and policy pay-out is assessable]
“(2) A deduction is not allowable under this Act to a taxpayer in respect of a financing cost in relation to a premium for a life assurance policy unless:
(a) the whole of the premium received by the insurer consists of a risk component within the meaning of section 110; and
(b) each amount which the insurer is liable to pay under the policy would be included in the taxpayer’s assessable income if it were paid.
[Definitions]
“(3) In this section:
‘dependant’ has the same meaning as in the Occupational Superannuation Standards Act 1987;
‘financing cost’, in relation to an amount (‘financed amount’), means expenditure incurred by a taxpayer to the extent to which it is incurred in respect of obtaining finance for the financed amount and, without limiting the generality of the foregoing, includes:
(a) interest or a payment in the nature of interest; and
(b) expenses of borrowing;
‘life assurance policy’ has the same meaning as in section 110, but does not include an annuity.”.
Application
34. Section 67AAA of the Principal Act as amended by this Division applies to a financing cost to the extent to which it is incurred in respect of:
(a) a loan, or other financing arrangement, that was entered into after 18 August 1992; or
(b) a loan, or other financing arrangement, resulting from a “roll-over”, after 18 August 1992, of the whole or a part of a previous loan or financing arrangement; or
(c) a period of extension of the period for which:
(i) loan money was lent; or
(ii) other finance was provided;
where the extension occurred after 18 August 1992.
Division 11—Amendments to extend the concept of Crown leases for the purposes of the depreciation provisions
Property installed on leased Crown land—lessee deemed to be owner etc.
35. Section 54AA of the Principal Act is amended:
(a) by inserting before subsection (1) the following subsection:
[“Crown lease”, “lessee” and “lessor” have extended meanings]
“(1A) The expressions “Crown lease”, “lessee” and “lessor” are given extended meanings for the purposes of this section (see subsection (8)).”;
(b) by omitting “the lease” (wherever occurring) and substituting “the Crown lease”;
(c) by omitting from paragraph (2)(a) and subsection (4) “the lessor” and substituting “any other person”;
(d) by inserting after subsection (7) the following subsection:
[Meaning of “eligible government body”]
“(7A) For the purposes of this section, a person is an eligible government body at a particular time if:
(a) the person is the Commonwealth, a State or a Territory; or
(b) both:
(i) the person is an authority of the Commonwealth, a State or a Territory; and
(ii) assuming that the authority had derived income at that time, that income would be exempt from tax because of a relevant exempting provision (within the meaning of section 160K); or
(c) the person is the government of, or of a part of, a foreign country; or
(d) both:
(i) the person is an authority of the government of a foreign country or an authority of the government of a part of a foreign country; and
(ii) the authority is of a similar nature to an authority covered by paragraph (b).”;
(e) by omitting from subsection (8) the definition of “Crown lease” and substituting the following definition:
“‘Crown lease’ means:
(a) a lease of land granted by an eligible government body; or
(b) an easement in connection with land, where the easement was granted by an eligible government body; or
(c) any other right, power or privilege over, or in connection with, land, where the right, power or privilege was granted by an eligible government body;”;
(f) by inserting in subsection (8) the following definitions:
“‘eligible government body’ has the meaning given by subsection (7A);
‘lessee’, in relation to a Crown lease, means the holder of the Crown lease;
‘lessor’, in relation to a Crown lease, means:
(a) the eligible government body which granted the Crown lease; or
(b) if the interests of the grantor in relation to the Crown lease are held by another person—that other person;”.
Application
36. Section 38 of the Taxation Laws Amendment Act (No. 3) 1992 has, and is taken to have had, effect as if the amendments made by this Division had been made by that Act.
Division 12—Amendments to extend the concept of eligible lessees for the purposes of the provisions relating to deductions for capital expenditure on buildings and structural improvements
Interpretation
37. Section 124ZF of the Principal Act is amended by inserting the following definitions in subsection (1):
“‘Crown lease’ has the same meaning as in section 54AA;
‘lease’ includes a Crown lease;
‘lessee’, in relation to a Crown lease, means a person who is a lessee within the meaning of section 54AA;”.
Application
38. The amendments made by this Division apply in relation to expenditure incurred in respect of the construction of a building, or an extension, alteration or improvement to a building, if the construction commenced after 26 February 1992.
Division 13—Amendments to deem the lessee of property installed on leased Crown land to be the owner for the purposes of the development allowance provisions
Interpretation
39. Section 82AQ of the Principal Act is amended by inserting after subsection (3) the following subsections:
“(3A) If:
(a) a taxpayer is the lessee of land under a Crown lease; and
(b) a unit of property is affixed to the land; and
(c) because of section 54AA, the provisions of this Act relating to depreciation apply as if the taxpayer were the owner of the property instead of any other person;
this Subdivision applies as if the taxpayer were the owner of the property instead of any other person.
“(3B) In subsection (3A):
‘Crown lease’ has the same meaning as in section 54AA;
‘lessee’ has the same meaning as in section 54AA.”.
Application
40. The amendment made by this Division applies to expenditure incurred by a taxpayer:
(a) in respect of the acquisition of a unit of property under a contract entered into after 26 February 1992; or
(b) in respect of the construction of a unit of property where the construction commenced after 26 February 1992.
Division 14—Amendments relating to roll-over relief where deductions allowed for research and development under section 73B
Disposal, loss or destruction of depreciated property
41. Section 59 of the Principal Act is amended:
(a) by omitting from subsection (2AA) “For” and substituting “Subject to subsection (2AB), for”;
(b) by inserting after subsection (2AA) the following subsection:
“(2AB) If:
(a) property of a taxpayer was acquired as the result of a disposal to which section 58 or 73E applied; and
(b) either:
(i) a deduction or deductions has or have been allowed or allowable to the transferor concerned under section 73B in relation to the property; or
(ii) if the disposal of the property to the taxpayer was the last of a series of 2 or more successive transfers of the property to which either one of section 58 or 73E has applied (whether alternately or otherwise)—a deduction or deductions has or have been allowed or allowable to any of the prior successive transferors under section 73B in relation to the property;
then, for the purposes of the application of subsection (2) of this section to the property, the amount worked out using the following formula is taken to have been an amount allowed to the taxpayer in respect of depreciation in relation to the property:
where:
‘Transferor’s original cost’ means:
(a) the cost of the property to the transferor for the purposes of section 73B (worked out as if subsection 73B(6) had not been enacted); or
(b) if the disposal of the property to the taxpayer was the
last of a series of 2 or more successive transfers to which either one of section 58 or 73E has applied (whether alternately or otherwise)—the cost of the property to the earliest prior successive transferor for the purposes of section 73B (worked out as if subsection 73B(6) had not been enacted);
‘Modified written-down value’ means the amount that would have been the written-down value of the property to the taxpayer for the purposes of section 73B if:
(a) whichever of the following is applicable:
(i) the deductions allowed or allowable under section 73B to the transferor in respect of one or more years of income in relation to the property;
(ii) if the disposal of the property to the taxpayer was the last of a series of 2 or more successive transfers to which either one of section 58 or 73E has applied (whether alternately or otherwise)—the deductions allowed or allowable under section 73B to the prior successive transferors in respect of one or more years of income in relation to the property;
had been deductions allowed or allowable to the taxpayer under section 73B in respect of the years of income in relation to the property; and
(b) whichever of the following is applicable:
(i) the cost of the property to the transferor for the purposes of section 73B (worked out as if subsection 73B(6) had not been enacted);
(ii) if the disposal of the property to the taxpayer was the last of a series of 2 or more successive transfers to which either one of section 58 or 73E has applied (whether alternately or otherwise)—the cost of the property to the earliest prior successive transferor for the purposes of section 73B (worked out as if subsection 73B(6) had not been enacted);
had been the cost of the property to the taxpayer.”.
42. After section 73D of the Principal Act the following sections are inserted:
Section 73B roll-over relief on disposal of unit of plant where CGT roll-over relief allowed under section 160ZZO
[Roll-over relief where CGT roll-over relief allowed]
“73E.(1) This section applies to the disposal of a unit of plant by an eligible company (in this section called the ‘transferor’) to another eligible company (in this section called the ‘transferee’) if:
(a) section 160ZZO applies to the disposal of the unit by the transferor; and
(b) subject to subsection (11), a deduction or deductions have been allowed or are allowable under subsection 73B(15) to the transferor in respect of the unit; and
(c) no deduction has been allowed or is allowable under section 54 to the transferor in respect of the unit.
[No balancing charges]
“(2) Subsection 73B(23) or (24), as the case requires, does not apply in respect of the disposal of the unit by the transferor.
[No depreciation deduction for transferor in year of disposal]
“(3) A deduction under section 54 is not allowable to the transferor in respect of the unit in relation to the year of income in which the disposal took place.
[Subsection 73B(4) definition of “qualifying plant expenditure” not applicable to transferee]
“(4) Subsection 73B(4) does not apply to the transferee in relation to the unit.
