Commonwealth: Taxation Laws Amendment Act (No. 5) 1992 (Cth)

Taxation Laws Amendment Act (No. 5) 1992 Act No. 224 of 1992 as amended This compilation was prepared on 23 September 2010 taking into account amendments up to Act No. 75 of 2010 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 TABLE OF PROVISIONS PART 1 - PRELIMINARY Section 1. Short title [see Note 1] 2. Commencement [see Note 1] PART 2 - AMENDMENT OF THE INCOME TAX ASSESSMENT ACT 1936 Division 1 - Principal Act 3. Principal Act Division 2 - Amendments to improve the readability of the capital gains tax provisions 4. Heading to Division 1 of Part IIIA 5. Insertion of new Subdivision and heading: Subdivision A - Object, simplified outline, example and index 160AX. Object 160AY. Simplified outline of scheme of Part 160AZ. Example of how this Part works 160AZA. Index of key concepts Subdivision B - Interpretation Division 3 - Amendments relating to tax-deductible gifts 6. Re-location of subsection 51(7A) of the Principal Act (contributions to registered political parties) 7. Gifts, pensions etc. 8. Register of Cultural Organisations 9. Insertion of new section: 78AB. Register of Environmental Organisations Division 4 - Amendments relating to provisional tax 10. Interpretation 11. Uplifted provisional tax amount 12. Additional tax where income under-estimated or where PAYE deductions over-estimated 13. Application Division 5 - Amendments to increase zone rebates and related rebates 14. Income of certain persons serving with an armed force under the control of the United Nations 15. Rebates for residents of isolated areas 16. Rebates for members of Defence Force serving overseas 17. Application Division 6 - Amendments relating to disposals and redemptions of traditional securities 18. Redemption of special bonds redeemable at a premium 19. Deduction for loss on disposal or redemption of traditional securities 20. Exemption of certain gains or losses 21. Application 22. Transitional - subsection 70B(5) of the amended Act Division 7 - Amendments relating to live stock 23. Repeal of section and substitution of new sections: 32. Live stock other than horse breeding stock - value at end of year of income 32A. Horse breeding stock - value at end of year of income 24. Application Division 8 - Amendments to allow deductions for environment protection expenditure 25. Insertion of new Subdivision: Subdivision CA - Deductions for environment protection expenditure 82BH. Objects of Subdivision 82BJ. Interpretation 82BK. Deduction of allowable environment protection expenditure 82BL. Allowable environment protection expenditure 82BM. Eligible environment protection activity 82BN. No deduction for expenditure on land, plant etc. 82BP. No deduction where expenditure is recouped 82BQ. Transactions between persons not at arm's length 82BR. Property used for eligible environment protection activities taken to be used for the purpose of producing assessable income 26. Interpretation 27. Insertion of new section: 124ZFC. Division has effect as if certain environment protection earthworks were buildings Division 9 - Amendments relating to research and development 28. Expenditure on research and development activities 29. Recouped expenditure on research and development activities 30. Insertion of new section: 73CB. Expenditure incurred to government bodies – guaranteed returns 31. Amendment of assessments 32. Application Division 10 - Amendments to limit deductions for interest etc. on loans obtained to finance certain superannuation contributions and life assurance premiums 33. Insertion of new section: 67AAA. Deductions not allowable for interest etc. on loans obtained to finance certain superannuation contributions and life assurance premiums 34. Application Division 11 - Amendments to extend the concept of Crown leases for the purposes of the depreciation provisions 35. Property installed on leased Crown land - lessee deemed to be owner etc. 36. Application 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 37. Interpretation 38. Application 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 39. Interpretation 40. Application Division 14 - Amendments relating to roll-over relief where deductions allowed for research and development under section 73B 41. Disposal, loss or destruction of depreciated property 42. Insertion of new sections: 73E. Section 73B roll-over relief on disposal of unit of plant where CGT roll-over relief allowed under section 160ZZO 73F. Section 73B roll-over relief on disposal of building etc. where CGT roll-over relief allowed under section 160ZZO 73G. Section 73B roll-over relief on disposal of unit of industrial property where CGT roll-over relief allowed under section 160ZZO 43. Keeping of records 44. Application 45. Transitional - elective roll-over relief where property disposed of after 6 December 1990 Division 15 - Amendments relating to roll-over relief where capital deductions have been allowed 46. 