Commonwealth: Tax Laws Amendment (Transfer of Provisions) Act 2010 (Cth)

Tax Laws Amendment (Transfer of Provisions) Act 2010 Act No. 79 of 2010 as amended This compilation was prepared on 29 July 2011 taking into account amendments up to Act No. 41 of 2011 The text of any of those amendments not in force on that date is appended in the Notes section The operation of amendments that have been incorporated may be affected by application provisions that are set out in the Notes section Prepared by the Office of Legislative Drafting and Publishing, Attorney‑General's Department, Canberra Contents 1 Short title [see Note 1] 2 Commencement 3 Schedule(s) Schedule 1—Collection and recovery of tax Part 1—Main amendments Income Tax Assessment Act 1936 Income Tax Assessment Act 1997 Taxation Administration Act 1953 Part 2—Consequential amendments Administrative Decisions (Judicial Review) Act 1977 Corporations Act 2001 Higher Education Support Act 2003 Income Tax Assessment Act 1936 Income Tax Assessment Act 1997 Income Tax (Transitional Provisions) Act 1997 Social Security Act 1991 Student Assistance Act 1973 Taxation Administration Act 1953 Part 3—Application, transitional and saving provisions Division 1—Preliminary Division 2—Division 5 of the Income Tax Assessment Act 1997 Income Tax (Transitional Provisions) Act 1997 Division 3—Security deposits Division 4—Estimates Division 5—Directors' obligations Division 6—Provisions relating to former provisions of the Income Tax Assessment Act 1936 Schedule 2—Forgiveness of commercial debts Part 1—Main amendments Income Tax Assessment Act 1936 Income Tax Assessment Act 1997 Income Tax (Transitional Provisions) Act 1997 Part 2—Consequential amendments Income Tax Assessment Act 1936 Income Tax Assessment Act 1997 Schedule 3—Leases of luxury cars Part 1—Main amendments Income Tax Assessment Act 1936 Income Tax Assessment Act 1997 Part 2—Consequential amendments Income Tax Assessment Act 1997 Part 3—Application and transitional provisions Income Tax (Transitional Provisions) Act 1997 Schedule 4—Farm management deposits Part 1—Main amendments Income Tax Assessment Act 1936 Income Tax Assessment Act 1997 Taxation Administration Act 1953 Part 2—Consequential amendments Farm Household Support Act 1992 Income Tax Assessment Act 1936 Income Tax Assessment Act 1997 Taxation Administration Act 1953 Part 3—Application and transitional provisions Income Tax (Transitional Provisions) Act 1997 Schedule 5—General insurance Part 1—Main amendments Income Tax Assessment Act 1936 Income Tax Assessment Act 1997 Part 2—Consequential amendments Income Tax Assessment Act 1936 Income Tax Assessment Act 1997 Notes An Act to amend the law relating to taxation, and for related purposes 1 Short title [see Note 1] This Act may be cited as the Tax Laws Amendment (Transfer of Provisions) Act 2010. 2 Commencement (1) Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms. Commencement information Column 1 Column 2 Column 3 Provision(s) Commencement Date/Details 1. Sections 1 to 3 and anything in this Act not elsewhere covered by this table The day this Act receives the Royal Assent. 29 June 2010 2. Schedule 1 1 July 2010. 1 July 2010 3. Schedule 2 Immediately after the commencement of the provision(s) covered by table item 4. 1 July 2010 4. Schedules 3 to 5 1 July 2010. 1 July 2010 Note: This table relates only to the provisions of this Act as originally passed by both Houses of the Parliament and assented to. It will not be expanded to deal with provisions inserted in this Act after assent. (2) Column 3 of the table contains additional information that is not part of this Act. Information in this column may be added to or edited in any published version of this Act. 3 Schedule(s) Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms. Schedule 1—Collection and recovery of tax Part 1—Main amendments Income Tax Assessment Act 1936 1 After section 169 Insert: 169AA Consolidated assessments (1) This section applies if 2 or more persons (the recipients) are in receipt of income, or of profits or gains of a capital nature, for or on behalf of: (a) a non‑resident; or (b) a person absent from Australia. (2) The Commissioner may, if it appears to him or her to be expedient to do so: (a) consolidate all or any of the assessments of the income, profits or gains; and (b) declare one of the recipients to be the agent of the non‑resident or absent person in respect of the consolidated assessment; and (c) require the agent to pay income tax on the amount assessed. (3) If the Commissioner does so, the agent is liable to pay the tax. 2 Part VI Repeal the Part. Income Tax Assessment Act 1997 3 After Division 4 Insert: Division 5—How to work out when to pay your income tax Table of Subdivisions Guide to Division 5 5‑A How to work out when to pay your income tax Guide to Division 5 5‑1 What this Division is about If your assessed income tax liability exceeds the credits available to you under the PAYG system, this Division explains when you must pay the excess to the Commissioner. If your assessment is amended so that you must pay income tax, or pay more income tax than under the previous assessment, this Division explains: (a) when you must pay the additional tax; and (b) when any associated interest charges must be paid. Note: For provisions about the collection and recovery of income tax and other tax‑related liabilities, see Part 4‑15 in Schedule 1 to the Taxation Administration Act 1953. Subdivision 5‑A—How to work out when to pay your income tax Table of sections 5‑5 When income tax is payable 5‑10 When shortfall interest charge is payable 5‑15 General interest charge payable on unpaid income tax or shortfall interest charge 5‑5 When income tax is payable Scope (1) This section tells you when income tax you must pay for a *financial year is due and payable. Note: The Commissioner may defer the time at which the income tax is due and payable: see section 255‑10 in Schedule 1 to the Taxation Administration Act 1953. (2) The income tax is only due and payable if the Commissioner makes an *assessment of your income tax for the year. (3) However, if the Commissioner does make an *assessment of your income tax for the year, the tax may be taken to have been due and payable at a time before your assessment was made. Note: This is to ensure that general interest charge begins to accrue from the same date for all like entities. General interest charge on unpaid income tax is calculated from when the tax is due and payable, not from when the assessment is made: see section 5‑15. Original assessments—self‑assessment entities (4) If you are a *self‑assessment entity, the income tax is due and payable on the first day of the sixth month after the end of the income year. Example: If your income year is the same as the financial year, your income tax would be due and payable on 1 December. Original assessments—other entities (5) If you are not a *self‑assessment entity, the income tax is due and payable 21 days after the day (the return day) on or before which you are required to lodge your *income tax return with the Commissioner. Note: For rules about income tax returns and when they are due, see Part IV of the Income Tax Assessment Act 1936. (6) However, if you lodge your return on or before the return day and the Commissioner gives you a notice of *assessment (other than an amended assessment) after the return day, the income tax is due and payable 21 days after the Commissioner gives you the notice. Amended assessments (7) If the Commissioner amends your *assessment, any extra income tax resulting from the amendment is due and payable 21 days after the day on which the Commissioner gives you notice of the amended assessment. Note: Shortfall interest charge may be payable, on any amount of extra income tax payable as a result of the amended assessment, for each day in the period that: (a) starts at the time income tax was due and payable on your original assessment; and (b) ends the day before the day on which the Commissioner gives you notice of the amended assessment. 