[Transferee to inherit transferor’s qualifying plant expenditure]
“(5) If:
(a) immediately after the disposal took place, the transferee commences to use the unit exclusively for the purpose of the carrying on by or on behalf of the transferee of research and development activities; and
(b) apart from the disposal, there would have been an amount of qualifying plant expenditure in relation to the transferor in relation to:
(i) the year of income of the transferor in which the disposal took place; or
(ii) the first subsequent year of income of the transferor;
then:
(c) subject to subsection 73B(5), section 73B and this section have effect as if an amount equal to that amount were taken:
(i) to have been incurred by the transferee in the acquisition of the unit; and
(ii) to be an amount of qualifying plant expenditure in relation to the transferee in relation to:
(A) if subparagraph (b)(i) applies—the year of income of the transferee in which the disposal took place; and
(B) if subparagraph (b)(ii) applies—the first subsequent year of income of the transferee; and
(d) a reference in subsection 73B(21) to the end of the second year of income after the year of income in which the transferee first used the unit exclusively for the purpose of the carrying on by or on behalf of the transferee of research and development activities is to be read as a reference to the end of the 3-year period commencing at the beginning of:
(i) the year of income in which the transferor first used the unit exclusively for the purpose of the carrying on by or on behalf of the transferor of research and development activities; or
(ii) if there have been 2 or more prior successive applications of this section—the earliest year of income in which a prior successive transferor first used the unit exclusively for the purpose of the carrying on by or on behalf of the prior successive transferor of research and development activities; and
(e) the reference in subsection 73B(22) to deductions having been allowed to the transferee under subsection 73B(15) in relation to the unit in respect of 3 years of income is to be read as a reference to deductions having been allowed to the transferee under subsection 73B(15) in relation to the unit in respect of 3 years of income, reduced by one year for each year of income for which a deduction was allowed or allowable under subsection 73B(15)to:
(i) the transferor in respect of the unit; or
(ii) if there have been 2 or more prior successive applications of this section—any of the prior successive transferors in respect of the unit.
[Modification of depreciation provisions applicable to transferee]
“(6) If depreciation is or becomes allowable to the transferee in respect of the unit, the provisions of this Act relating to depreciation apply as if:
(a) the transferee had acquired the unit for a cost equal to the modified written-down value of the unit; and
(b) subsections 73B(21) and (22) had effect as if a reference in those subsections to the written-down value of the unit were a reference to the modified written-down value of the unit; and
(c) subsection 56(1A) had effect, in relation to the year of income of the transferee in which the disposal took place, as if a day in that year of income on which the unit was dealt with in the prescribed manner (within the meaning of that subsection) by the transferor were treated as if it were a day in that year of income on which the unit was dealt with in the prescribed manner (within the meaning of that subsection) by the transferee.
[Disposal by transferee where no roll-over relief—inheritance of transferor’s cost and deductions]
“(7) If:
(a) after the disposal of the unit to the transferee, the unit is lost or destroyed or the transferee disposes of the unit; and
(b) in the case of a disposal by the transferee—this section does not apply to the disposal;
then, for the purposes of the application of subsection 73B(23) or (24), as the case may be, in relation to the loss, destruction or disposal, those subsections have effect as if:
(c) a reference in those subsections to the written-down value of the unit were a reference to the modified written-down value of the unit; and
(d) a reference in those subsections, and in the definition of ‘ineligible pilot plant amount’ in subsection 73B(1), to the cost of the unit were a reference to:
(i) the cost of the unit to the transferor (worked out as if subsection 73B(6) had not been enacted); or
(ii) if there have been 2 or more prior successive applications of this section—the cost of the unit to the earliest prior successive transferor (worked out as if subsection 73B(6) had not been enacted); and
(e) a reference in paragraph 73B(24)(f) to a year of income in respect of which a deduction has been allowed under section 73B to the transferee in respect of the unit were worked out on the basis that whichever of the following is applicable:
(i) the deductions allowed or allowable to the transferor under section 73B in respect of one or more years of income in relation to the unit;
(ii) if there have been 2 or more prior successive applications of this section—the deductions allowed or allowable to the prior successive transferors under section 73B in respect of one or more years of income in relation to the unit;
had been deductions allowed or allowable to the transferee under section 73B in respect of the years of income in relation to the unit.
[Meaning of “modified written-down value”]
“(8) For the purposes of the application of subsections (6) and (7) to the transferee, the modified written-down value of the unit is the amount that would have been the written-down value if:
(a) whichever of the following is applicable:
(i) the deductions allowed or allowable to the transferor
under section 73B in respect of one or more years of income in relation to the unit;
(ii) if there have been 2 or more prior successive applications of this section—the deductions allowed or allowable to the prior successive transferors under section 73B in respect of one or more years of income in relation to the unit;
had been deductions allowed or allowable to the transferee under section 73B in respect of the years of income in relation to the unit; and
(b) whichever of the following is applicable:
(i) the cost of the unit to the transferor (worked out as if subsection 73B(6) had not been enacted);
(ii) if there have been 2 or more prior successive applications of this section—the cost of the unit to the earliest prior successive transferor (worked out as if subsection 73B(6) had not been enacted);
had been the cost of the unit to the transferee.
[Pilot plant covered by subsection 73B(6)]
“(9) If subsection 73B(6) applied to the unit in relation to the transferor, section 73B and this section have effect as if subsection 73B(6) applies to the unit in relation to the transferee.
[Recoupment of expenditure—consequential amendment of assessments]
“(10) Section 170 does not prevent the amendment at any time of an assessment of the transferee where section 73C, 73CB or 73D has applied to:
(a) the transferor in respect of the unit; or
(b) if there have been 2 or more prior successive applications of this section—any of the prior successive transferors in respect of the unit.
[Second or subsequent application of section—paragraph (1)(b) does not apply]
“(11) If, apart from this subsection, this section has applied to the disposal of the unit to the transferee, then, in working out whether this section applies to a subsequent disposal of the unit by:
(a) the transferee; or
(b) one or more subsequent successive transferees;
this section has effect as if paragraph (1)(b) (which deals with deductions) had not been enacted.
[CGT roll-over relief applies to motor vehicles]
“(12) For the purposes of this section, in addition to the effect that section 160ZZO has apart from this subsection, that section also has the effect that it would have if a reference in that section to an asset included a reference to a motor vehicle of a kind mentioned in paragraph 82AF(2)(a).
[Interpretation]
“(13) For the purposes of interpretation, this section is to be construed as if it were part of section 73B.
[Definition]
“(14) In this section:
‘modified written-down value’ has the meaning given by subsection (8).
Section 73B roll-over relief on disposal of building etc. where CGT roll-over relief allowed under section 160ZZO
[Meaning of “unit”]
“73F.(1) In this section:
‘unit’ means a building or an extension, alteration or improvement to a building.
[Roll-over relief where CGT roll-over relief allowed]
“(2) This section applies to the disposal of a unit by an eligible company (in this section called the ‘transferor’) to another eligible company (in this section called the ‘transferee’) if:
(a) section 160ZZO applies to the disposal of the unit by the transferor; and
(b) subject to subsection (14), a deduction or deductions have been allowed or are allowable under subsection 73B(17) to the transferor in respect of the unit.
[No balancing charges]
“(3) Subsection 73B(27) does not apply in respect of the disposal of the unit by the transferor.
[5-year deduction disallowance rule does not apply]
“(4) Subsection 73B(28) does not apply in respect of the disposal of the unit by the transferor.
[Subsection 73B(4) definition of “qualifying building expenditure” not applicable to transferee]
“(5) Subsection 73B(4) does not apply to the transferee in relation to the unit.
[Transferee to inherit transferor’s qualifying building expenditure]
“(6) If:
(a) immediately after the disposal took place, the transferee commences to use the unit exclusively for the purpose of the carrying on by or on behalf of the transferee of research and development activities; and
(b) apart from the disposal, there would have been an amount of qualifying building expenditure in relation to the transferor in relation to:
(i) the year of income of the transferor in which the disposal took place; or
(ii) the first subsequent year of income of the transferor;
then, subject to subsection 73B(5), section 73B and this section have effect as if an amount equal to that amount were taken:
(c) to have been incurred by the transferee in the acquisition of the unit; and
(d) to be an amount of qualifying building expenditure in relation to the transferee in relation to:
(i) if subparagraph (b)(i) applies—the year of income of the transferee in which the disposal took place; and
(ii) if subparagraph (b)(ii) applies—the first subsequent year of income of the transferee.
[Pre-21 November 1987 rule not applicable to transferee]
“(7) Subsection 73B(5A) does not apply in relation to the acquisition of the unit by the transferee.
[Modification of 5-year deduction disallowance rule]
“(8) A reference in subsection 73B(28) to the day on which the transferee commenced to use the unit exclusively for the purpose of the carrying on by or on behalf of the transferee of research and development activities is to be read as a reference to:
(a) the day on which the transferor first used the unit exclusively for the purpose of the carrying on by or on behalf of the transferor of research and development activities; or
(b) if there have been 2 or more prior successive applications of this section—the earliest day on which a prior successive transferor first used the unit exclusively for the purpose of the carrying on by or on behalf of the prior successive transferor of research and development activities.
[Deemed cessation of use by transferee—5-year deduction disallowance rule]
“(9) For the purposes of the application of subsection 73B(28) and subsection (10) of this section to the transferee, if, immediately after the disposal of the property to the transferee took place, the transferee
did not commence to use the unit exclusively for the purpose of the carrying on by or on behalf of the transferee of research and development activities, the transferee is taken to have ceased to use the unit for that purpose immediately after the disposal took place.