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 47. Section 73A roll-over relief where CGT roll-over relief allowed under section 160ZZM, 160ZZMA, 160ZZN, 160ZZNA or 160ZZO 48. 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. 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 50. 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. 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 52. 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 53. Roll-over relief where CGT roll-over relief allowed under section 160ZZM, 160ZZMA, 160ZZN, 160ZZNA or 160ZZO 54. Roll-over relief where CGT roll-over relief allowed under section 160ZZM, 160ZZMA, 160ZZN, 160ZZNA or 160ZZO 55. 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 56. Application 57. 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 Division 16 - Amendment relating to record-keeping 58. Keeping of records Division 17 - Amendments relating to royalties 59. Interpretation 60. Source of royalty income derived by a non-resident 61. Interpretation 62. Heading to Division 11A of Part III 63. Interpretation 64. Liability to withholding tax 65. Repeal of Division 13A of Part III 66. Interpretation 67. Person making natural resource payment to non-resident to ascertain amount to be deducted in respect of tax 68. Duties of payers 69. Interpretation 70. Deductions from dividends, interest and royalties 71. Exemptions and variations 72. Deductions to be forwarded to Commissioner etc. 73. Liability of person who fails to make deductions etc. 74. Interest or royalty not allowable deduction until payment made to Commissioner on account of tax 75. Credits in respect of deductions made from dividends, interest or royalties 76. Liability of trustee to pay deductions to Commissioner 77. Persons discharged from liability in respect of deductions 78. Person in receipt or control of money from non-resident 79. Certain provisions to be disregarded in calculating attributable income 80. Repeal of the Income Tax (Film Royalties) Act 1977 81. Application 82. Transitional - equipment royalties paid under pre-18 August 1992 contracts Division 18 - Amendments relating to foreign income 83. Distribution benefits - CFCs 84. Primary production losses of pre-1990 years of income 85. Credits in respect of foreign tax 86. Application PART 3 - AMENDMENT OF THE INCOME TAX (INTERNATIONAL AGREEMENTS) ACT 1953 Division 1 - Principal Act 88. Principal Act Division 2 - Amendments relating to royalties 89. Withholding tax 90. Application PART 4 - AMENDMENT OF THE INDUSTRY RESEARCH AND DEVELOPMENT ACT 1986 Division 1 - Principal Act 91. Principal Act Division 2 - Amendments relating to finance schemes 92. Interpretation 93. Functions of Board 94. Duties of Chairperson 95. Guidelines for policies and practices of Board 96. Delegation by Board 97. Committees 98. Delegation by committee 99. Interpretation 100. Insertion of new section: 39EA. Finance scheme guidelines 101. Insertion of new section: 39MA. Certificate about ineligible finance schemes 102. Joint registration 103. Internal review of decisions 104. Review of decisions by Administrative Appeals Tribunal 105. Statements to accompany notification of decisions 106. Application Division 3 - Amendments relating to registration of companies under section 39P of the Principal Act 107. Joint registration 108. Application Division 4 - Amendments relating to the Register of Commercial Government Bodies 109. Interpretation 110. Insertion of new sections: 39HA. Register of Commercial Government Bodies 39HB. Commercial government bodies guidelines 39HC. Applications for entry on the Register of Commercial Government Bodies 39HD. Board's decision on application for entry on register of Commercial Government Bodies 39HE. Grant of application for entry on register of Commercial Government Bodies 39HF. Removal from Register of Commercial Government Bodies 111. Review of decisions by Administrative Appeals Tribunal 112. Statements to accompany notification of decisions PART 5 - AMENDMENT OF THE PETROLEUM RESOURCE RENT TAX ASSESSMENT ACT 1987 113. Principal Act 114. Transfer of entire entitlement to assessable receipts 115. Defined terms 116. Matters dealt with in this Part 117. Matters dealt with in this Part 118. Matters dealt with in this Part 119. Rule - person must have held interests in relation to transferring entity and receiving project 120. Rule - loss company and profit company to have held interests and been group companies PART 6 - AMENDMENT OF THE TAXATION ADMINISTRATION ACT 1953 Division 1 - Principal Act 121. Principal Act Division 2 - Amendment relating to methods of payment of tax liabilities etc. 122. Insertion of new section: 16A. Regulations may provide for methods of payment of tax liabilities etc. Division 3 - Amendments relating to taxation offences 123. Insertion of new section: 8HA. Court may order payment of amount in addition to penalty 124. Court may order payment of amount in addition to