5‑10 When shortfall interest charge is payable An amount of *shortfall interest charge that you are liable to pay is due and payable 21 days after the day on which the Commissioner gives you notice of the charge. Note: Shortfall interest charge is imposed if the Commissioner amends an assessment and the amended assessment results in an increase in some tax payable. For provisions about liability for shortfall interest charge, see Division 280 in Schedule 1 to the Taxation Administration Act 1953. 5‑15 General interest charge payable on unpaid income tax or shortfall interest charge If an amount of income tax or *shortfall interest charge that you are liable to pay remains unpaid after the time by which it is due to be paid, you are liable to pay the *general interest charge on the unpaid amount for each day in the period that: (a) starts at the beginning of the day on which the amount was due to be paid; and (b) finishes at the end of the last day on which, at the end of the day, any of the following remains unpaid: (i) the income tax or shortfall interest charge; (ii) general interest charge on any of the income tax or shortfall interest charge. Note 1: The general interest charge is worked out under Part IIA of the Taxation Administration Act 1953. Note 2: Shortfall interest charge is worked out under Division 280 in Schedule 1 to that Act. 4 Subsection 995‑1(1) Insert: self‑assessment entity means a full self‑assessment taxpayer (within the meaning of subsection 6(1) of the Income Tax Assessment Act 1936). 5 Subsection 995‑1(1) Insert: statutory demand has the same meaning as in the Corporations Act 2001. Taxation Administration Act 1953 6 Before subsection 255‑10(1) in Schedule 1 Insert: Deferrals for particular taxpayers 7 After subsection 255‑10(2) in Schedule 1 Insert: Deferrals for classes of taxpayers (2A) The Commissioner, having regard to the circumstances of the case, may, by notice published on the Australian Taxation Office website, defer the time at which amounts of *tax‑related liabilities are, or would become, due and payable by a class of taxpayers (whether or not the liabilities have already arisen). (2B) If the Commissioner does so, that time is varied accordingly. Note: General interest charge and any other relevant penalties, if applicable for any unpaid amounts of the liabilities, will begin to accrue from the time as varied. See, for example, paragraph 5‑15(a) of the Income Tax Assessment Act 1997. (2C) A notice published under subsection (2A) is not a legislative instrument. Deferral does not affect time for giving form 8 Subsection 255‑10(3) in Schedule 1 Omit "subsection (1)", substitute "this section". 9 At the end of Division 255 in Schedule 1 Add: Subdivision 255‑D—Security deposits Table of sections 255‑100 Commissioner may require security deposit 255‑105 Notice of requirement to give security 255‑110 Offence 255‑100 Commissioner may require security deposit (1) The Commissioner may require you to give security for the due payment of an existing or future *tax‑related liability of yours if: (a) the Commissioner has reason to believe that: (i) you are establishing or *carrying on an *enterprise in Australia; and (ii) you intend to carry on that enterprise for a limited time only; or (b) the Commissioner reasonably believes that the requirement is otherwise appropriate, having regard to all relevant circumstances. Note: A requirement to give security under this section is not a tax‑related liability. As such, the collection and recovery provisions in this Part do not apply to it. (2) The Commissioner may require you to give the security: (a) by way of a bond or deposit (including by way of payments in instalments); or (b) by any other means that the Commissioner reasonably believes is appropriate. (3) The Commissioner may require you to give security under this section: (a) at any time the Commissioner reasonably believes is appropriate; and (b) as often as the Commissioner reasonably believes is appropriate. Example: The Commissioner may require additional security if he or she reasonably believes that the original security requirement underestimated the amount of the likely tax‑related liability. 255‑105 Notice of requirement to give security Commissioner must give notice of requirement to give security (1) If the Commissioner requires you to give security under section 255‑100, he or she must give you written notice of the requirement. Content of notice (2) The notice must: (a) state that you are required to give the security to the Commissioner; and (b) explain why the Commissioner requires the security; and (c) set out the amount of the security; and (d) describe the means by which you are required to give the security under subsection 255‑100(2); and (e) specify the time by which you are required to give the security; and (f) explain how you may have the Commissioner's decision to require you to give the security reviewed. (3) To avoid doubt, a single notice may relate to security for the payment of 2 or more existing or future *tax‑related liabilities, but must comply with subsection (2) in relation to each of them. When notice is given (4) Despite section 29 of the Acts Interpretation Act 1901, a notice under subsection (1) is taken to be given at the time the Commissioner leaves or posts it. Note: Section 28A of the Acts Interpretation Act 1901 may be relevant to giving a notice under subsection (1). Miscellaneous (5) A failure to comply with this section does not affect the validity of the requirement to give the security under section 255‑100. 255‑110 Offence You commit an offence if: (a) the Commissioner requires you to give security under section 255‑100; and (b) you fail to give that security as required. Penalty: 100 penalty units. 