[Adjustments where 5-year deduction disallowance rule applies]
“(10) If:
(a) after the disposal of the unit to the transferee, the transferee:
(i) disposes of the unit; or
(ii) ceases to use the unit exclusively for the purpose of the carrying on by or on behalf of the transferee of research and development activities; and
(b) subsection 73B(28) applies in relation to the disposal of the unit by the transferee or in relation to the cessation of use by the transferee;
then:
(c) the transferee’s assessable income of the year of income in which the acquisition of the unit by the transferee took place includes:
(i) the total amount allowed or allowable as deductions to the transferor under subsection 73B(17) in relation to the unit; or
(ii) if there have been 2 or more prior successive applications of this section—the total amount allowed or allowable as deductions to the prior successive transferors under subsection 73B(17) in relation to the unit; and
(d) the following amounts are allowable deductions to the transferee for the year of income in which the acquisition of the unit by the transferee took place:
(i) the total amount of the deductions (if any) that would have been allowable to the transferor under section 75B or 124JA or Division 10, 10AAA, 10AA or 10D in relation to the unit if section 73B had not been enacted; or
(ii) if there have been 2 or more prior successive applications of this section—the total amount of the deductions (if any) that would have been allowable to the prior successive transferors under section 75B or 124JA or Division 10, 10AAA, 10AA or 10D in relation to the unit if section 73B had not been enacted; and
(e) for the purposes of the application of section 75B or 124JA or Division 10, 10AAA, 10AA or 10D to the transferee in relation to the unit:
(i) whichever of the following is applicable:
(A) the expenditure incurred by the transferor in the acquisition or construction of the unit;
(B) if there have been 2 or more prior successive applications of this section—the expenditure incurred by the earliest prior successive transferor in the acquisition or construction of the unit;
is taken to have been expenditure incurred by the transferee in the acquisition of the unit; and
(ii) a deduction allowable to the transferee under paragraph (d) of this subsection in relation to the unit is taken to be a deduction allowable to the transferee in relation to the unit under section 75B or 124JA or Division 10, 10AAA, 10AA or 10D, as the case requires.
[Disposal by transferee where no roll-over relief—inheritance of transferor’s deductions]
“(11) If:
(a) after the disposal of the unit to the transferee, the transferee disposes of the unit; and
(b) this section does not apply to the disposal by the transferee; and
(c) subsection 73B(27) applies to the disposal by the transferee;
then, for the purposes of the application of subsection 73B(27) in relation to the disposal:
(d) whichever of the following is applicable:
(i) the expenditure incurred by the transferor in the acquisition or construction of the unit;
(ii) if there have been 2 or more prior successive applications of this section—the expenditure incurred by the earliest prior successive transferor in the acquisition or construction of the unit;
is taken to have been expenditure incurred by the transferee in the acquisition of the unit; and
(e) the total of:
(i) the amounts that would, apart from section 73B, have been allowed or allowable as deductions to the transferor under Division 10D in respect of the expenditure of the transferor in the acquisition or construction of the unit; and
(ii) if there have been 2 or more prior successive applications of this section—the amounts that would, apart from section 73B, have been allowed or allowable as deductions to the prior successive transferors under Division 10D in respect of the expenditure incurred by the earliest prior
successive transferor in the acquisition or construction of the unit;
are taken to have been amounts that would, apart from section 73B, have been allowed or allowable as deductions to the transferee under Division 10D in respect of expenditure incurred by the transferee in the acquisition of the unit.
[Destruction of building etc.—inheritance of transferor’s deductions]
“(12) If, after the disposal of the unit to the transferee, the unit, or a part of the unit, is destroyed, then, for the purposes of the application of subsection 73B(25) or (26), as the case may be, in relation to the destruction:
(a) whichever of the following is applicable:
(i) the expenditure incurred by the transferor in the acquisition or construction of the unit;
(ii) if there have been 2 or more prior successive applications of this section—the expenditure incurred by the earliest prior successive transferor in the acquisition or construction of the unit;
is taken to have been expenditure incurred by the transferee in the acquisition of the unit; and
(b) the total of:
(i) the amounts allowed or allowable as deductions to the transferor under. subsection 73B(17) in relation to the unit; or
(ii) if there have been 2 or more prior successive applications of this section—the amounts allowed or allowable as deductions to the prior successive transferors under subsection 73B(17) in relation to the unit;
are taken to have been amounts allowed or allowable to the transferee as deductions under subsection 73B(17) in relation to the unit.
[Recoupment of expenditure—consequential amendment of assessments]
“(13) Section 170 does not prevent the amendment at any time of an assessment of the transferee where section 73C or 7 3D has applied to:
(a) the transferor in respect of the unit; or
(b) if there have been 2 or more prior successive applications of this section—any of the prior successive transferors in respect of the unit.
[Second or subsequent application of section—paragraph (2)(b) does not apply]
“(14) If, apart for this subsection, this section has applied to the disposal of the unit to the transferee, then, in working out whether this section applies to a subsequent disposal of the unit by:
(a) the transferee; or
(b) one or more subsequent successive transferees;
this section has effect as if paragraph (2)(b) (which deals with deductions) had not been enacted.
[Interpretation]
“(15) For the purposes of interpretation, this section is to be construed as if it were part of section 73B.
Section 73B roll-over relief on disposal of unit of industrial property where CGT roll-over relief allowed under section 160ZZO
[Roll-over relief where CGT roll-over relief allowed]
“73G.(1) This section applies to the disposal of a unit of industrial property (within the meaning of Division 10B) by an eligible company (the ‘transferor’) to another eligible company (the ‘transferee’) if:
(a) section 160ZZO applies to the disposal of the unit by the transferor; and
(b) subject to subsection (5), apart from this section, an amount would be included in the transferor’s assessable income under subsection 73B(27A) in respect of the disposal.
[Transferor not assessable under subsection 73B(27A) on disposal]
“(2) Subsection 73B(27A) does not apply in respect of the disposal of the unit by the transferor.
[No deduction for transferee’s acquisition expenditure]
“(3) No part of the expenditure (if any) incurred by the transferee in the acquisition of the unit is an allowable deduction to the transferee under any provision of this Act.
[Disposal by transferee where no roll-over relief—proceeds of disposal assessable to transferee]
“(4) If:
(a) after the disposal of the unit to the transferee, the transferee disposes of the unit; and
(b) this section does not apply to the disposal by the transferee;
the transferee’s assessable income of the year of income in which the disposal by the transferee took place includes the consideration receivable in respect of the disposal.
[Subsequent application of section—paragraph (1)(b) does not apply]
“(5) If, apart from this subsection, this section has applied to the disposal of the unit to the transferee, then, in working out whether this section applies to a subsequent disposal of the unit by:
(a) the transferee; or
(b) one or more subsequent successive transferees;
this section has effect as if paragraph (1)(b) (which deals with assessability under subsection 73B(27A)) had not been enacted.
[Interpretation]
“(6) For the purposes of interpretation, this section is to be construed as if it were part of section 73B.”.
Keeping of records
43. Section 262A of the Principal Act is amended:
(a) by inserting in subsection (4AC) “73E(1), 73F(1), 73G(1),” after “73AA(1),”;
(b) by inserting in paragraph (4AC)(a) “73E, 73F, 73G,” after “73AA,”.
Application
[Meaning of “amended Act”]
44.(1) In this section:
“amended Act” means the Principal Act as amended by this Act.
[Depreciation balancing charge—section 58 or 73E roll-over relief]
(2) The amendments of section 59 of the Principal Act made by this Division apply in relation to disposals of property before, at or after the commencement of this subsection.
[Section 73B (research and development) roll-over relief]
(3) Sections 73E, 73F and 73G of the amended Act apply to disposals of property after 15 October 1992.
Transitional—elective roll-over relief where property disposed of after 6 December 1990
[Definitions]
45.(1) In this section:
“amended Act” means the Principal Act as amended by this Act;
“eligible company” has the same meaning as in section 73B of the Principal Act;
“roll-over section” means section 73E, 73F or 73G.
[Extended application of roll-over sections]
(2) If:
(a) an eligible company (the “transferor”) disposed of property to another eligible company (the “transferee”); and
(b) the disposal took place after 6 December 1990 and before 16 October 1992; and
(c) the transferor and the transferee make a joint election that this section apply to the disposal; and
(d) assuming that both the transferor and the transferee had elected under paragraph 160ZZO(1)(d) of the Principal Act that section 160ZZO of the Principal Act apply in respect of the disposal of the property:
(i) section 160ZZO of the Principal Act would have applied to the disposal of the property; and
(ii) if the disposal had taken place after 15 October 1992, a roll-over section would have applied to the disposal of the property;
then, in addition to the application of the roll-over section concerned apart from this section, the roll-over section applies to the disposal.
[How joint election made]
(3) A joint election under subsection (2) has no effect unless it:
(a) is in writing; and
(b) is made:
(i) within 6 months after the later of the following:
(A) the end of the year of income of the transferee in which the disposal occurred;
(B) the commencement of this subsection; or
(ii) within such further period as the Commissioner allows.
[Retention of joint election]
(4) A person who is a party to a joint election under subsection (2) must retain the election, or a copy, until the end of 5 years after the earlier of:
(a) the disposal by the person of the property; or
(b) the loss or destruction of the property.
Penalty: $3,000.
[Exceptions to retention rules]
(5) Subsection (4) does not require a person to retain an election, or a copy, if:
(a) the Commissioner has notified the person that retention of the election or copy is not required; or
(b) the person is a company that has gone into liquidation and has been finally dissolved.
[Extension of roll-over relief to motor vehicles]
(6) For the purposes of this section, in addition to the effect that section 160ZZO of the Principal Act has apart from this subsection, that section also has the effect that it would have if a reference in that section to an asset included a reference to a motor vehicle of a kind mentioned in paragraph 82AF(2)(a) of the Principal Act.