penalty 125. Prosecution of taxation offences 126. Prosecution may be commenced at any time PART 7 - AMENDMENT OF THE SALES TAX ASSESSMENT ACT (NO. 5) 1930 127. Principal Act 128. Interpretation PART 8 - AMENDMENT OF THE SALES TAX (EXEMPTIONS AND CLASSIFICATIONS) ACT 1935 129. Principal Act 130. First Schedule PART 9 - AMENDMENT OF THE SALES TAX ASSESSMENT ACT 1992 131. Principal Act 132. Schedule 1 PART 10 - AMENDMENT OF THE SALES TAX (EXEMPTIONS AND CLASSIFICATIONS) ACT 1992 133. Principal Act 134. Schedule 1 TAXATION LAWS AMENDMENT ACT (No. 5) 1992 No. 224 of 1992 - LONG TITLE An Act to amend the law relating to taxation PART 1 - PRELIMINARY TAXATION LAWS AMENDMENT ACT (No. 5) 1992 No. 224 of 1992 - SECT 1 Short title [see Note 1] 1. This Act may be cited as the Taxation Laws Amendment Act (No. 5) 1992. TAXATION LAWS AMENDMENT ACT (No. 5) 1992 No. 224 of 1992 - SECT 2 Commencement [see Note 1] 2.(1) Subject to this section, this Act commences on the day on which it receives the Royal Assent. (2) Subsections 14(2), 15(2), 16(2) and 17(2) commence on 1 July 1993. (3) Part 5 is taken to have commenced on 1 July 1991. (4) Parts 7 and 8 are taken to have commenced immediately after the commencement of section 8 of the Customs and Excise Legislation Amendment Act 1992. (5) Part 9 is taken to have commenced immediately after the commencement of the Sales Tax Assessment Act 1992. (6) Part 10 is taken to have commenced immediately after the commencement of the Sales Tax (Exemptions and Classifications) Act 1992. PART 2 - AMENDMENT OF THE INCOME TAX ASSESSMENT ACT 1936 Division 1 - Principal Act TAXATION LAWS AMENDMENT ACT (No. 5) 1992 No. 224 of 1992 - SECT 3 Principal Act 3. In this Part, "Principal Act" means the Income Tax Assessment Act 1936.*1* *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. Division 2 - Amendments to improve the readability of the capital gains tax provisions TAXATION LAWS AMENDMENT ACT (No. 5) 1992 No. 224 of 1992 - SECT 4 Heading to Division 1 of Part IIIA 4. The heading to Division 1 of Part IIIA of the Principal Act is amended by omitting "Interpretation" and substituting "Preliminary". TAXATION LAWS AMENDMENT ACT (No. 5) 1992 No. 224 of 1992 - SECT 5 5. Before section 160A of the Principal Act the following Subdivision and heading are inserted: "Subdivision A - Object, simplified outline, example and index Object "160AX. The object of this Part is to provide for net capital gains to be included in assessable income (see section 160ZO). Simplified outline of scheme of Part (Simplified outline) "160AY.(1) The following is a simplified outline of the scheme of this Part. (Step 1 - disposal of an asset) "(2) This Part applies if a taxpayer disposes of an asset. For a basic definition of 'asset', see section 160A. The taxpayer must have acquired the asset on or after 20 September 1985 and the disposal of the asset must occur on or after that date (see section 160L). 160M is the basic provision defining 'disposal' and 'acquisition'. The timing of disposal and acquisition is dealt with by section 160U. There are various exemptions, including the principal residence exemption (see the Exemptions Sub Index in section 160AZA). There are also various provisions giving roll-over relief on the disposal of assets (see the Roll-overs Sub Index in section 160AZA). (Step 2 - disposal of asset may result in a capital gain or a capital loss) "(3) The disposal of the asset may result in a capital gain or capital loss (see section 160Z). Capital gain - asset owned for 12 months or more Consideration Indexed cost in respect of - base of = Capital gain disposal asset Capital gain - asset owned for less than 12 months Consideration Cost in respect of - base of = Capital gain disposal asset Capital loss Reduced cost Consideraton base of - in respect of = Capital loss asset disposal For a basic definition of 'consideration in respect of a disposal of an asset', see section 160ZD. For basic definitions of 'cost base', 'indexed cost base' and 'reduced cost base', see section 160ZH. The basic idea is that the cost base of an asset consists of the cost of acquiring the asset and certain other costs, the indexed cost base is the cost base indexed for inflation (see section 160ZJ) and the reduced cost base is the cost base adjusted to take account of certain capital deductions and balancing charges (see section 160ZK). (Step 3 - calculation of net capital gain) "(4) Capital gains and capital losses are netted under section 160ZC to work out the net capital gain. Example: Capital gains Capital losses accrued during - incurred during = Net capital gain year year (Step 4 - net capital gain to be included in assessable income under section 160ZO) "(5) The amount of the net capital gain is included in the taxpayer's assessable income under section 160ZO. Example of how this Part works (Typical example) "160AZ.