Taxation Administration Act 1996 (NSW)

Taxation Administration Act 1996 No 97 An Act to make general provision with respect to the administration and enforcement of the other taxation laws. Part 1 Preliminary 1 Name of Act This Act is the Taxation Administration Act 1996. 2 Commencement This Act commences on a day or days to be appointed by proclamation. 3 Definitions (1) In this Act— assessment means an assessment made by the Chief Commissioner under Part 3 of the tax liability of a person under a taxation law, and includes— (a) a reassessment and a compromise assessment under Part 3, and (b) an assessment by the Supreme Court or the Civil and Administrative Tribunal on an application for a review. authorised officer means a person who is an authorised officer under section 68. Chief Commissioner means the Chief Commissioner referred to in section 60. Commissioner means the Commissioner referred to in section 64. exercise a function includes perform a duty. function includes a power, authority or duty. Hardship Review Board means the Hardship Review Board constituted under the State Debt Recovery Act 2018. investigation means an investigation under Division 2 of Part 9. premises includes land, a vehicle, a vessel and an aircraft. recognised revenue law has the meaning given by section 80A. record means— (a) a documentary record, or (b) a record made by an electronic, electromagnetic, photographic or optical process, or (c) any other kind of record. return means a return, statement, application, report or other record that— (a) is required or authorised under a taxation law to be lodged by a person with the Chief Commissioner or a specified person, and (b) is liable to tax or records matters in respect of which there is or may be a tax liability. review means a review by the Supreme Court, or an administrative review by the Civil and Administrative Tribunal, on an application made under Division 2 of Part 10. tax means a tax, duty, contribution or levy under a taxation law, and includes— (a) interest and penalty tax under Part 5, and (a1) a penalty under section 106KA, and (b) any other amount paid or payable by a taxpayer to the Chief Commissioner under a taxation law. tax debt—see section 44. taxation law has the meaning given by section 4. Note. See also section 5 (Application of Act to State tax-equivalent regime). tax default means a failure by a taxpayer to pay, in accordance with a taxation law, the whole or part of tax that the taxpayer is liable to pay. tax officer means— (a) the Chief Commissioner, or (b) the Commissioner, or (c) an authorised officer, or (d) any other person engaged (whether as an officer or employee or otherwise) in the administration or enforcement of a taxation law. taxpayer means a person who has been assessed as liable to pay an amount of tax, who has paid an amount as tax or who is liable or may be liable to pay tax. this jurisdiction means New South Wales. trustee includes— (a) a person who is a trustee under an implied or constructive trust, and (b) in relation to a deceased person—an executor of the will, or an administrator of the estate, of the deceased person, and (c) a receiver or manager of the property of a company, or a liquidator of a company for the purpose of its winding up, and (d) a receiver, guardian, committee or manager of the property of a person under a legal or other disability, and (e) a person having possession, control or management of a business or property of a person who is under a legal or other disability, and (f) any person acting in a fiduciary capacity. Note. The Interpretation Act 1987 contains definitions and other provisions that affect the interpretation and application of this Act. (2) Notes in the text of this Act do not form part of the Act. 4 Meaning of "taxation laws" The following are taxation laws for the purposes of this Act— this Act Betting Tax Act 2001 Duties Act 1997 Emergency Services Levy Act 2017 Gaming Machine Tax Act 2001 Health Insurance Levies Act 1982 Insurance Protection Tax Act 2001 Land Tax Act 1956 Land Tax Management Act 1956 Parking Space Levy Act 2009 Payroll Tax Act 2007 Payroll Tax Deferral (BlueScope Steel) Act 2015 Property Tax (First Home Buyer Choice) Act 2022 a regulation under any of those Acts. Note. The Fire and Emergency Services Levy Act 2017 applies parts of this Act to the levy payable under that Act if the responsibility for levy recovery is transferred to the Chief Commissioner or if the Chief Commissioner requires a waived amount of the levy to be repaid. The Fire and Emergency Services Levy Act 2017 also applies parts of this Act to the collection instalments payable by a council under that Act as if those instalments were a tax. In addition, some of the provisions of this Act apply to the contributions payable by councils under the following— (a) Part 5 of the Fire and Rescue NSW Act 1989, (b) Part 5 of the Rural Fires Act 1997, (c) Part 5A of the State Emergency Service Act 1989. 