Division 15—Amendments relating to roll-over relief where capital deductions have been allowed
Depreciation roll-over relief for unpooled property where CGT roll-over relief allowed under section 160ZZM, 160ZZMA, 160ZZN, 160ZZNA or 160ZZO or where election for roll-over relief made under section 59AA
46. Section 58 of the Principal Act is amended:
(a) by inserting in paragraph (1)(b) “subject to subsection (7A),” before “depreciation”;
(b) by inserting after subsection (7) the following subsection:
[Second or subsequent application of section—paragraph (1)(b) does not apply]
“(7A) If, apart from this subsection, this section has applied to the disposal of the property to the transferee, then, in working out whether this section applies to a subsequent disposal of the property by:
(a) the transferee; or
(b) one or more subsequent successive transferees;
this section has effect as if paragraph (1)(b) (which deals with deductions for depreciation) had not been enacted.”.
Section 73A roll-over relief where CGT roll-over relief allowed under section 160ZZM, 160ZZMA, 160ZZN, 160ZZNA or 160ZZO
47. Section 73AA of the Principal Act is amended:
(a) by inserting in paragraph (1)(b) “subject to subsection (7),” before “deductions”;
(b) by adding at the end the following subsection:
[Second or subsequent application of section—paragraph (1)(b) does not apply]
“(7) If, apart from this subsection, this section has applied to the disposal of the building or the part of the building to the transferee, then, in working out whether this section applies to a subsequent disposal of the building or the part of the building by:
(a) the transferee; or
(b) one or more subsequent successive transferees;
this section has effect as if paragraph (1)(b) (which deals with deductions) had not been enacted.”.
Roll-over relief where CGT roll-over relief allowed under section 160ZZM, 160ZZMA, 160ZZN, 160ZZNA or 160ZZO or where election for roll-over relief made under section 122R
48. Section 122JAA of the Principal Act is amended:
(a) by inserting in paragraph (1)(b) “subject to subsection (22A),” before “deductions”;
(b) by inserting after subsection (22) the following subsection:
[Second or subsequent application of section—paragraph (1)(b) does not apply]
“(22A) If, apart from this subsection, this section has applied to the disposal of the property to the transferee, then, in working out whether this section applies to a subsequent disposal of the property by:
(a) the transferee; or
(b) one or more subsequent successive transferees;
this section has effect as if paragraph (1)(b) (which deals with deductions) had not been enacted.”.
Roll-over relief where CGT roll-over relief allowed under section 160ZZM, 160ZZMA, 160ZZN, 160ZZNA or 160ZZO or where election for roll-over relief made under section 122R
49. Section 122JG of the Principal Act is amended:
(a) by inserting in paragraph (1)(b) “subject to subsection (12A),” before “deductions”;
(b) by inserting after subsection (12) the following subsection:
[Second or subsequent application of section—paragraph (1)(b) does not apply]
“(12A) If, apart from this subsection, this section has applied to the disposal of the property to the transferee, then, in working out whether this section applies to a subsequent disposal of the property by:
(a) the transferee; or
(b) one or more subsequent successive transferees;
this section has effect as if paragraph (1)(b) (which deals with deductions) had not been enacted.”.
Roll-over relief where CGT roll-over relief allowed under section 160ZZM, 160ZZMA, 160ZZN, 160ZZNA or 160ZZO or where election for roll-over relief made under section 123F
50. Section 123BBA of the Principal Act is amended:
(a) by inserting in paragraph (1)(b) “subject to subsection (16),” before “deductions”;
(b) by adding at the end the following subsection:
[Second or subsequent application of section—paragraph (1)(b) does not apply]
“(16) If, apart from this subsection, this section has applied to the disposal of the property to the transferee, then, in working out whether this section applies to a subsequent disposal of the property by:
(a) the transferee; or
(b) one or more subsequent successive transferees;
this section has effect as if paragraph (1)(b) (which deals with deductions) had not been enacted.”.
Roll-over relief where CGT roll-over relief allowed under section 160ZZM, 160ZZMA, 160ZZN, 160ZZNA or 160ZZO or where election for roll-over relief made under section 123F
51. Section 123BF of the Principal Act is amended:
(a) by inserting in paragraph (1)(b) “subject to subsection (9),” before “deductions”;
(b) by adding at the end the following subsection:
[Second or subsequent application of section—paragraph (1)(b) does not apply]
“(9) If, apart from this subsection, this section has applied to the disposal of the property to the transferee, then, in working out whether this section applies to a subsequent disposal of the property by:
(a) the transferee; or
(b) one or more subsequent successive transferees;
this section has effect as if paragraph (1)(b) (which deals with deductions) had not been enacted.”.
Roll-over relief where CGT roll-over relief allowed under section 160ZZM, 160ZZMA, 160ZZN, 160ZZNA or 160ZZO or where election for roll-over relief made under section 124AO
52. Section 124AMAA of the Principal Act is amended:
(a) by inserting in paragraph (1)(b) “subject to subsection (18A),” before “deductions”;
(b) by inserting after subsection (18) the following subsection:
[Second or subsequent application of section—paragraph (1)(b) does not apply]
“(18A) If, apart from this subsection, this section has applied to the disposal of the property to the transferee, then, in working out whether this section applies to a subsequent disposal of the property by:
(a) the transferee; or
(b) one or more subsequent successive transferees;
this section has effect as if paragraph (1)(b) (which deals with deductions) had not been enacted.”.
Roll-over relief where CGT roll-over relief allowed under section 160ZZM, 160ZZMA, 160ZZN, 160ZZNA or 160ZZO
53. Section 124GA of the Principal Act is amended:
(a) by inserting in paragraph (1)(b) “subject to subsection (5),” before “deductions”;
(b) by adding at the end the following subsection:
[Second or subsequent application of section—paragraph (1)(b) does not apply]
“(5) If, apart from this subsection, this section has applied to the disposal of the property to the transferee, then, in working out whether this section applies to a subsequent disposal of the property by:
(a) the transferee; or
(b) one or more subsequent successive transferees;
this section has effect as if paragraph (1)(b) (which deals with deductions) had not been enacted.”.
Roll-over relief where CGT roll-over relief allowed under section 160ZZM, 160ZZMA, 160ZZN, 160ZZNA or 160ZZO
54. Section 124JD of the Principal Act is amended:
(a) by inserting in paragraph (1)(b) “subject to subsection (5),” before “deductions”;
(b) by adding at the end the following subsection:
[Second or subsequent application of section—paragraph (1)(b) does not apply]
“(5) If, apart from this subsection, this section has applied to the disposal of the building to the transferee, then, in working out whether this section applies to a subsequent disposal of the building by:
(a) the transferee; or
(b) one or more subsequent successive transferees;
this section has effect as if paragraph (1)(b) (which deals with deductions) had not been enacted.”.
Roll-over relief where CGT roll-over relief allowed under section 160ZZM, 160ZZMA, 160ZZN, 160ZZNA or 160ZZO or where election for roll-over relief made under section 122W
55. Section 124PA of the Principal Act is amended:
(a) by inserting in paragraph (1)(b) “subject to subsection (6),” before “deductions”;
(b) by adding at the end the following subsection:
[Second or subsequent application of section—paragraph (1)(b) does not apply]
“(6) If, apart from this subsection, this section has applied to the disposal of the unit to the transferee, then, in working out whether this section applies to a subsequent disposal of the unit by:
(a) the transferee; or
(b) one or more subsequent successive transferees;
this section has effect as if paragraph (1)(b) (which deals with deductions) had not been enacted.”.
Application
56. The amendments made by this Division apply to disposals of property after 19 December 1991.
Transitional—elective capital deduction roll-over relief where CGT roll-over relief available under section 160ZZO of the Principal Act and property disposed of after 6 December 1990
57. Section 72 of the Taxation Laws Amendment Act 1992 has, and is taken to have had, effect as if the amendments made by this Division had been made by that Act.
Division 16—Amendment relating to record-keeping
Keeping of records
58. Section 262A of the Principal Act is amended by re-locating subsection (4A) so that it becomes the subsection after subsection (4).
Division 17—Amendments relating to royalties
Interpretation
59. Section 6 of the Principal Act is amended:
(a) by inserting after paragraph (d) of the definition of “royalty” or “royalties” in subsection (1) the following paragraphs:
“(da) the reception of, or the right to receive, visual images or sounds, or both, transmitted to the public by:
(i) satellite; or
(ii) cable, optic fibre or similar technology;
(db) the use in connection with television broadcasting or radio broadcasting, or the right to use in connection with television broadcasting or radio broadcasting, visual images or sounds, or both, transmitted by:
(i) satellite; or
(ii) cable, optic fibre or similar technology;”;
(b) by omitting “or” from the end of subparagraph (f)(ii) of the definition of “royalty” or “royalties” in subsection (1);
(c) by inserting after subparagraph (f)(ii) of the definition of “royalty” or “royalties” in subsection (1) the following subparagraphs:
“(iia) the reception of, or the granting of the right to receive, any such visual images or sounds as are mentioned in paragraph (da);
(iib) the use of, or the granting of the right to use, any such visual images or sounds as are mentioned in paragraph (db); or”.
Source of royalty income derived by a non-resident
60. Section 6C of the Principal Act is amended by omitting from subsection (2) “, section 25, Division 13A of Part III and section 255” and substituting “and section 25”.