(1) This section sets out an example of how this Part will work in a typical case involving the acquisition and disposal of an asset by a taxpayer. The taxpayer acquired the asset on 29 September 1985 for a cost of $100,000 and disposed of the asset on 29 September 1991 for $300,000. The cost base is $100,000. The indexed cost base is calculated as follows: 215.7 (index number for $149,600 $100,000 September 1991 quarter) (indexed = (cost X _____________________________ cost base) base) 144.2 (index number for September 1985 quarter) (The fraction on the right is rounded up to 1.496.) (Capital gain on disposal) "(2) There is a capital gain on disposal of the asset. Consideration in respect of Indexed cost disposal - base of asset = Capital gain $300,000 $149,600 $150,400 (Calculation of net capital gain) "(3) Assuming that the taxpayer has no capital losses, the net capital gain is $150,400. (Inclusion of net capital gain in assessable income under section 160ZO) "(4) The taxpayer's assessable income includes $150,400. Index of key concepts "160AZA. The following is an index of the key concepts relevant to the operation of this Part. Main Index Acquisition 160M Asset 160A Bankruptcy 160W Capital gain 160Z Capital loss 160Z Capital receipts 160M(6) and (7) Consideration in respect of disposal of asset 160ZD, 160ZF Controlled foreign companies, attribution of income Divisions 6, 7, 8 and 10 of Part X Cost base 160ZH Disposal 160M Employee's shares 160ZYHD to 160ZYJA Exemptions See Exemptions Sub Index below Indexed cost base 160ZH, 160ZJ Industrial property 160ZZD Joint owners 160ZN Leases 160ZR to 160ZW Life assurance companies Division 8 of Part III Net capital gain 160ZC, 160ZO Net capital loss 160ZC, 160ZO Net capital loss - transfer within company group 160ZP Non-residents 160L(2), 160M(8) to (14A), 160T Part of asset, disposal of 160R, 160ZI Personal-use assets 160B, 160ZE, 160ZG, 160ZQ Pooled superannuation trusts, units in 160ZYEB Prospecting and mining rights 160ZZE to 160ZZG Reduced cost base 160ZH, 160ZK Roll-overs See Roll-overs Sub Index below Securities lending arrangements 26BC Security - transfer by way of 160S - person enforcing 160V(2) Shares - bonus shares 160ZYF to 160ZYHC - buy-back of shares Division 16K of Part III - cancellation of Division 16J of Part III subsidiary's shares in holding company - return of capital 160ZL - valueless, of company 160WA in liquidation Superannuation funds, complying ADFs Division 10 of Part IX and PST Time of acquisition and disposal 160U Transitional 160ZZS, 160ZZT Trusts - accruals system of taxation Subdivision D of Division on certain non-resident 6AAA of Part III trust estates - bare trustee 160V(1) - bonus units in unit trusts 160ZYC to 160ZYEA - other than unit trusts 160ZX TO 160ZYB - return of capital on 160ZM investment Value shifting, adjustment of Division 19A of Part IIIA cost base Sub Index - Exemptions Approved deposit funds, rights under 160ZZJ Exemptions - general 160L, 160Z, 160ZB Goodwill 160ZZR, 160ZZRAA Insurance policies 160ZZH Life assurance policies 160ZZI Principal residence 160ZZQ Superannuation funds, rights under 160ZZJ Sub Index - Roll-overs Company group, transfer of asset 160ZZO within Convertible notes - companies 160ZYY to 160ZZB, 160ZZBE Convertible notes - unit trusts 160ZZBA to 160ZZBD, 160ZZBF Crown leases 160ZWA Death 160J, 160X, 160Y Incorporated association, conversion 160ZZPH to company incorporated under company law Involuntary disposal 160ZZK, 160ZZL Marriage, breakdown, transfer of 160ZZM, 160ZZMA assets upon Options generally 160ZZC Partnership assets, transfer of to 160ZZNA wholly owned company Prospecting and mining rights 160ZZF Shares - exchange of shares in the same company 160ZZP - exchange of shares in original 160ZZPC company for shares in interposed company - in specie distribution of 160ZZPF shares by trustee of public trading trust - options and rights to acquire 160ZZPAB unissued shares affected by share splits or share consolidations - options to shareholders to 160ZYR to 160ZYX acquire unissued shares - redemption or cancellation 160ZZPD of shares in original company in exchange for shares in interposed company - rights to acquire shares 160ZYK to 160ZYQ Statutory licence, renewal or 160ZZPE extension of Strata title conversion 160ZZPG Units - exchange of units in the 160ZZPAA same unit trust - exchange of units in a unit 160ZZPA trust for shares in a company - options and rights to 160ZZPAC acquire unissued units affected by unit splits or unit consolidations - options to unitholders to 160ZYXA to 160ZYXF acquire unissued units - redemption or cancellation 160ZZPB of units in a unit trust in exchange for shares in a company - rights to acquire units in 160ZYQA to 160ZYQF a unit trust Wholly owned company, transfer 160ZZN of asset to "Subdivision B - Interpretation". Division 3 - Amendments relating to tax-deductible gifts TAXATION LAWS AMENDMENT ACT (No. 5) 1992 No. 224 of 1992 - SECT 6 Re-location of subsection 51(7A) of the Principal Act (contributions to