5 Application of Act to relevant tax-equivalent regime (1) For the purpose of the administration and enforcement of a relevant tax-equivalent regime, the provisions of section 5.3 of the Government Sector Finance Act 2018, and any other provisions of that Act or directions or regulations under that Act, insofar as they relate to the relevant tax-equivalent regime, are taken to be a taxation law. (2) To avoid doubt, amounts payable as tax-equivalents under a relevant tax-equivalent regime in accordance with section 5.3 of the Government Sector Finance Act 2018 are taxes for the purposes of this Act. (3) Part 10 (Objections and reviews) does not apply in respect of an assessment of liability under a relevant tax-equivalent regime under section 5.3 of the Government Sector Finance Act 2018. (4) In this section— relevant tax-equivalent regime has the meaning as in section 5.3 of the Government Sector Finance Act 2018. 5A Application of Act to community development levy (1) For the purpose of the administration and enforcement of the scheme for the levying and payment of the community development levy under the Aboriginal Land Rights Act 1983, Division 4A of Part 2 of that Act and any regulations made under that Division, are taken to be a taxation law. (2) To avoid doubt, amounts payable for the community development levy under that Act are taxes for the purposes of this Act (other than Part 4). 5B Application of Act to royalties (1) For the purpose of the administration and enforcement of legislative schemes for the payment of royalties to the Crown, the following provisions are taken to be taxation laws— (a) Part 14 of the Mining Act 1992, (b) Divisions 2 and 3 of Part 4.4 of the Offshore Minerals Act 1999, (c) the provisions of Division 7 of Part 4 of the Petroleum (Offshore) Act 1982 to the extent that those provisions relate to royalties under that Act, (d) Part 7 of the Petroleum (Onshore) Act 1991, (e) any other provisions of the Acts referred to in paragraphs (a)–(d), or of the regulations under those Acts, to the extent that they relate to royalties. (2) Royalty is taken to be a tax for the purposes of this Act. (3) In this section— royalty means royalty payable under— (a) the Mining Act 1992, or (b) the Offshore Minerals Act 1999, or (c) the Petroleum (Offshore) Act 1982, or (d) the Petroleum (Onshore) Act 1991. 5C Application of Act to passenger service levy (1) For the purpose of the administration and enforcement of the scheme for the levying and payment of the passenger service levy under the Point to Point Transport (Taxis and Hire Vehicles) Act 2016, Schedule 4 to that Act and any regulations made under that Schedule, are taken to be taxation laws. (2) To avoid doubt, amounts payable for the passenger service levy under that Act are taxes for the purposes of this Act (other than Division 2 of Part 7). 6 Act binds the Crown (1) This Act binds the Crown in right of this jurisdiction and, in so far as the legislative power of the Legislature of this jurisdiction permits, the Crown in all its other capacities. (2) This section does not affect the liability of the Crown to tax under another taxation law. Part 2 Purpose of Act and relationship with other taxation laws 7 Purpose of Act and relationship with other taxation laws (1) The purpose of this Act is to make general provision with respect to the administration and enforcement of the other taxation laws. (2) The other taxation laws include provisions with respect to— (a) the imposition of tax and its payment, and (b) exceptions to and exemptions from liability to the tax, and (c) entitlements to refunds. (3) This Act includes general provisions with respect to— (a) assessment and reassessment of tax liability, and (b) obtaining refunds of tax, and (c) imposition of interest and penalty tax, and (d) approval of special tax return arrangements, and (e) collection of tax, and (f) record keeping obligations of taxpayers and general offences, and (g) tax officers and their investigative powers and secrecy obligations, and (h) objections and reviews, and (h1) tax avoidance schemes, and (h2) the prohibition on the use of confidential tax information, and (i) miscellaneous matters such as service of documents, corporate criminal liability and evidence. Part 3 Assessment of tax liability 8 General power to make assessment (1) The Chief Commissioner may make an assessment of the tax liability of a taxpayer. (2) An assessment of a tax liability may consist of a determination that there is not a particular tax liability. (3) For the avoidance of doubt, an assessment of tax liability is taken to have been made when the Chief Commissioner calculates the tax liability of a taxpayer based on a return under the Payroll Tax Act 2007 or any other Act prescribed by the regulations for the purposes of this subsection (whether or not the Chief Commissioner issues a notice of assessment as a result of that calculation or otherwise notifies the taxpayer of the calculation). 