Interpretation
61. Section 103 of the Principal Act is amended by inserting in paragraph (a) of the definition of “the distributable income” in subsection (1) “the repealed” before “section 136A”.
Heading to Division 11A of Part III
62. The heading to Division 11A of Part III of the Principal Act is amended by omitting “and Interest” and substituting “, Interest and Royalties”.
Interpretation
63. Section 128A of the Principal Act is amended:
(a) by inserting after subsection (1) the following subsection:
“(1AA) In this Division and in an Act imposing withholding tax:
‘income’ includes a royalty.”;
(b) by inserting in subsection (2) “or a royalty” after “interest”;
(c) by omitting from subsection (3) “or to interest” and substituting “, to interest or to a royalty”;
(d) by omitting from subsection (3) “or interest” and substituting “, interest or royalty”.
Liability to withholding tax
64. Section 128B of the Principal Act is amended:
(a) by inserting after subsection (2A) the following subsection:
“(2B) Subject to subsection (3), this section also applies to income that:
(a) is derived by a non-resident:
(i) during the 1993-94 year of income of the non-resident; or
(ii) during a later year of income of the non-resident; and
(b) consists of a royalty that:
(i) is paid to the non-resident by a person to whom this section applies and is not an outgoing wholly incurred by that person in carrying on business in a foreign country at or through a permanent establishment of that person in that country; or
(ii) is paid to the non-resident by a person who, or by persons each of whom, is not a resident and is, or is in part, an outgoing incurred by that person or those persons in carrying on business in Australia at or through a permanent establishment of that person or those persons in Australia.”;
(b) by inserting after subsection (5) the following subsection:
“(5A) A person who derives income to which this section applies that consists of a royalty is liable to pay income tax upon that income at the rate declared by the Parliament in respect of income to which this subsection applies.”.
Repeal of Division 13A of Part III
65. Division 13A of Part III of the Principal Act is repealed.
Interpretation
66. Section 221YHZA of the Principal Act is amended:
(a) by omitting “a royalty payment” from the definition of “natural resource payment” in subsection (1) and substituting “a payment of, or by way of, royalty”;
(b) by omitting from subsection (1) the definition of “royalty payment”.
Person making natural resource payment to non-resident to ascertain amount to be deducted in respect of tax
67. Section 221YHZB of the Principal Act is amended:
(a) by omitting from subsection (1) “, or a royalty payment,”;
(b) by omitting from paragraph (1)(a) “, or royalty payment, as the case may be,”.
Duties of payers
68. Section 221YHZC of the Principal Act is amended by omitting from subsection (1) “, or a royalty payment,”.
Interpretation
69. Section 221YK of the Principal Act is amended by inserting in paragraphs (3)(a) and (b) “or a royalty” after “interest”.
Deductions from dividends, interest and royalties
70. Section 221YL of the Principal Act is amended:
(a) by inserting after subsection (2F) the following subsections:
“(2G) If a royalty is payable by a person, including the Commonwealth, a State or an authority of the Commonwealth or of a State (the ‘royalty payer’) to another person, or to other persons jointly, and:
(a) that other person, or one or more of those other persons, is or are shown, in relation to the transaction to which the royalty relates, in any book, document or record in the possession of or kept or maintained on behalf of the royalty payer, as having an address outside Australia; or
(b) the royalty payer is authorised to pay the royalty, either to the person or persons to whom it is payable or to another person or persons, at a place outside Australia;
the royalty payer must, subject to this section and to section 221YM, before or at the time when the royalty is paid by the royalty payer, make a deduction from the royalty of an amount determined in accordance with the regulations.
“(2H) Subject to this section and to section 221YM, if:
(a) a royalty is paid by a person to the Commonwealth, a State, an authority of the Commonwealth or of a State or a person in Australia (the ‘payee’); and
(b) another person who is a non-resident is entitled:
(i) to receive the royalty or a part of the royalty, or the amount of the royalty or of a part of the royalty, from the payee; or
(ii) to have the royalty or a part of the royalty, credited to him or her, or otherwise dealt with on his or her behalf, or as he or she directs, by. the payee;
the payee must, except as provided by the regulations, immediately make a deduction from the royalty, or the part of the royalty, of an amount determined in accordance with the regulations.”;
(b) by omitting from subsections (3), (3A), (4A) and (4B) “or from interest” and substituting “, from interest or from a royalty”;
(c) by omitting from subsection (3) “or the interest” (wherever occurring) and substituting “, the interest or the royalty”;
(d) by omitting from subsection (3A) “or interest” and substituting “, interest or royalty”.
Exemptions and variations
71. Section 221YM of the Principal Act is amended:
(a) by omitting from paragraph (b) “or” (second-last occurring);
(b) by adding at the end of paragraph (b) “, or from royalties or from royalties included in a class of royalties”.
Deductions to be forwarded to Commissioner etc.
72. Section 221YN of the Principal Act is amended by omitting from subsection (1) “or from interest” and substituting “, from interest or from royalties”.
Liability of person who fails to make deductions etc.
73. Section 221YQ of the Principal Act is amended:
(a) by omitting from subsection (1) “or from interest” and substituting “, from interest or from a royalty”;
(b) by omitting from paragraph (1)(a) “or interest” and substituting “, interest or royalty”.
Interest or royalty not allowable deduction until payment made to Commissioner on account of tax
74. Section 221YRA of the Principal Act is amended:
(a) by inserting after subsection (1) the following subsection:
“(1A) If:
(a) a person:
(i) has not made a deduction from a royalty as required by subsection 221YL(2G); or
(ii) having made a deduction under that subsection from a royalty, has not complied with paragraph 221YN(1)(a) in relation to the deduction; and
(b) any withholding tax payable in respect of the royalty has not been paid;
then, subject to subsection (2), the royalty is not an allowable deduction.”;
(b) by inserting in subsection (2) “or royalty” after “interest” (wherever occurring);
(c) by inserting in subsection (2) “or (1A)” after “(1)”;
(d) by omitting from subsection (3) “subsection (1) applies” and substituting “subsections (1) and (1A) apply”.
Credits in respect of deductions made from dividends, interest or royalties
75. Section 221YS of the Principal Act is amended by omitting from subsection (1) “or interest” and substituting “, interest or a royalty”.
Liability of trustee to pay deductions to Commissioner
76. Section 221YU of the Principal Act is amended by omitting from paragraph (1)(a) “or from interest” and substituting “, from interest or from a royalty”.
Persons discharged from liability in respect of deductions
77. Section 221YV of the Principal Act is amended by omitting “or from interest” and substituting “, from interest or from a royalty”.
Person in receipt or control of money from non-resident
78. Section 255 of the Principal Act is amended by omitting from subsection (2A) “, or a royalty payment,”.
Certain provisions to be disregarded in calculating attributable income
79. Section 389 of the Principal Act is amended by omitting from paragraph (a) “, section 136A”.
Repeal of the Income Tax (Film Royalties) Act 1977
80. The Income Tax (Film Royalties) Act 1977 is repealed.
Application
81. The amendments made, and repeals effected, by this Division apply in relation to amounts derived by a taxpayer during the 1993-94 year of income of the taxpayer or during a later year of income of the taxpayer.
Transitional—equipment royalties paid under pre-18 August 1992 contracts
82.(1) Section 128B of the Principal Act as amended by this Act does not apply to an equipment royalty if:
(a) the royalty was paid or credited under a contract entered into before 8 p.m., by standard time in the Australian Capital Territory, on 18 August 1992; and
(b) no variation of the contract occurred during the period:
(i) beginning at that time; and
(ii) ending immediately before the royalty was paid or credited.
(2) In this section:
“equipment royalty” means:
(a) a royalty covered by paragraph (b) of the definition of “royalty” or “royalties” in subsection 6(1) of the Principal Act; or
(b) a royalty covered by subparagraph (f)(i) of that definition, in so far as that subparagraph relates to paragraph (b) of that definition.
Division 18—Amendments relating to foreign income
Distribution benefits—CFCs
83. Section 47A of the Principal Act is amended:
(a) by adding “and” at the end of paragraph (13)(b);
(b) by inserting after paragraph (13)(b) the following paragraph:
“(ba) if the eligible benefit consists of the acquisition of a share or unit—at that later time, the share or unit has not been redeemed or bought back by the recipient mentioned in subsection (8) for a consideration equal to or greater than the arm’s length value of the share or unit;”;
(c) by adding “and” at the end of paragraph (14)(c);
(d) by inserting after paragraph (14)(c) the following paragraph:
“(ca) if the second eligible benefit is covered by subsection (8) or (11):
(i) the second eligible benefit is provided on or after 13 September 1990; or
(ii) both:
(A) the second eligible benefit was provided before 13 September 1990; and
(B) the Commissioner is of the opinion that the provision of the second eligible benefit had, or would be likely to have, the effect of enabling any taxpayer to avoid tax;”;
(e) by inserting in subsection (21) the following definition:
“ ‘arm’s length value’, in relation to the redemption or buy-back of a share in a company or a unit in a unit trust, means the amount that the company or trustee could reasonably be expected to have been required to pay to obtain the redemption or buy-back of the share or unit under a transaction where the parties to the transaction are dealing with each other at arm’s length in relation to the transaction;”.
Primary production losses of pre-1990 years of income
84. Section 80AA of the Principal Act is amended by inserting after subsection (5) the following subsections:
“(5A) The losses referred to in subsection (4) are not allowable as a deduction from assessable foreign income of a taxpayer except to the extent provided in an election under subsection (5B).