registered political parties) 6. The Principal Act is amended by re-locating and re-numbering subsection 51(7A) of the Principal Act so that: (a) it is located after subsection 78(1A) of the Principal Act; and (b) it becomes subsection 78(1B) of the Principal Act; and (c) its cross-reference to paragraph 78(1)(aaa) becomes a cross-reference to paragraph (1)(aaa). TAXATION LAWS AMENDMENT ACT (No. 5) 1992 No. 224 of 1992 - SECT 7 Gifts, pensions etc. 7. Section 78 of the Principal Act is amended: (a) by omitting from subparagraph (1)(a)(cvii) "register" and substituting "Register of Cultural Organisations"; (b) by inserting after subparagraph (1)(a)(cvii) the following subparagraphs: "(cviii) The Australia-United States Coral Sea Commemorative Council Inc.; (cix) a fund that, when the gift is made, is on the Register of Environmental Organisations kept under section 78AB;"; (c) by inserting after subsection (5) the following subsection: "(6) A deduction is not allowable under subparagraph (1)(a)(xliv), (xlvii), (lxxiii), (lxxiv) or (civ) for a gift made to an institution during the financial year commencing on 1 July 1993 or a later financial year unless, at the time the gift is made: (a) the institution has agreed to give to the Department of the Arts, Sport, the Environment and Territories, within a reasonable period after the end of the financial year, statistical data about gifts made to the institution during the financial year; and (b) the institution has a policy of not acting as a mere conduit for the donation of money or property to other institutions, bodies or persons."; (d) by inserting after subsection (6AK) the following subsection: "(6AL) A gift to the institution specified in subparagraph (1)(a)(cviii) is not an allowable deduction under this section unless the gift was made on or after 26 November 1991 and before 1 July 1992.". TAXATION LAWS AMENDMENT ACT (No. 5) 1992 No. 224 of 1992 - SECT 8 Register of Cultural Organisations 8. Section 78AA of the Principal Act is amended by omitting ", Tourism" from the definitions of "Arts Department" and "Arts Minister" in subsection (1). TAXATION LAWS AMENDMENT ACT (No. 5) 1992 No. 224 of 1992 - SECT 9 9. After section 78AA of the Principal Act the following section is inserted: Register of Environmental Organisations (Certification by Environment Minister) "78AB.(1) If the Environment Minister is satisfied that a body meets all of the eligibility criteria for registration as an environmental organisation set out in subsection (2), the Environment Minister must give a written certificate to the Treasurer stating that the body is eligible for registration under this section. (Eligibility criteria for registration) "(2) The eligibility criteria for registration of a body as an environmental organisation are as follows: (a) its principal purpose, or each of its principal purposes, must be an environmental purpose; (b) it must not pay any of its profits or financial surplus, or give any of its property, to its shareholders, members, beneficiaries, controllers or owners, as the case requires; (c) it must have a public fund (the 'gift fund'): (i) to which gifts of money or property for its environmental purpose or purposes are to be made; and (ii) to which any interest on money in the fund is to be credited; and (iii) to which money derived from the property given to the fund is to be paid; and (iv) that does not receive any other money or property; and (v) that is used only to support the body's environmental purpose or purposes; (d) it must have rules relating to its gift fund which provide that, in the event of the winding up of that fund, any surplus assets are to be transferred to another fund that is on the Register of Environmental Organisations; (e) it must agree to give to the Environment Department, within a reasonable period after the end of each financial year, statistical data about gifts to its gift fund during the financial year; (f) it must agree to comply with any rules made from time to time by the Environment Minister and the Treasurer to ensure that gifts to its gift fund are used only to support its environmental purpose or purposes; (g) it must have a policy of not acting as a mere conduit for the donation of money or property to other organisations, bodies or persons; (h) if the body is a body corporate (other than a statutory authority) or a co-operative society: (i) the membership of the body must consist wholly or principally of bodies corporate; or (ii) there must be at least 50 members of the body who are: (A) natural persons; and (B) regarded as financial members; and (C) entitled to vote at a general meeting of the body; or (iii) the Environment Minister determines that, because of special circumstances, the body does not have to meet either of the criteria set out in subparagraph (i) or (ii). (Environment Minister and Treasurer may direct registration of certified body) "(3) If the Environment Minister has given