10 At the end of Part 4‑15 in Schedule 1 Add: Division 268—Estimates and recovery of PAYG withholding liabilities Table of Subdivisions Guide to Division 268 268‑A Object 268‑B Making estimates 268‑C Liability to pay estimates 268‑D Reducing and revoking estimates 268‑E Late payment of estimates 268‑F Miscellaneous Guide to Division 268 268‑1 What this Division is about This Division enables the Commissioner to make an estimate of amounts not paid as required by Part 2‑5 (Pay as you go (PAYG) withholding), and to recover the amount of the estimate. If you are given an estimate, you are liable to pay the amount of the estimate. That liability is distinct from your liability to pay the amounts required by Part 2‑5. However, you can ensure that the Commissioner does not require you to pay more than the amounts not paid under that Part. Other Divisions of this Part provide for the recovery of amounts payable under this Division. Subdivision 268‑A—Object Table of sections 268‑5 Object of Division 268‑5 Object of Division The object of this Division is to enable the Commissioner to take prompt and effective action to recover amounts not paid as required by Part 2‑5 (Pay as you go (PAYG) withholding). Subdivision 268‑B—Making estimates Table of sections 268‑10 Commissioner may make estimate 268‑15 Notice of estimate 268‑10 Commissioner may make estimate Estimate (1) The Commissioner may estimate the unpaid and overdue amount of a liability (the underlying liability) of yours under section 16‑70. Note: Section 16‑70 requires you to pay to the Commissioner amounts you have withheld under the Pay as you go withholding rules. Amount of estimate (2) The amount of the estimate must be what the Commissioner thinks is reasonable. (3) In making the estimate, the Commissioner may have regard to anything he or she thinks relevant. Example: The Commissioner may have regard to information about amounts you withheld under the Pay as you go rules before the period in relation to which the underlying liability arose. Only one estimate for each liability (4) While the estimate is in force, the Commissioner cannot make another estimate relating to the underlying liability. (5) For the purposes of subsection (4), the estimate is in force if: (a) the Commissioner has given you notice of the estimate; and (b) the estimate has not been revoked; and (c) your liability to pay the estimate has not been discharged. 268‑15 Notice of estimate Commissioner must give notice of estimate (1) The Commissioner must give you written notice of the estimate. Content of notice (2) The notice must: (a) identify the underlying liability; and (b) specify the date of the estimate; and (c) set out the amount of the estimate; and (d) state that the amount of the estimate is due and payable; and (e) explain how you may have the amount of the estimate reduced or the estimate revoked. (3) To avoid doubt, a single notice may relate to 2 or more estimates, but must comply with subsection (2) in relation to each of them. When notice is given (4) Despite section 29 of the Acts Interpretation Act 1901, a notice under subsection (1) is taken to be given at the time the Commissioner leaves or posts it. Note: Section 28A of the Acts Interpretation Act 1901 may be relevant to giving a notice under subsection (1). Subdivision 268‑C—Liability to pay estimates Table of sections 268‑20 Nature of liability to pay estimate 268‑25 Accuracy of estimate irrelevant to liability to pay 268‑30 Estimate provable in bankruptcy or winding up 268‑20 Nature of liability to pay estimate Liability to pay amount of estimate (1) You must pay to the Commissioner the amount of the estimate if the Commissioner gives you notice of the estimate in accordance with section 268‑15. The amount is due and payable when the Commissioner gives you the notice. Note: The amount of the estimate may be reduced, or the estimate revoked, under Subdivision 268‑D. Liability to pay amount of estimate is distinct from underlying liability (2) Your liability to pay the amount of the estimate is separate and distinct from the underlying liability. It is separate and distinct for all purposes. Example: The Commissioner may take: (a) proceedings to recover the unpaid amount of the estimate; or (b) proceedings to recover the unpaid amount of the underlying liability; or (c) proceedings of both kinds. Discharging one liability discharges other liabilities (3) Despite subsection (2), if, at a particular time, one of the liabilities to which this subsection applies is discharged, to the extent of an amount, for either of the following reasons, each of the other liabilities to which this subsection applies is discharged to the extent of the same amount: (a) an amount is paid or applied towards discharging the liability; (b) the liability is discharged because of section 269‑40 (Effect of director paying penalty or company discharging liability). (4) Subsection (3) applies to whichever of the following liabilities are in existence at the particular time: (a) your liability to pay the amount of the estimate; (b) the underlying liability; (c) a liability of yours under a judgment, to the extent that it is based on a liability referred to in paragraph (a) or (b). (5) Subsection (3) does not discharge a liability to a greater extent than the amount of the liability. 268‑25 Accuracy of estimate irrelevant to liability to pay You are liable to pay the unpaid amount of the estimate even if: (a) the underlying liability never existed or has been discharged in full; or (b) the unpaid amount of the underlying liability is less than the unpaid amount of the estimate. Note 1: Section 268‑40 revokes the estimate if you give the Commissioner a statutory declaration, or file an affidavit, to the effect that the underlying liability never existed. Note 2: Subdivision 268‑D provides ways in which you can challenge the estimate or its amount. 268‑30 Estimate provable in bankruptcy or winding up (1) Your liability (the estimate liability) to pay the unpaid amount of the estimate is provable in a bankruptcy or winding up, even if the estimate was made after: (a) the date of the bankruptcy; or (b) the relevant date (within the meaning of the Corporations Act 2001). (2) However, the estimate liability is provable only to the extent that the underlying liability would be provable if the unpaid amount of the underlying liability were the same as the unpaid amount of the estimate. Example: Subsection (2) prevents proof of the estimate liability if the underlying liability could not be proved because, for example, of when it arose. (3) Subsections (1) and (2) do not apply if: (a) the underlying liability has already been admitted to proof; and (b) the proof has not been set aside. (4) If the estimate liability has been admitted to proof at a particular amount, the underlying liability is provable only to the extent the unpaid amount of the underlying liability exceeds that particular amount. (5) To the extent that a liability is provable because of this section, it is taken, for the purposes of the Bankruptcy Act 1966, to be provable in bankruptcy under that Act. Subdivision 268‑D—Reducing and revoking estimates Table of sections 268‑35 How estimate may be reduced or revoked—Commissioner's powers 268‑40 How estimate may be reduced or revoked—statutory declaration or affidavit 268‑45 How estimate may be reduced or revoked—rejection of proof of debt 268‑50 How estimate may be reduced—amount paid or applied 268‑55 When reduction or revocation takes effect 268‑60 Consequences of reduction or revocation—refund 268‑65 Consequences of reduction or revocation—statutory demand changed or set aside 268‑70 Consequences of reduction or revocation—underlying liability 268‑35 How estimate may be reduced or revoked—Commissioner's powers Reduction (1) The Commissioner may at any time reduce the amount of the estimate, but is not obliged to consider whether or not to do so. (2) If the Commissioner reduces the amount of the estimate under subsection (1), he or she must give you a written notice that: (a) identifies the underlying liability; and (b) sets