“(5B) A taxpayer who has derived assessable foreign income in a year of income may elect that the whole or a specified part of the losses referred to in subsection (5A) be allowable as a deduction from the taxpayer’s assessable foreign income of that year.
“(5C) In subsections (5A) and (5B):
‘assessable foreign income’ has the same meaning as in section 160AFD.
“(5D) An election under subsection (5B) must be made:
(a) before whichever is the later of the following:
(i) the end of the period of 6 months after the commencement of this subsection;
(ii) the day after the day of lodgment of the taxpayer’s return of income of the year of income to which the election relates; or
(b) within such further period as the Commissioner allows.”.
Credits in respect of foreign tax
85. Section 160AF of the Principal Act is amended by omitting “or 80(2C)” from paragraph (b) of the definition of “net foreign income” in subsection (8) and substituting “, 80AA(5B) or 80(2C)”.
Application
[Section 47A deemed dividends]
86.(1) The amendments of section 47A of the Principal Act made by this Division apply in relation to dividends paid after 3 June 1990.
[Primary production losses]
(2) The amendments of sections 80AA and 160AF of the Principal Act made by this Act apply to assessments in respect of income of the 1991-92 year of income and of all later years of income.
Division 19—Amendment of assessments
Amendment of assessments
87. Section 170 of the Principal Act does not prevent the amendment of an assessment made before the commencement of this section for the purpose of giving effect to this Act.
PART 3—AMENDMENT OF THE INCOME TAX (INTERNATIONAL AGREEMENTS) ACT 1953
Division 1—Principal Act
Principal Act
88. In this Part, “Principal Act” means the Income Tax (International Agreements) Act 19532.
Division 2—Amendments relating to royalties
Withholding tax
89. Section 17A of the Principal Act is amended:
(a) by inserting in subsection (1) “or a royalty” after “dividend” (wherever occurring).
(b) by adding at the end the following subsection:
“(4) If:
(a) a provision (‘basic royalty provision’) of an agreement is covered by either of the following subparagraphs:
(i) paragraph 1 or 2 of Article 12 of the Chinese agreement;
(ii) a corresponding provision of another agreement; and
(b) another provision of the agreement expressly excludes particular royalties (‘excluded royalties’) from the scope of the basic royalty provision;
section 128B of the Assessment Act (which deals with liability for withholding tax) does not apply to the excluded royalties.”.
Application
90. The amendments made by this Division apply to withholding tax that became payable before, or becomes payable on or after, the date of commencement of this section.
PART 4—AMENDMENT OF THE INDUSTRY RESEARCH AND DEVELOPMENT ACT 1986
Division 1—Principal Act
Principal Act
91. In this Part, “Principal Act” means the Industry Research and Development Act 19863.
Division 2—Amendments relating to finance schemes
Interpretation
92. Section 4 of the Principal Act is amended by inserting in subsection (1) the following definition:
“ ‘finance scheme guidelines’ means guidelines made under section 39EA;”.
Functions of Board
93. Section 7 of the Principal Act is amended by inserting after paragraph (a) the following paragraph:
“(aa) such functions as are conferred on it by the finance scheme guidelines;”.
Duties of Chairperson
94. Section 11 of the Principal Act is amended by adding at the end the following subsection:
“(2) In this section:
‘this Act’ includes finance scheme guidelines.”.
Guidelines for policies and practices of Board
95. Section 20 of the Principal Act is amended by adding at the end the following subsection:
“(6) In this section:
‘this Act’ includes finance scheme guidelines.”.
Delegation by Board
96. Section 21 of the Principal Act is amended by adding at the end the following subsection:
“(8) In this section:
‘this Act’ includes finance scheme guidelines.”.
Committees
97. Section 22 of the Principal Act is amended by adding at the end the following subsection:
“(9) In this section:
‘this Act’ includes finance scheme guidelines.”.
Delegation by committee
98. Section 22A of the Principal Act is amended by adding at the end the following subsection:
“(6) In this section:
‘this Act’ includes finance scheme guidelines.”.
Interpretation
99. Section 39A of the Principal Act is amended by inserting in subsection (1) the following definitions:
“ ‘finance’ includes debt finance and equity finance;
‘finance scheme’, in relation to research and development activities carried on, or proposed to be carried on, by or on behalf of an eligible company, means a scheme entered into or carried out by any of the parties to the scheme for the purpose, or for purposes that include the purpose:
(a) of enabling the company, or an associate of the company, to obtain finance (whether by way of renewal or otherwise) in connection with those activities; or
(b) of enabling the company, or an associate of the company, to
obtain an extension of the period for which finance was obtained in connection with those activities under an earlier scheme;
‘ineligible finance scheme’ means a finance scheme that is taken to be an ineligible finance scheme under the finance scheme guidelines;
‘scheme’ means:
(a) an agreement, arrangement, understanding, promise or undertaking, whether express or implied and whether or not enforceable, or intended to be enforceable, by legal proceedings; and
(b) a scheme, plan, proposal, action, course of action or course of conduct.”.
100. After section 39E of the Principal Act the following section is inserted:
Finance scheme guidelines
“39EA.(1) The Board must, as soon as practicable (and, in any event, within 90 days) after the commencement of this section, formulate written guidelines to enable eligible companies to ascertain whether finance schemes in relation to research and development activities carried on, or proposed to be carried on, by eligible companies will be taken to be ineligible finance schemes for the purposes of this Part.
“(2) The Board must cause the finance scheme guidelines to be:
(a) published in the Gazette; and
(b) made available on request, without charge, to any eligible company.
“(3) In making finance scheme guidelines about a particular kind of scheme, the matters to which the Board is to have regard include, but are not limited to:
(a) the manner in which the scheme was entered into or carried out; and
(b) the form and substance of the scheme; and
(c) matters relating to the research and development activities to which the scheme relates; and
(d) the likelihood that section 73CB of the Income Tax Assessment Act 1936 will apply to expenditure incurred in connection with the research and development activities to which the scheme relates.
“(4) The finance scheme guidelines may confer functions and powers on the Board.
“(5) The first finance scheme guidelines may be expressed to apply to schemes entered into or carried out before the commencement of this section.
“(6) An instrument formulating finance scheme guidelines is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901”.
101. After section 39M of the Principal Act the following section is inserted:
Certificate about ineligible finance schemes
“39MA.(1) If:
(a) expenditure has been incurred in connection with particular research and development activities by a company registered under section 39J or 39P; and
(b) the Board is of the opinion that there was or is an ineligible finance scheme in relation to those research and development activities;
the Board may give a written certificate to the Commissioner:
(c) stating that it is of that opinion; and
(d) specifying the research and development activities concerned; and
(e) giving the reasons for its opinion.
“(2) The Board must not give a certificate under this section in relation to a company unless the Board has:
(a) given a written notice to the company:
(i) stating that the Board is considering giving the certificate;
and
(ii) specifying the activities to which the certificate would relate; and
(iii) informing the company of the reasons why it is considering giving the certificate; and
(b) invited the company to make a written submission to the Board in relation to the matter within 90 days; and
(c) if such a submission is made within that period—had regard to the matters raised in the submission.”.
Joint registration
102. Section 39P of the Principal Act is amended by inserting after paragraph (3)(c) the following paragraph:
“(d) if there was or is a finance scheme in relation to the research and development activities—the finance scheme is not an ineligible finance scheme;”.
Internal review of decisions
103. Section 39S of the Principal Act is amended by inserting after subsection (1) the following subsection:
“(1A) This section also applies to a decision of the Board under the finance scheme guidelines.”.
Review of decisions by Administrative Appeals Tribunal
104. Section 39T of the Principal Act is amended by inserting in paragraph (1)(b) “or 39MA” after “39M”.
Statements to accompany notification of decisions
105. Section 39U of the Principal Act is amended by inserting in subsection (3) “or 39MA” after “39M”.
Application
[Definitions]
106.(1) In this section:
“advance eligibility ruling”, in relation to an application for the registration of a company or companies, means a statement issued by the Board to the effect that the Board is of the opinion that particular activities carried on, or proposed to be carried on, by or on behalf of the company or companies are research and development activities, where the statement is issued in connection with a proposal to make such an application;
“amended Act” means the Principal Act as amended by this Act;
“interim period” means the period:
(a) commencing on 31 March 1992; and
(b) ending at the end of 10 June 1992.
[Section 39MA]
(2) Section 39MA of the amended Act applies to expenditure incurred by a company registered under section 39J or 39P of the Industry Research and Development Act 1986, whether the registration was granted before, or is granted after, the commencement of this section, unless:
(a) the registration was granted before the end of the interim period; or
(b) the application for the registration was made during the interim period; or
(c) an advance eligibility ruling in relation to the application for the registration was issued by the Board during the interim period; or
(d) an application was made during the interim period for an advance eligibility ruling in relation to the application for the registration.
[Paragraph 39P(3)(d)]
(3) Paragraph 39P(3)(d) of the amended Act applies to an application (the “section 39P application”) made under subsection 39P(1) of the Industry Research and Development Act 1986, whether the application was made before, or is made after, the commencement of this section, unless:
(a) the section 39P application was granted before the end of the interim period; or
(b) the section 39P application was made during the interim period; or
(c) an advance eligibility ruling in relation to the section 39P application was issued by the Board during the interim period; or
(d) an application was made during the interim period for an advance eligibility ruling in relation to the section 39P application.