a certificate to the Treasurer stating that a body is eligible for registration under this section, the Environment Minister and the Treasurer may direct the Environment Department in writing to enter the body and its gift fund on the Register of Environmental Organisations on a specified day on or after the day on which the direction is given. (Government policies and budgetary priorities to be taken into account) "(4) In considering whether to give a direction, the Environment Minister and the Treasurer are to take into account the policies and budgetary priorities of the Commonwealth Government. (Register of Environmental Organisations to be kept) "(5) The Environment Department must keep a register, to be known as the Register of Environmental Organisations, listing such bodies and their gift funds as are required to be on the register because of this section. (Removal from Register of Environmental Organisations) "(6) The Environment Minister and the Treasurer may direct the Environment Department in writing to remove a body and its gift fund from the Register of Environmental Organisations on a specified day on or after the day on which the direction is given. (Definitions) "(7) In this section: 'body' means: (a) a body corporate; or (b) a co-operative society; or (c) a trust established by a deed or will; or (d) an unincorporated body established for a public purpose by the Commonwealth, a State or a Territory; 'environment' means natural environment, and includes all aspects of the natural surroundings of humans, whether affecting them as individuals or in social groupings; 'environmental purpose' means: (a) the protection and enhancement of the environment or of a significant aspect of the environment; or (b) a purpose relating to the dissemination of information, the provision of education, or the carrying on of research, about the environment or about a significant aspect of the environment; whether the environment concerned is in Australia or elsewhere; 'Environment Department' means the Department of the Arts, Sport, the Environment and Territories; 'Environment Minister' means the Minister for the Arts, Sport, the Environment and Territories; 'gift fund' has the meaning given by paragraph (2)(c); 'Register of Environmental Organisations' means the Register of Environmental Organisations required by subsection (5).". Division 4 - Amendments relating to provisional tax TAXATION LAWS AMENDMENT ACT (No. 5) 1992 No. 224 of 1992 - SECT 10 Interpretation 10. Section 221YA of the Principal Act is amended by omitting from subsection (1) the definition of "provisional tax uplift factor" and substituting the following definition: "'provisional tax uplift factor': (a) in relation to the 1992-93 year of income - means 8%; and (b) in relation to a later year of income - means, until the Parliament otherwise provides, 10%;". TAXATION LAWS AMENDMENT ACT (No. 5) 1992 No. 224 of 1992 - SECT 11 Uplifted provisional tax amount 11. Section 221YCAA of the Principal Act is amended by inserting in paragraphs (2)(m) and (q) "or 221YHZK" after "160AF". TAXATION LAWS AMENDMENT ACT (No. 5) 1992 No. 224 of 1992 - SECT 12 Additional tax where income under-estimated or where PAYE deductions over-estimated 12. Section 221YDB of the Principal Act is amended: (a) by omitting from subsections (1), (1AAA), (1AA) and (1ABA) "90%" (wherever occurring) and substituting "85%"; (b) by omitting from subsections (1AAA) and (1ABA) "110%" and substituting "115%". TAXATION LAWS AMENDMENT ACT (No. 5) 1992 No. 224 of 1992 - SECT 13 Application 13. The amendments made by this Division apply in relation to provisional tax (including instalments) payable for the 1992-93 year of income and for all later years of income. Division 5 - Amendments to increase zone rebates and related rebates TAXATION LAWS AMENDMENT ACT (No. 5) 1992 No. 224 of 1992 - SECT 14 Income of certain persons serving with an armed force under the control of the United Nations 14.(1) Section 23AB of the Principal Act is amended by omitting from subsection (7) "$270" and substituting "$304". (2) Section 23AB of the Principal Act is amended by omitting from subsection (7) "$304" and substituting "$338". TAXATION LAWS AMENDMENT ACT (No. 5) 1992 No. 224 of 1992 - SECT 15 Rebates for residents of isolated areas 15.(1) Section 79A of the Principal Act is amended: (a) by omitting from paragraph (2)(a) "$938" and substituting "$1,056"; (b) by omitting from paragraph (2)(d) "$270" and substituting "$304"; (c) by omitting from paragraph (2)(e) "$45" and substituting "$51". (2) Section 79A of the Principal Act is amended: (a) by omitting from paragraph (2)(a) "$1,056" and substituting "$1,173"; (b) by omitting from paragraph (2)(d) "$304" and substituting "$338"; (c) by omitting from paragraph (2)(e) "$51" and substituting "$57". TAXATION LAWS AMENDMENT ACT (No. 5) 1992 No. 224 of 1992 - SECT 16 Rebates for members of Defence Force serving overseas 16.