out the reduced amount of the estimate. Note: The estimate is taken always to have had effect as reduced: see section 268‑55. Revocation (3) The Commissioner may at any time revoke the estimate, but is not obliged to consider whether or not to do so. (4) If the Commissioner revokes the estimate under subsection (3), he or she must give you a written notice that: (a) identifies the underlying liability; and (b) states that the estimate has been revoked. Note: The estimate is taken never to have been made: see section 268‑55. Matters for Commissioner to consider (5) In exercising his or her power under this section to reduce the amount of the estimate, or to revoke the estimate, the Commissioner must have regard to: (a) the following principles: (i) the estimate is of the unpaid amount of the underlying liability as at a particular time; (ii) the purpose of reducing the amount of the estimate is to bring it closer to the unpaid amount of the underlying liability as at the time the estimate was made; (iii) reductions of the unpaid amount of the underlying liability that happen after the time the estimate was made are dealt with by section 268‑20 (Nature of liability to pay estimate) and so should not be taken into account in exercising such a power; and (b) the effects of sections 268‑55 and 268‑70 (effect of reduction or revocation on liabilities). 268‑40 How estimate may be reduced or revoked—statutory declaration or affidavit Scope (1) This section applies as set out in the following table: Statutory declaration or affidavit Item This section applies if ... and ... within ... 1 the Commissioner gives you notice of the estimate you give the Commissioner a statutory declaration for the purposes of this section (a) 7 days after the Commissioner gives you the notice; or (b) a longer period allowed by the Commissioner. 2 you are a party to proceedings before a court that relate to the recovery of the unpaid amount of the estimate you: (a) 14 days after you first take a procedural step as a party to the proceedings; or (a) file an affidavit for the purposes of this section; and (b) a longer period allowed by the court. (b) serve a copy on the Commissioner 3 (a) the estimate is of the unpaid amount of a liability of a company; and the company: (a) 14 days after notice of the application was served on the company; or (b) the Commissioner serves on the company a *statutory demand relating to the company's liability to pay the unpaid amount of the estimate; and (a) files an affidavit for the purposes of this section; and (b) a longer period allowed by the court. (c) an application is made to a court under section 234, 459P, 462 or 464 of the Corporations Act 2001 for the company to be wound up (b) serves a copy on the applicant Example: For the purposes of item 2 of the table, taking a procedural step as a party to proceedings includes entering an appearance, filing a notice of intention to defend, or applying to set aside judgment entered in default of appearance. Note 1: Section 459C of the Corporations Act 2001 creates a presumption that a company is insolvent, and may be wound up, if the company fails to comply with a statutory demand. Note 2: See section 268‑90 for what the statutory declaration or affidavit must contain and who must make, swear or affirm it. Reduction (2) The amount of the estimate is reduced if the statutory declaration is to the effect, or the affidavit verifies facts sufficient to prove, that a specified lesser amount is the unpaid amount of the underlying liability. Example: Subsection (2) will apply if the statutory declaration etc. is to the effect that the underlying liability has been discharged in full (and therefore the unpaid amount of the liability is nil). (3) The amount of the reduction is the amount by which the unpaid amount of the estimate (just before the reduction) exceeds the amount specified. Note: The effect of subsection (3) is to reduce the unpaid amount of the estimate to the amount specified. Revocation (4) The estimate is revoked if the statutory declaration is to the effect, or the affidavit verifies facts sufficient to prove, that the underlying liability never existed. 268‑45 How estimate may be reduced or revoked—rejection of proof of debt Scope (1) This section applies if: (a) the Commissioner lodges a proof of debt relating to the unpaid amount of the estimate; and (b) section 268‑95 applies to an entity (your supervising entity) in relation to you. Rejection of proof of debt (2) Your supervising entity may give the Commissioner a statutory declaration to the effect that: (a) the underlying liability has been discharged in full; or (b) the unpaid amount of the underlying liability is a specified, lesser amount; or (c) the underlying liability never existed. Note: See section 268‑90 for what the statutory declaration must contain and who must make it. (3) If your supervising entity does so, he or she may reject the proof of debt (in whole or in part) on the ground made out in the statutory declaration. (4) If the Commissioner appeals, or applies for review of, your supervising entity's decision to reject the proof of debt, nothing in subsection (2) or (3) prevents evidence being adduced to contradict statements in the declaration. Note: Such evidence might also be relevant to a prosecution for an offence, such as an offence against section 11 of the Statutory Declarations Act 1959 (False declarations). Revocation or reduction of estimate (5) The following table applies in relation to the outcome following all (if any) appeals from, and applications for review of, your supervising entity's decision to reject the proof of debt. (If there are no appeals or applications for review, the outcome is your supervising entity's decision as originally made.) Rejecting proof of debt Item If the outcome is that ... then ... 1 the proof is rejected in whole on the ground that the estimate has been discharged in full the amount of the estimate is reduced by the unpaid amount of the estimate (just before the reduction). 2 the proof is rejected in part the amount of the estimate is reduced by so much of the unpaid amount of the estimate (just before the reduction) as is rejected. 3 the proof is rejected in whole on the ground that the underlying liability never existed the estimate is revoked. Note 1: The effect of item 1 of the table is to reduce the unpaid amount of the estimate to nil. Note 2: The effect of item 2 of the table is to reduce the unpaid amount of the estimate to the amount admitted to proof. 268‑50 How estimate may be reduced—amount paid or applied (1) This section applies if: (a) an amount is paid or applied towards discharging your liability to pay the amount of the estimate; and (b) the amount paid or applied exceeds the unpaid amount of the underlying liability as at the time just before the payment or application. (2) The amount of the estimate is reduced so that it does not exceed the unpaid amount, at the time mentioned in paragraph (1)(b), of the underlying liability. 