Division 3—Amendments relating to registration of companies under section 39P of the Principal Act
Joint registration
107. Section 39P of the Principal Act is amended:
(a) by inserting in subsection (3) “, in relation to the project, or in relation to a particular one or more of those projects,” after “opinion”;
(b) by adding at the end of subsection (3) “in relation to that project or in relation to that particular one or more of those projects, as the case requires”;
(c) by inserting in subsection (3A) “in relation to the project or projects specified in the application” after “jointly”.
Application
108. The amendments made by this Division apply to applications made under subsection 39P(1) of the Principal Act after 15 October 1992.
Division 4—Amendments relating to the Register of Commercial Government Bodies
Interpretation
109. Section 39A of the Principal Act is amended by inserting in subsection (1) the following definitions:
“ ‘commercial government bodies guidelines’ means guidelines made under section 39HB;
‘eligible government body’ means:
(a) a government body within the meaning of section 73CB of the Income Tax Assessment Act 1936; or
(b) an associate (within the meaning of that section) of such a government body;
‘Register of Commercial Government Bodies’ means the Register of Commercial Government Bodies required by section 39HA;”.
110. After section 39H of the Principal Act the following sections are inserted:
Register of Commercial Government Bodies
[Register to be kept by Board]
“39HA.(1) The Board must keep a register, to be known as the Register of Commercial Government Bodies, listing such eligible government bodies as are required to be on the register because of this Part.
[Register to be open for inspection]
“(2) The Board must cause the Register of Commercial Government Bodies to be made available for inspection at any reasonable time by any person on request.
Commercial government bodies guidelines
[Board to make guidelines setting out criteria for entry on Register]
“39HB.(1) The Board must, as soon as practicable (and, in any event, within 90 days) after the commencement of this section, formulate written guidelines (‘commercial government bodies guidelines’) setting out criteria to be met by eligible government bodies wishing to be entered on the Register of Commercial Government Bodies.
[Guidelines to be published etc.]
“(2) The Board must cause the commercial government bodies guidelines to be:
(a) published in the Gazette; and
(b) made available, without charge, to any interested person.
[Matters to be taken into account in making guidelines]
“(3) In making commercial government bodies guidelines about a particular kind of eligible government body, the matters to which the Board is to have regard include, but are not limited to:
(a) the commercial environment in which the eligible government body operates; and
(b) whether there is a framework for the oversight of the operations, and the monitoring of the performance, of the eligible government body and, if so, the nature of that framework; and
(c) the extent to which the eligible government body is:
(i) bound by regulatory laws of the Commonwealth, the States and the Territories; and
(ii) subject to taxation and charges under the laws of the Commonwealth, the States and the Territories; and
(d) the extent of private sector equity investment (whether direct or indirect through one or more interposed companies, partnerships or trusts) in the eligible government body; and
(e) if the eligible government body is established by or under a law of the Commonwealth, a State or a Territory—the policies of the Commonwealth, the State or the Territory, as the case requires, regarding the issue of the extent to which the eligible government body should be treated as a fully commercial entity.
[Tax-exempt bodies ineligible for entry on Register]
“(4) The commercial government bodies guidelines must set out a criterion to the effect that an eligible government body will not be entered on the Register of Commercial Government Bodies with effect on a particular day if, assuming that the body had derived income on that day, that income would have been exempt from income tax because of a relevant exempting provision (within the meaning of section 160K of the Income Tax Assessment Act 1936).
[Guidelines to be disallowable]
“(5) An instrument formulating commercial government bodies guidelines is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901.
Applications for entry on the Register of Commercial Government Bodies
“39HC.(1) An eligible government body may apply to the Board to be entered on the Register of Commercial Government Bodies.
“(2) The application must be:
(a) in writing; and
(b) in a form approved by the Board; and
(c) accompanied by such information as the Board requires.
Board’s decision on application for entry on Register of Commercial Government Bodies
[Board’s decision on application]
“39HD.(1) After considering an application under section 39HC, the Board must decide to:
(a) grant the application; or
(b) refuse the application.
[Board deemed to have refused application if no decision made within 90 days]
“(2) If the Board has not made a decision under subsection (1) before whichever time (‘eligible time’) is the later of the following times:
(a) the end of the period (‘original 90-day period’) of 90 days after the day on which the application was received by the Board;
(b) if the Board, by written notice given to the applicant within the original 90-day period, requests the applicant to give further
information about the application—the end of the period of 90 days after the Board receives the further information;
then, at the eligible time, the Board is taken to have made a decision under subsection (1) to refuse the application.
[Notice of decision]
“(3) If the Board makes a decision under subsection (1) before the eligible time, the Board must give written notice of the decision to the applicant.
[Reasons for refusal to be given]
“(4) A notice under subsection (3) relating to a refusal must set out the reasons for the refusal.
[When entry takes effect]
“(5) If the Board decides to grant the application, the entry of the eligible government body takes effect on:
(a) the day on which the decision is made; or
(b) if the applicant requests—such earlier date as the Board specifies.
[Entry may take effect on a date earlier than commencement of this section]
“(6) The Board may specify a date under paragraph (5)(b) that is earlier than the commencement of this section.
[Back-dated entries—Register taken to have been in existence]
“(7) If the Board specifies such an earlier date, this Part and section 73CB of the Income Tax Assessment Act 1936 have effect as if the Register of Commercial Government Bodies had been in existence on that date.
Grant of application for entry on Register of Commercial Government Bodies
“39HE. The Board must not grant an application under section 39HC unless the Board is satisfied that the applicant meets the criteria set out in the commercial government bodies guidelines.
Removal from Register of Commercial Government Bodies
[Removal of body which does not meet criteria set out in guidelines]
“39HF.(1) The Board must remove an eligible government body from the Register of Commercial Government Bodies if the Board is satisfied that the body does not meet the criteria set out in the commercial government bodies guidelines.
[Notification of proposed removal]
“(2) The Board must not remove an eligible government body from the Register of Commercial Government Bodies unless the Board has:
(a) given a written notice to the body:
(i) stating that the Board is considering removing the body from the Register of Commercial Government Bodies; and
(ii) giving the reasons for considering the removal of the body; and
(b) invited the body to make a written submission to the Board:
(i) within 60 days of receiving the notice; and (ii) about the proposed removal; and
(c) if such a submission is made within that period—had regard to the matters raised in the submission.
[When removal takes effect]
“(3) If the Board decides to remove the body from the Register of Commercial Government Bodies, the removal takes effect on the day on which the notice mentioned in paragraph (2)(a) was given to the body.
[Notification of removal]
“(4) If the Board decides to remove the body from the Register of Commercial Government Bodies, the Board must give written notice of the removal to the body.”.
Review of decisions by Administrative Appeals Tribunal
111. Section 39T of the Principal Act is amended by inserting in paragraph (1)(b) “39HD, 39HF,” before “39M”.
Statements to accompany notification of decisions
112. Section 39U of the Principal Act is amended by inserting in subsection (3) “39HD, 39HF,” before “39M”.
PART 5—AMENDMENT OF THE PETROLEUM RESOURCE RENT TAX ASSESSMENT ACT 1987
Principal Act
113. In this Part, “Principal Act” means the Petroleum Resource Rent Tax Assessment Act 19874.
Transfer of entire entitlement to assessable receipts
114. Section 48 of the Principal Act is amended:
(a) by inserting in subparagraph (a)(i) “(other than class 2 augmented bond rate exploration expenditure or class 2 GDP factor expenditure)” after “deductible expenditure” (first . occurring);
(b) by inserting in subparagraph (a)(i) “such” before “deductible expenditure” (second occurring);
(c) by inserting after subparagraph (a)(i) the following subparagraph and Note:
“(ia) to have incurred, in relation to the project, any expenditure that, if the financial year in which the transaction is or was entered into had ended immediately before the transfer time, would, within the meaning of the Schedule, have been included in the incurred exploration expenditure amount in relation to the vendor, the project and the financial year or a previous financial year; and
Note: this is expenditure on which class 2 augmented bond rate exploration expenditure and class 2 GDP factor expenditure are based.”;
(d) by adding at the end the following subsection:
“(2) Expenditure that the purchaser, or a purchaser, is taken to have incurred by subparagraph (1)(a)(ia) is taken to have been so incurred at the time when the vendor incurred it, or is taken to have incurred it.”.
Defined terms
115. Clause 1 of the Schedule to the Principal Act is amended:
(a) by omitting “exploration expenditure that the person is taken by section 48” from subparagraphs (a)(ii) and (b)(ii) of the definition of “incurred exploration expenditure amount” and substituting “expenditure that the person is taken by subparagraph 48(1)(a)(ia)”;
(b) by inserting the following definition:
“ ‘finishing day’ means:
(a) in relation to a petroleum project—the first day on which there is no longer in force any production licence in relation to the project; or
(b) in relation to an exploration permit or retention lease—the day on which the permit or lease ceases to be in force;”.
Matters dealt with in this Part
116. Clause 6 of the Schedule to the Principal Act is amended by adding at the end the following subclause:
“(2) For the avoidance of doubt, the assessable year may be a financial year starting after the finishing day in relation to the petroleum project.”.
Matters dealt with in this Part
117. Clause 10 of the Schedule to the Principal Act is amended by adding at the end the following subclause:
“(2) For the avoidance of doubt, the assessable year may be a financial year starting after the finishing day in relation to the petroleum project.”.