(1) Section 79B of the Principal Act is amended by omitting from subsections (2), (4) and (4A) "$270" and substituting "$304". (2) Section 79B of the Principal Act is amended by omitting from subsections (2), (4) and (4A) "$304" and substituting "$338". TAXATION LAWS AMENDMENT ACT (No. 5) 1992 No. 224 of 1992 - SECT 17 Application 17.(1) The amendments made by subsections 14(1), 15(1) and 16(1) apply to assessments in respect of income of the 1992-93 year of income. (2) The amendments made by subsections 14(2), 15(2) and 16(2) apply to assessments in respect of income of the 1993-94 year of income and of all later years of income. Division 6 - Amendments relating to disposals and redemptions of traditional securities TAXATION LAWS AMENDMENT ACT (No. 5) 1992 No. 224 of 1992 - SECT 18 Redemption of special bonds redeemable at a premium 18. Section 23E of the Principal Act is amended by omitting from paragraph (2)(b) "and subsection 160ZB(6)". TAXATION LAWS AMENDMENT ACT (No. 5) 1992 No. 224 of 1992 - SECT 19 Deduction for loss on disposal or redemption of traditional securities 19. Section 70B of the Principal Act is amended by adding at the end the following subsections: "(4) If: (a) a taxpayer disposes of a traditional security or a traditional security of a taxpayer is redeemed; and (b) there is a loss on the disposal or redemption; and (c) in the case of a disposal or redemption of a marketable security: (i) the taxpayer did not acquire the security in the ordinary course of trading on a securities market; and (ii) at the time the taxpayer acquired the security, it was not open to the taxpayer to acquire an identical security in the ordinary course of trading on a securities market; and (d) in the case of a disposal of a marketable security - the disposal did not take place in the ordinary course of trading on a securities market; and (e) having regard to: (i) the financial position of the issuer of the security; and (ii) perceptions of the financial position of the issuer of the security; and (iii) other relevant matters; it would be concluded that the disposal or redemption took place for the reason, or for reasons that included the reason, that there was an apprehension or belief that the issuer was, or would be likely to be, unable or unwilling to discharge all liability to pay amounts under the security; a deduction is not allowable to the taxpayer under this section in respect of so much of the amount of the loss as is a loss of capital or a loss of a capital nature. "(5) A reference in this section to the disposal by a taxpayer of a security, or to the redemption of a security of a taxpayer, does not include a reference to the waiver or release by the taxpayer of: (a) the whole or a part of the debt the subject of the security; or (b) any other right of the taxpayer under the security. "(6) Subsection (5) does not, by implication, affect the meaning of an expression used in: (a) a provision of this Act other than this section; or (b) any other law of the Commonwealth. "(7) In this section: 'issuer', in relation to a security at a particular time, means the person who, if the amount or amounts payable under the security were due and payable at that time, would be liable to pay the amount or amounts; 'marketable security' means a traditional security that is covered by paragraph (a) of the definition of 'security' in subsection 159GP(1); 'securities market' means a market, exchange or other place at which, or a facility by means of which, offers to sell, purchase or exchange marketable securities are regularly made or accepted.". TAXATION LAWS AMENDMENT ACT (No. 5) 1992 No. 224 of 1992 - SECT 20 Exemption of certain gains or losses 20. Section 160ZB of the Principal Act is amended by omitting subsection (6). TAXATION LAWS AMENDMENT ACT (No. 5) 1992 No. 224 of 1992 - SECT 21 Application 21. The amendments made by this Division apply to disposals or redemptions of traditional securities on or after 1 July 1992. TAXATION LAWS AMENDMENT ACT (No. 5) 1992 No. 224 of 1992 - SECT 22 Transitional - subsection 70B(5) of the amended Act 22.(1) This section applies to disposals or redemptions before 1 July 1992. (2) Subsection 70B(5) of the Principal Act as amended by this Act is to be disregarded in determining the meaning of the expression "disposal" or "redemption", and other parts of speech of that expression, when used in: (a) a provision of the Principal Act; or (b) any other law of the Commonwealth. Division 7 - Amendments relating to live stock TAXATION LAWS AMENDMENT ACT (No. 5) 1992 No. 224 of 1992 - SECT 23 23. Section 32 of the Principal Act is repealed and the following sections are substituted: Live stock other than horse breeding stock - value at end of year of income (Option as to value) "32.