268‑55 When reduction or revocation takes effect Scope (1) This section applies for the purposes of the following: (a) Subdivision 268‑C (Liability to pay estimates); (b) section 268‑60 (refund of overpayments); (c) Subdivision 268‑E (Late payment of estimates); (d) Division 269 (Penalties for directors of non‑complying companies). When reduction or revocation takes effect (2) If the amount of the estimate is reduced, the estimate has effect, and is taken always to have had effect, as if the original amount of the estimate had been the reduced amount. (3) If the estimate is revoked, the estimate is taken never to have been made. 268‑60 Consequences of reduction or revocation—refund (1) This section applies if: (a) an amount is paid or applied towards discharging your liability to pay the amount of the estimate; and (b) the amount paid or applied exceeds the unpaid amount of the estimate as at the time just before the payment or application. Example: You pay an amount towards discharging the estimate and the estimate is later reduced to a lesser amount. Note: Section 268‑50 provides for the reduction of the amount of the estimate in the case of overpayment. (2) The Commissioner must pay you the excess. Note: See Division 3A of Part IIB of this Act for the rules about how the Commissioner must pay you. Division 3 of that Part allows the Commissioner to apply the amount owing as a credit against tax debts that you owe the Commonwealth. 268‑65 Consequences of reduction or revocation—statutory demand changed or set aside Scope (1) This section applies if: (a) the estimate is of the unpaid amount of a liability of a company; and (b) the Commissioner has served a *statutory demand on the company relating to the company's liability to pay the unpaid amount of the estimate; and (c) the amount of the estimate is later reduced, or the estimate is revoked. Statutory demand changed (2) The *statutory demand is changed accordingly. (3) The *statutory demand is taken to have had effect (as so changed) from the time the Commissioner served it on the company. Statutory demand set aside (4) The *statutory demand is set aside if subsection (2) reduces the amount of the debt (or the total of the amounts of the debts) below the statutory minimum (within the meaning of the Corporations Act 2001). 268‑70 Consequences of reduction or revocation—underlying liability Reduction of the amount of the estimate, or revocation of the estimate, does not affect the Commissioner's rights or remedies in relation to the underlying liability (except to the extent that this Division expressly provides otherwise). Subdivision 268‑E—Late payment of estimates Table of sections 268‑75 Liability to pay the general interest charge 268‑80 Effect of paying the general interest charge 268‑75 Liability to pay the general interest charge (1) This section applies if your liability to pay the amount of the estimate remains undischarged at the end of 7 days after the Commissioner gives you notice of the estimate. (2) You are liable to pay the *general interest charge on the unpaid amount of the estimate for each day in the period that: (a) started at the beginning of the day by which the underlying liability was due to be paid; and (b) finishes at the end of the last day on which, at the end of the day, any of the following remains unpaid: (i) the amount of the estimate; (ii) general interest charge on any of the amount of the estimate. Note: The general interest charge is worked out under Part IIA of this Act. 268‑80 Effect of paying the general interest charge Scope (1) If you are liable to pay the *general interest charge under section 268‑75 in relation to the estimate, this section applies to the following liabilities: (a) your liability to pay the general interest charge; (b) a liability of yours to pay a general interest charge, under a corresponding provision of Subdivision 16‑B, because the underlying liability remains undischarged; (c) liability under a judgment, to the extent that it is based on a liability referred to in paragraph (a) or (b); (d) a liability of yours to pay interest carried by a judgment debt, to the extent that the judgment debt is based on: (i) the liability to pay the estimate; or (ii) the liability to pay the general interest charge under section 268‑75 on an unpaid amount of the estimate. Discharging one liability discharges other liabilities (2) If, at a particular time, an amount is paid or applied towards discharging one of the liabilities, each of the other liabilities that is in existence at that time is discharged to the extent of the same amount. (3) However, this section does not discharge a liability to a greater extent than the amount of the liability. (4) If, because a judgment debt carries interest, section 8AAH of this Act reduces the amount of a *general interest charge payable as mentioned in paragraph (1)(b) of this section, the amount of the reduction is taken, for the purposes of subsection (2) of this section, to have been applied towards discharging your liability to the charge. Subdivision 268‑F—Miscellaneous Table of sections 268‑85 Effect of judgment on liability on which it is based 268‑90 Requirements for statutory declaration or affidavit 268‑95 Liquidators, receivers and trustees in bankruptcy 268‑100 Division not to limit or exclude Corporations or Bankruptcy Act 268‑85 Effect of judgment on liability on which it is based Estimate payable despite judgment (1) The unpaid amount of the estimate, or of the underlying liability, does not stop being payable merely because a judgment has been given by, or entered in, a court. Division applies to liability under judgment (2) This Division applies in relation to liability under a judgment, to the extent that it is based on your liability to pay the amount of the estimate, in the same way as this Division applies to that estimate liability. (3) This Division applies in relation to liability under a judgment, to the extent that it is based on the underlying liability, in the same way as this Division applies to the underlying liability. (4) Subsections (2) and (3) do not apply for the purposes of the following: (a) section 268‑20 (Nature of liability to pay estimate); (b) section 268‑30 (Estimate provable in bankruptcy or winding up); (c) section 268‑45 (rejection of proof of debt). Judgment conclusive as to amount of liability (5) Nothing in this Division affects the conclusiveness of a judgment as to the amount of a liability on which it is based. 268‑90 Requirements for statutory declaration or affidavit Scope (1) This section applies to a statutory declaration given, or an affidavit filed, for the purposes of section 268‑40 or 268‑45 in relation to the estimate. Content (2) The statutory declaration or affidavit must verify the following facts: (a) whichever of the following are applicable: (i) the sum of all amounts you withheld under Division 12 during the relevant period, or the fact that you did not withhold any such amounts during the period; (ii) the sum of all amounts you were required to pay under Division 13 (Alienated personal services payments) during the relevant period, or the fact that you were not required to pay any such amounts during the period; (iii) the sum of all amounts you were required to pay under Division 14 (non‑cash benefits and accruing gains) during the relevant period, or the fact that you were not required to pay any such amounts during the period; (b) what has been done to comply with Division 16 (Payer's obligations and rights) in relation to the amounts referred to in paragraph (a). Maker or deponent (3) The statutory declaration or affidavit must be made, sworn or affirmed by: (a) an individual specified in the following table; or (b) your liquidator, receiver or trustee in bankruptcy (if and as applicable). Who must make the statutory declaration or swear or affirm the affidavit Item A statutory declaration or affidavit in relation to an estimate of a liability of ... must be made, sworn or affirmed by ... 