Matters dealt with in this Part
118. Clause 13 of the Schedule to the Principal Act is amended by inserting after subclause (1) the following subclause:
“(1A) For the avoidance of doubt, the assessable year may, subject to subclause (2), be a financial year starting after the finishing day in relation to the exploration permit or retention lease.”.
Rule—person must have held interests in relation to transferring entity and receiving project
119. Clause 22 of the Schedule to the Principal Act is amended:
(a) by inserting in subclause (1) “(2A),” after “(2),”;
(b) by inserting after subclause (2) the following subclause:
“(2A) Subclause (1) does not require the person to have held an interest in relation to the transferring entity at a time after the finishing day in relation to the transferring entity.”.
Rule—loss company and profit company to have held interests and been group companies
120. Clause 31 of the Schedule to the Principal Act is amended:
(a) by inserting in subclause (1) “(2A),” after “(2),”;
(b) by inserting after subclause (2) the following subclause:
“(2A) Subclause (1) does not require the loss company to have held an interest in relation to the transferring entity at a time after the finishing day in relation to the transferring entity.”.
PART 6—AMENDMENT OF THE TAXATION ADMINISTRATION ACT 1953
Division 1—Principal Act
Principal Act
121. In this Part, “Principal Act” means the Taxation Administration Act 19535.
Division 2—Amendment relating to methods of payment of tax liabilities etc.
122. After section 16 of the Principal Act the following section is inserted:
Regulations may provide for methods of payment of tax liabilities etc.
“16A.(1) This section applies to a liability to or of the Commonwealth arising under, or by virtue of, any of the following laws:
(a) this Act;
(b) any other Act of which the Commissioner has the general administration;
(c) regulations under an Act covered by paragraph (a) or (b).
“(2) The regulations may make provision for and in relation to the methods by which the amount of the liability may be paid.
“(3) Without limiting subsection (2), the regulations may make provision for and in relation to the making of payments using:
(a) collection agents; or
(b) electronic funds transfer systems; or
(c) credit cards; or
(d) debit cards.”.
Division 3—Amendments relating to taxation offences
123. After section 8H of the Principal Act the following section is inserted:
Court may order payment of amount in addition to penalty
“8HA.(1) If:
(a) a person (the ‘convicted person’) is convicted before a court of an offence against section 8C, 8D or 8H in relation to a refusal or failure to do a particular thing; and
(b) the court is satisfied that the purpose of, or one of the purposes of, the refusal or failure was to facilitate the avoidance of an amount of a tax liability of the convicted person or another person;
the court may, in addition to imposing a penalty on the convicted person, order the convicted person to pay to the Commissioner an amount not exceeding:
(c) if the offence is an offence to which subsection 8E(2) or (3) applies—3 times that amount; or
(d) in any other case—2 times that amount.
“(2) A reference in this section to a conviction of a person for an offence includes a reference to the making of an order under section 19B of the Crimes Act 1914 in relation to the person in respect of the offence.”.
Court may order payment of amount in addition to penalty
124. Section 8W of the Principal Act is amended by adding at the end the following subsection:
“(3) A reference in this section to a conviction of a person for an offence includes a reference to the making of an order under section 19B of the Crimes Act 1914 in relation to the person in respect of the offence.”.
Prosecution of taxation offences
125. Section 8ZA of the Principal Act is amended by adding at the end the following subsections:
“(5) In spite of anything in the preceding provisions of this section, if:
(a) a person is convicted of 2 or more offences against section 8T or 8U, or both, before the same court at the same sitting; and
(b) assuming that the person had only been convicted of one of those offences, that offence would have been punishable on summary conviction;
all those offences are punishable on summary conviction.
“(6) A reference in subsection (5) to a conviction of a person for an offence includes a reference to the making of an order under section 19B of the Crimes Act 1914 in relation to the person in respect of the offence.
“(7) A reference in subsection (5) to an offence against section 8T or 8U includes a reference to an offence against section 7 of the Crimes Act 1914 that relates to an offence against section 8T or 8U, as the case may be.”.
Prosecution may be commenced at any time
126. Section 8ZB of the Principal Act is amended by omitting from subsection (2) “21” and substituting “15B”.
PART 7—AMENDMENT OF THE SALES TAX ASSESSMENT ACT (NO. 5) 1930
Principal Act
127. In this Part, “Principal Act” means the Sales Tax Assessment Act (No. 5) 1930.
Interpretation
128. Section 2A of the Principal Act is amended by adding at the end the following subsection:
“(3) For the purposes of the application of this Act at any time after the commencement of any of the provisions (‘the amending provisions’) to which subsection 2(3) of the Customs and Excise Legislation Amendment Act 1992 applies, this Act has effect as if references to provisions of, or things happening under, the Customs Act were references to corresponding provisions of, or corresponding things happening under, the Customs Act as amended by the amending provisions.”.
PART 8—AMENDMENT OF THE SALES TAX (EXEMPTIONS AND CLASSIFICATIONS) ACT 1935
Principal Act
129. In this Part, “Principal Act” means the Sales Tax (Exemptions and Classifications) Act 1935.
First Schedule
130. The First Schedule to the Principal Act is amended by inserting in items 70A and 80 “, or delivery into,” before “home consumption”.
PART 9—AMENDMENT OF THE SALES TAX ASSESSMENT ACT 1992
Principal Act
131. In this Part, “Principal Act” means the Sales Tax Assessment Act 1992.
Schedule 1
132. Schedule 1 to the Principal Act is amended by omitting LE1, LE2, LE3 and LE4 from Table 2 and substituting the following:
“ | LE1 | the goods are taken to have been entered for home consumption under subsection 71A(6) of the Customs Act | owner (within the meaning of the Customs Act) of the goods | when the goods are taken to have been entered for home consumption | |
| LE2 | the goods are taken to have been entered for home consumption under subsection 71A(7) of the Customs Act | owner (within the meaning of the Customs Act) of the goods | when the goods are taken to have been entered for home consumption | |
| LE3 | the goods are delivered into home consumption under section 69 of the Customs Act | person to whom permission to deliver the goods was granted under section 69 of the Customs Act | when the goods are delivered into home consumption | |
| LE4 | the goods are delivered into home consumption under section 70 of the Customs Act | person to whom permission to deliver the goods was granted under section 70 of the Customs Act | when the goods are delivered into home consumption | |
| LE4A | the goods are delivered into home consumption under section 71 of the Customs Act | person authorised under section 71 of the Customs Act to deliver the goods | when the goods are delivered into home consumption | ” |
PART 10—AMENDMENT OF THE SALES TAX (EXEMPTIONS AND CLASSIFICATIONS) ACT 1992
Principal Act
133. In this Part, “Principal Act” means the Sales Tax (Exemptions and Classifications) Act 1992.
Schedule 1
134. Schedule 1 to the Principal Act is amended:
(a) by inserting after Item 161 of the Table of Contents the following Item:
“161A. Livestock food”;
(b) by inserting in Items 119 and 145 “, or delivery into,” before “home consumption”;
(c) by inserting after Item 161 the following Item:
“Item 161A: [Livestock food]
Goods of a kind ordinarily used as food for livestock.”.
NOTES
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; and Nos. 3, 35, 70, 80, 81, 92, 98 and 101, 1992.
NOTES—continued
2. No. 82, 1953, as amended. For previous amendments, see No. 25, 1958; No. 88, 1959; Nos. 19 and 29, 1960; No. 71, 1963; No. 112, 1964; No. 105, 1965; No. 17, 1966; Nos. 39 and 86, 1967; No. 3, 1968; No. 24, 1969; No. 48, 1972; Nos. 11 and 216, 1973; No. 129, 1974; No. 119, 1975; Nos. 52, 55 and 143, 1976; No. 134, 1977; No. 87, 1978; Nos. 23 and 127, 1980; Nos. 28, 110, 143 and 154, 1981; Nos. 51 and 57, 1983; Nos. 123 and 125, 1984; Nos. 168 and 173, 1985; Nos. 49, 51 and 112, 1986; No. 165, 1989; No. 121, 1990; Nos. 5, 96 and 214, 1991; and No. 35, 1992.
3. No. 89, 1986, as amended. For previous amendments, see No. 59, 1988; No. 167, 1989; No. 35, 1990; and No. 66, 1991.
4. No. 142, 1987, as amended. For previous amendments, see No. 97, 1988; No. 60, 1990; Nos. 80 and 216, 1991; and Nos. 92 and 118, 1992.
5. No. 1, 1953, as amended. For previous amendments, see Nos. 28, 39, 40 and 52, 1953; No. 18, 1955; No. 39, 1957; No. 95, 1959; No. 17, 1960; No. 75, 1964; No. 155, 1965; No. 93, 1966; No. 120, 1968; No. 216, 1973; No. 133, 1974; No. 37, 1976; Nos. 19 and 59, 1979; Nos. 39 and 117, 1983; No. 123, 1984; No. 65, 1985 (as amended by No. 193, 1985); Nos. 4, 47, 104, 123 and 168, 1985; Nos. 41, 46, 48, 112, 144 and 154, 1986; No. 49, 1986 (as amended by No. 141, 1987); Nos. 120 and 145, 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); Nos. 95 and 97, 1988; Nos. 97, 105, 107, 124, 163 and 167, 1989; Nos. 20, 60, 61, 110, 119 and 136, 1990; Nos. 5, 6, 48, 100, 122 and 216, 1991; and Nos. 47, 92, 98 and 101, 1992.
[Minister’s second reading speech made in—
House of Representatives on 15 October 1992
Senate on 9 November 1992]