(1) Subject to subsections (2) and (3), the value of live stock to be taken into account at the end of the year of income is to be, at the option of the taxpayer: (a) the cost price of the live stock; or (b) the market selling value of the live stock. (Adoption of other value) "(2) If the Commissioner is satisfied that there are circumstances which justify the adoption by the taxpayer of some other value, the taxpayer may adopt that other value. (Option not exercised - value is cost price) "(3) If the taxpayer does not exercise the option within the time prescribed, the value of the live stock to be taken into account at the end of the year of income is to be the cost price of the live stock. (This section does not apply to horse breeding stock) "(4) This section does not apply in determining the value of live stock to be taken into account at the end of the year of income if the live stock is horse breeding stock (within the meaning of section 32A) at the end of the year of income. Horse breeding stock - value at end of year of income (Section applies to horse breeding stock) "32A.(1) This section applies in determining the value of live stock to be taken into account at the end of the year of income if the live stock is horse breeding stock of the taxpayer at the end of the year of income. (Option as to value) "(2) Subject to subsections (3) and (4), the value of live stock to be taken into account at the end of the year of income is to be, at the option of the taxpayer: (a) the special closing value of the live stock in relation to the year of income; or (b) the cost price of the live stock; or (c) the market selling value of the live stock. (Adoption of other value) "(3) If the Commissioner is satisfied that there are circumstances which justify the adoption by the taxpayer of some other value, the taxpayer may adopt that other value. (Option not exercised - value is cost price) "(4) If the taxpayer does not exercise the option within the time prescribed, the value of the live stock to be taken into account at the end of the year of income is to be the cost price of the live stock. (What is horse breeding stock) "(5) For the purposes of this section, live stock is horse breeding stock of a taxpayer at the end of the year of income if, and only if: (a) the live stock is a horse acquired by the taxpayer under a contract; and (b) the horse has attained the age of 3 years before the end of the year of income; and (c) at the end of the year of income, the horse is held by the taxpayer for breeding purposes. (Special closing value) "(6) The special closing value of a horse in relation to a year of income is: (a) if the horse is a female horse which has attained the age of 12 years before the end of the year of income - $1; or (b) if the reduction amount in relation to the horse in relation to the year of income is equal to or greater than the opening value of the horse in relation to the year of income - $1; or (c) in any other case - the amount worked out using the formula: Opening value - Reduction amount where: 'Opening value' means the opening value in relation to the horse in relation to the year of income; 'Reduction amount' means the reduction amount in relation to the horse in relation to the year of income. (Opening value) "(7) For the purposes of this section, the opening value in relation to a horse in relation to a year of income (the 'current year of income') is: (a) if: (i) the horse was live stock of the taxpayer at the end of the year of income immediately preceding the current year of income; and (ii) the horse was live stock of the taxpayer during the whole of the current year of income; the value of the horse taken into account at the end of the preceding year of income; or (b) if the horse became live stock of the taxpayer at a time during the current year of income - whichever is the lesser of: (i) the cost price of the horse; or (ii) the depreciated value of the horse, within the meaning of section 62, at that time. (Reduction amount - male horse) "(8) For the purposes of this section, the reduction amount in relation to a male horse in relation to the year of income is the amount worked out using the formula: Holding days in year of income Base amount X Nominated percentage X ________________ Total days in year of income 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: Base amount Holding days in year of income _____________ X ______________________________ Reducing factor Total days in year of income 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).". TAXATION LAWS AMENDMENT ACT (No. 5) 1992 No. 224 of 1992 - SECT 24 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 TAXATION LAWS AMENDMENT ACT (No. 5) 1992 No. 224 of 1992 - SECT 25 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.". TAXATION LAWS AMENDMENT ACT (No. 5) 1992 No. 224 of 1992 - SECT 26 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;". TAXATION LAWS AMENDMENT ACT (No. 5) 1992 No. 224 of 1992 - SECT 27 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 TAXATION LAWS AMENDMENT ACT (No. 5) 1992 No. 224 of 1992 - SECT 28 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