1 an individual that individual. 2 a body corporate (a) in the case of a company that has a director or a company secretary (within the meaning of the Corporations Act 2001)—a director of the company or the company secretary; or (b) in the case of an *Australian government agency—an individual prescribed by the regulations; or (c) in any case—the public officer of the body corporate (for the purposes of the Income Tax Assessment Act 1936). 3 a body politic an individual prescribed by the regulations. 4 a partnership a partner of the partnership. 5 any other unincorporated association or body of persons (a) a member of the association's or body's committee of management; or (b) the public officer of the association or body (for the purposes of the Income Tax Assessment Act 1936). 6 a trust (a) the trustee of the trust; or (b) the public officer of the trust (for the purposes of the Income Tax Assessment Act 1936). 7 a *superannuation fund or an *approved deposit fund (a) the trustee of the fund; or (b) if the fund does not have a trustee—the entity managing the fund. (4) If the entity specified in the table in subsection (3) is not an individual, the table is taken to specify the individual who, under that subsection, would be eligible to make a statutory declaration in relation to an estimate of a liability of that entity. 268‑95 Liquidators, receivers and trustees in bankruptcy Scope (1) This section applies to an entity (your supervising entity), in relation to you, if: (a) the entity is your liquidator, receiver, trustee in bankruptcy or administrator, or the administrator of a deed of company arrangement executed by you; or (b) your property is vested in the entity, or the entity has control of your property. (2) For the purposes of this Division, this section applies to an entity in relation to a partnership if it applies to the entity in relation to a partner of the partnership. Notices from the Commissioner (3) For the purposes of this Division, a notice given by the Commissioner to your supervising entity is taken to have been given to you. (4) You must give your supervising entity a copy of any notice given to you by the Commissioner under this Division. You must do so as soon as practicable, and in any event within 7 days, after: (a) if the Commissioner gave you the notice before the day when your property vested in, or control of your property passed to, the supervising entity—that day; or (b) if subsection (2) applies and the Commissioner gave you the notice before the day when the relevant partner's property vested in, or control of the relevant partner's property passed to, the supervising entity—that day; or (c) otherwise—the day when the Commissioner gave you the notice. (5) If the Commissioner gives you and your supervising entity a notice at different times, each notice is taken to have been given at the later of those times. Action taken by your supervising entity (6) For the purposes of this Division, a statutory declaration given to the Commissioner by your supervising entity is taken to have been given by you. (7) For the purposes of this Division, an affidavit filed by your supervising entity is taken to have been filed by you. (8) For the purposes of item 2 in the table in subsection 268‑40(1) (recovery proceedings), a procedural step taken by your supervising entity is taken to have been taken by you. Multiple supervising entities (9) If you have 2 or more supervising entities, anything this Division provides for to be done by or in relation to your supervising entity may be done by or in relation to any of them. 268‑100 Division not to limit or exclude Corporations or Bankruptcy Act This Division is not intended to limit or exclude the operation of Chapter 5 of the Corporations Act 2001 (External administration), or the Bankruptcy Act 1966, to the extent that Chapter or Act can operate concurrently with this Division. Note: Section 268‑30 and Subdivision 268‑D affect the operation of Chapter 5 of the Corporations Act 2001 and the Bankruptcy Act 1966. Division 269—Penalties for directors of non‑complying companies Table of Subdivisions Guide to Division 269 269‑A Object and scope 269‑B Obligations and penalties 269‑C Discharging liabilities 269‑D Miscellaneous Guide to Division 269 269‑1 What this Division is about The directors of a company have a duty to ensure that the company either: (a) meets its obligations under Subdivision 16‑B (obligation to pay withheld amounts to the Commissioner) and Division 268; or (b) goes promptly into voluntary administration under the Corporations Act 2001 or into liquidation. The directors' duties are enforced by penalties. Note: The duties this Division imposes on the directors of the company are in addition to the similar duties imposed on the public officer of the company. See subsection 252(1) of the Income Tax Assessment Act 1936. Subdivision 269‑A—Object and scope Table of sections 269‑5 Object of Division 269‑10 Scope of Division 269‑5 Object of Division The object of this Division is to ensure that a company either: (a) meets its obligations under Subdivision 16‑B (obligation to pay withheld amounts to the Commissioner) and Division 268; or (b) goes promptly into voluntary administration under the Corporations Act 2001 or into liquidation. Note: The directors' duties are enforced by penalties on the directors. A penalty recovered under this Division is applied towards meeting the company's obligation. 269‑10 Scope of Division (1) This Division applies as set out in the following table: Obligations that directors must cause company to comply with Item This Division applies if, on a particular day (the initial day), a company registered under the Corporations Act 2001 ... and the company is obliged to pay to the Commissioner on or before a particular day (the due day) ... 1 withholds an amount under Division 12 that amount in accordance with Subdivision 16‑B. 2 receives an *alienated personal services payment an amount in respect of that alienated personal services payment in accordance with Division 13 and Subdivision 16‑B. 3 provides a *non‑cash benefit an amount in respect of that benefit in accordance with Subdivision 16‑B. 4 is given notice of an estimate under Division 268 the amount of the estimate. Note: In a case covered by item 2, 3 or 4 of the table, the due day is the same as the initial day. (2) This Division applies in relation to an amount that the company purports to withhold under Division 12, but is not required to withhold, as if the company were required to withhold the amount. Subdivision 269‑B—Obligations and penalties Table of sections 269‑15 Directors' obligations 269‑20 Penalty 269‑25 Notice 269‑30 Remission of penalty before end of notice period 269‑35 Defences 269‑15 Directors' obligations Directors' obligations (1) The directors (within the meaning of the Corporations Act 2001) of the company (from time to time) on or after the initial day must cause the company to comply with its obligation. (2) The directors of the company (from time to time) continue to be under their obligation until: (a) the company complies with its obligation; or (b) an administrator of the company is appointed under section 436A, 436B or 436C of the Corporations Act 2001; or (c) the company begins to be wound up (within the meaning of that Act). Instalment arrangements (3) The Commissioner must not commence, or take a procedural step as a party to, proceedings to enforce an obligation, or to recover a penalty, of a director under this Division if an *arrangement that covers the company's obligation is in force under section 255‑15 (Commissioner's power to permit payments by instalments). Note 1: The arrangement may also cover other obligations of the company. Note 2: Subsection (3) does not prevent the Commissioner from giving a director a notice about a penalty under section 269‑25. 269‑20 Penalty Penalty for director on or before due day (1) You are liable to pay to the Commissioner a penalty if: (a) at the end of the due day, the directors of the company are still under an obligation under section 269‑15; and (b) you were under that obligation at or before that time (because you were a director). Note: Paragraph (1)(b) applies even if you stopped being a director before the end of the due day: see subsection 269‑15(2). (2) The penalty is due and payable at the end of the due day. Note: The Commissioner must not commence proceedings to recover the penalty until the end of 21 days after the Commissioner gives you notice of the penalty under section 269‑25. Penalty for new director (3) You are also liable to pay to the Commissioner a penalty if: (a) after the due day, you became a director of the company and began to be under an obligation under section 269‑15; and (b) 14 days later, you are still under that obligation. (4) The penalty is due and payable at the end of that 14th day. Note: The Commissioner must not commence proceedings to recover the penalty until the end of 21 days after the Commissioner gives you notice of the penalty under section 269‑25. Amount of penalty (5) The amount of a penalty under this section is equal to the unpaid amount of the company's liability under its obligation. Note 1: See section 269‑40 for the effect on your penalty of the company discharging its obligation, or of another director paying his or her penalty. Note 2: See section 269‑45 for your rights of indemnity and contribution. 269‑25 Notice Commissioner must give notice of penalty (1) The Commissioner must not commence proceedings to recover from you a penalty payable under this Subdivision until the end of 21 days after the Commissioner gives you a written notice under this section. Content of notice (2) The notice must: (a) set out what the Commissioner thinks is the unpaid amount of the company's liability under its obligation; and (b) state that you are liable to pay to the Commissioner, by way of penalty, an amount equal to that unpaid amount because of an obligation you have or had under this Division; and (c) explain the main circumstances in which the penalty will be remitted. (3) To avoid doubt, a single notice may relate to 2 or more penalties, but must comply with subsection (2) in relation to each of them. When notice is given (4) Despite section 29 of the Acts Interpretation Act 1901, a notice under subsection (1) is taken to be given at the time the Commissioner leaves or posts it. Note 1: Section 28A of the Acts Interpretation Act 1901 may be relevant to giving a notice under subsection (1). Note 2: Section 269‑50 of this Act is also relevant to giving a notice under subsection (1). 269‑30 Remission of penalty before end of notice period A penalty of yours under this Division is remitted if the directors of the company stop being under the relevant obligation under section 269‑15: (a) before the Commissioner gives you notice of the penalty under section 269‑25; or (b) within 21 days after the Commissioner gives you notice of the penalty under that section. 269‑35 Defences Scope (1) This section applies in relation to: (a) proceedings to recover from you a penalty payable under this Division; or (b) proceedings against you in relation to a right referred to in paragraph 269‑45(2)(b) (directors jointly and severally liable as guarantors). Illness (2) It is a defence in the proceedings if it is proved that, because of illness or for some other good reason, it would have been unreasonable to expect you to take part, and you did not take part, in the management of the company at any time when: (a) you were a director of the company; and (b) the directors were under the relevant obligations under section 269‑15. All reasonable steps (3) It is a defence in the proceedings if it is proved that: (a) you took all reasonable steps to ensure that the directors complied with their relevant obligations under section 269‑15; or (b) there were no such steps that you could have taken. (4) In determining what are reasonable steps for the purposes of subsection (3), have regard to: (a) when, and for how long, you were a director and took part in the management of the company; and (b) all other relevant circumstances. Power of courts to grant relief (5) Section 1318 of the Corporations Act 2001 does not apply to an obligation or liability of a director under this Division. Subdivision 269‑C—Discharging liabilities Table of sections 269‑40 Effect of director paying penalty or company discharging liability 269‑45 Directors' rights of indemnity and contribution 269‑40 Effect of director paying penalty or company discharging liability Liabilities (1) This section applies to the following liabilities: (a) the liability of the company under its obligation referred to in section 269‑10; (b) the liability of each director (or former director) to pay a penalty under this Division in relation to the liability of the company referred to in paragraph (a); (c) a liability under a judgment, to the extent that it is based on a liability referred to in paragraph (a) or (b). Discharging one liability discharges other liabilities (2) If an amount is paid or applied at a particular time towards discharging one of the liabilities, each of the other liabilities in existence at that time is discharged to the extent of the same amount. (3) If, because of section 268‑20 (Nature of liability to pay estimate), one of the liabilities is discharged at a particular time to the extent of a particular amount, each of the other liabilities in existence at that time is discharged to the extent of the same amount. (4) This section does not discharge a liability to a greater extent than the amount of the liability. 269‑45 Directors' rights of indemnity and contribution (1) This section applies if you pay a penalty under this Division in relation to a liability of the company under an obligation referred to in section 269‑10. (2) You have the same rights (whether by way of indemnity, subrogation, contribution or otherwise) against the company or anyone else as if: (a) you made the payment under a guarantee of the liability of the company; and (b) under the guarantee you and every other person who has paid, or from whom the Commissioner is entitled to recover, a penalty under this Division in relation to the company's obligation were jointly and severally liable as guarantors. Subdivision 269‑D—Miscellaneous Table of sections 269‑50 How notice may be given 269‑55 Division not to limit or exclude Corporations Act 269‑50 How notice may be given The Commissioner may give you a notice under section 269‑25 by leaving it at, or posting it to, an address that appears, from information held by the Australian Securities and Investments Commission, to be, or to have been within the last 7 days, your place of residence or *business. 269‑55 Division not to limit or exclude Corporations Act To avoid doubt, this Division is not intended to limit or exclude the operation of Chapter 5 of the Corporations Act 2001 (External administration), to the extent that Chapter can operate concurrently with this Division. Part 2—Consequential amendments Administrative Decisions (Judicial Review) Act 1977 11 Paragraph (ea) of Schedule 1 Repeal the paragraph. 12 After paragraph (ga) of Schedule 1 Insert: (gaa) decisions of the Commissioner of Taxation under Subdivision 268‑B or section 268‑35 in Schedule 1 to the Taxation Administration Act 1953; Note: Subdivision 268‑B and section 268‑35 empower the Commissioner to make, reduce and revoke estimates of certain liabilities. Corporations Act 2001 13 Subsection 443BA(2) (definition of unpaid amount) Repeal the definition. Higher Education Support Act 2003 14 Paragraph 154‑60(a) Omit ", and Division 1 of Part VI,". 15 After paragraph 154‑60(a) Insert: (aa) Division 5 of the Income Tax Assessment Act 1997; and 16 Section 154‑60 (note) Repeal the note. Income Tax Assessment Act 1936 17 Subsection 102AAM(14) Repeal the subsection. 18 At the end of Subdivision B of Division 6AAA of Part III Add: 102AAN Collection etc. of interest Sections 170, 172, 174, 254 and 255 of this Act, and Division 5 of the Income Tax Assessment Act 1997 (How to work out when to pay your income tax), apply to interest payable under section 102AAM in the same way as they apply to income tax. 19 Subsection 159GZZZZH(4) Omit "204,". 20 Subsection 159GZZZZH(4) After "former sections", insert "204,". 21 At the end of section 159GZZZZH Add: (5) Division 5 of the Income Tax Assessment Act 1997 (How to work out when to pay your income tax) applies to tax payable under this section in the same way as that Division applies to income tax. 22 Subsection 163B(8) Repeal the subsection, substitute: Collection etc. of additional tax (8) Former sections 204, 205, 206, 215, 216, 258 and 259, and sections 254 and 255, apply to additional tax payable under this section in the same way as they apply to income tax. 23 Subsection 163B(10) (definition of instalment taxpayer) Before "Division 1C", insert "former". 24 Subsection 163B(10) (definition of relevant entity) Before "Division 1B", insert "former". 25 Subsection 254(2) Repeal the subsection, substitute: (2) Subsection (1) applies to the following in the same way as it applies to tax: (a) the general interest charge under: (i) section 163AA, former section 170AA, former subsection 204(3), former subsection 221AZMAA(1), former subsection 221AZP(1), former subsection 221YD(3) or former section 221YDB of this Act; (ii) section 5‑15 of the Income Tax Assessment Act 1997; (b) additional tax under former Part VII of this Act; (c) shortfall interest charge. Note 1: The general interest charge is worked out under Part IIA of the Taxation Administration Act 1953 and shortfall interest charge is worked out under Division 280 in Schedule 1 to that Act. Note 2: Subsection 8AAB(4) of that Act lists the provisions that apply the general interest charge. 26 Subsection 255(4) Repeal the subsection, substitute: (4) This section applies to the following in the same way as it applies to tax: (a) the general interest charge under: (i) section 163AA, former section 170AA, former subsection 204(3), former subsection 221AZMAA(1), former subsection 221AZP(1), former subsection 221YD(3) or former section 221YDB of this Act; (ii) section 5‑15 of the Income Tax Assessment Act 1997; (b) additional tax under former Part VII of this Act; (c) shortfall interest charge. Note 1: The general interest charge is worked out under Part IIA of the Taxation Administration Act 1953 and shortfall interest charge is worked out under Division 280 in Schedule 1 to that Act. Note 2: Subsection 8AAB(4) of that Act lists the provisions that apply the general interest charge. Income Tax Assessment Act 1997 27 Subsection 3‑5(3) (note to question 3) Omit "sections 204, 213 and 219 of the Income Tax Assessment Act 1936", substitute "Division 5 of this Act". 28 Sections 214‑165 and 292‑400 Repeal the sections. 29 Subsection 721‑10(2) (table item 5) Repeal the item, substitute: 3 section 5‑5 of the Income Tax Assessment Act 1997 (income tax, and other amounts treated in the same way as income tax under that section) the *financial year to which the income tax etc. relates 5 section 197‑70 of the Income Tax Assessment Act 1997 (untainting tax) the *franking period of the *head company in which the *untainting tax became due and payable 30 Subsection 721‑10(2) (table item 25) Repeal the item. 31 At the end of subsection 721‑10(2) Add: Note: The other amounts referred to in item 3 of the table are: (a) interest payable under section 102AAM of the Income Tax Assessment Act 1936 (distributions from certain non‑resident trust estates); and (b) tax payable under section 159GZZZZH of that Act (Tax payable where infrastructure borrowing certificate cancelled). 32 Subsection 995‑1(1) (definition of full self‑assessment taxpayer) Repeal the definition. Income Tax (Transitional Provisions) Act 1997 33 Section 214‑115 Repeal the section. Social Security Act 1991 34 Section 1061ZZFG Omit ", and section 204, of the Income Tax Assessment Act 1936,", substitute "of the Income Tax Assessment Act 1936, Division 5 of the Income Tax Assessment Act 1997,". Student Assistance Act 1973 35 Section 12ZN Omit "and section 204 of the Income Tax Assessment Act 1936", substitute "of the Income Tax Assessment Act 1936, Division 5 of the Income Tax Assessment Act 1997". Taxation Administration Act 1953 36 Section 8AAA Omit "(Most of the provisions are in the Income Tax Assessment Act 1936.)". 37 Subsection 8AAB(4) (table items 9 and 30) Repeal the items. 38 Subsection 8AAB(5) (after table item 2) Insert: 2AAA 5‑15 Income Tax Assessment Act 1997 39 Subsection 8AAB(5) (after table item 17L) Insert: 17M 268‑75 in Schedule 1 Taxation Administration Act 1953 40 Paragraph 45‑130(1)(b) in Schedule 1 Omit "*full self‑assessment taxpayer", substitute "*self‑assessment entity". 41 Subparagraph 45‑130(1)(c)(i) in Schedule 1 Omit "*full self‑assessment taxpayer", substitute "self‑assessment entity". 42 Subsection 250‑5(2) in Schedule 1 (example) Omit "Division 1 of Part VI of the Income Tax Assessment Act 1936", substitute "Division 5 of the Income Tax Assessment Act 1997". 43 Subsection 250‑10(1) in Schedule 1 (table items 55 and 65 to 85) Repeal the items. 44 Subsection 250‑10(1) in Schedule 1 (at the end of the table) Add: 100 interest payable under section 102AAM (about distributions from non‑resident trust estates) 5‑5 of the Income Tax Assessment Act 1997 105 tax payable under section 159GZZZZH (Tax payable where infrastructure borrowing certificate cancelled) 5‑5 o