9 Reassessment (1) The Chief Commissioner may make one or more reassessments of a tax liability of a taxpayer. (2) A reassessment of a tax liability is to be made in accordance with the legal interpretations and assessment practices generally applied by the Chief Commissioner in relation to matters of that kind at the time the tax liability arose except to the extent that any departure from those interpretations and practices is required by a change in the law (whether legislative or non-legislative) made after that time. (3) The Chief Commissioner cannot make a reassessment of a tax liability more than 5 years after the initial assessment of the liability, unless— (a) the reassessment is to adjust tax to give effect to a decision on an objection or review as to an assessment, or (b) at the time the initial assessment or a reassessment was made, all the facts and circumstances affecting the liability under the relevant taxation law of the person in respect of whom the assessment or reassessment was made were not fully and truly disclosed to the Chief Commissioner and, as a result, the tax liability was assessed at a lower amount, or (c) the reassessment is authorised to be made more than 5 years after the initial assessment by another taxation law, or (d) the reassessment is made as a consequence of an application by a taxpayer, being an application made within 5 years after the initial assessment of the liability, and the reassessment reduces the tax liability. (4) The initial assessment of a tax liability remains the initial assessment of the liability for the purposes of this Act even if it is withdrawn under section 13. 10 Requirement for full and true disclosure of relevant facts and circumstances (1) A person who is liable to pay tax under a taxation law must, before or at the time an assessment of the tax liability is made, fully and truly disclose to the Chief Commissioner all the facts and circumstances affecting the tax liability under the relevant taxation law. Maximum penalty—250 penalty units. Note. An offence against subsection (1) committed by a corporation is an executive liability offence attracting executive liability for a director or other person involved in the management of the corporation—see section 121. (2) A defendant is not guilty of an offence under this section if the defendant proves that the defendant reasonably relied on some other person to ensure that the requirements of this section were satisfied. 11 Information on which assessment is made (1) The Chief Commissioner may make an assessment on the information that the Chief Commissioner has from any source at the time the assessment is made. (2) If the Chief Commissioner has insufficient information to make an exact assessment of a tax liability, the Chief Commissioner may make an assessment by way of estimate. 12 Compromise assessment (1) The Chief Commissioner may make an assessment in accordance with this section— (a) if it is difficult or impracticable for the Chief Commissioner to determine a person's tax liability under a taxation law without undue delay or expense because of the complexity or uncertainty of the case or for any other reason, or (b) for the purpose of settling a dispute between the Chief Commissioner and a person concerning the person's tax liability (whether or not a previous assessment has been made). (2) The Chief Commissioner may, with the agreement of the taxpayer, assess liability in an amount specified in, or determined in accordance with, the agreement. (3) Despite section 9, the Chief Commissioner cannot make a reassessment of a tax liability assessed in accordance with this section— (a) except with the agreement of the taxpayer, or (b) unless the assessment under this section was procured by fraud or there was a deliberate failure to disclose material information. (4) (Repealed) (5) This section does not limit the power of the Chief Commissioner to make an assessment by way of estimate under section 11. 13 Withdrawal of assessment The Chief Commissioner may withdraw an assessment (being an assessment for which a notice of assessment has been issued) at any time within 5 years after the date of issue of the notice, whether or not the amount of tax specified in the assessment has been paid. 14 Notice of assessment, reassessment or withdrawal of assessment (1) The Chief Commissioner may issue a notice of assessment (showing the amount of the assessment). (2) If the Chief Commissioner has not issued a notice of assessment of the tax liability of a taxpayer, the Chief Commissioner must issue the notice if a request to do so is made by the taxpayer within 5 years after the liability arose. (3) If the Chief Commissioner makes a reassessment, the Chief Commissioner must issue a notice of assessment (showing the amount of the reassessment). (4) If the Chief Commissioner withdraws an assessment, the Chief Commissioner must issue a notice of withdrawal of assessment. (5) The notice is to be in a form approved by the Chief Commissioner. 15 Inclusion of interest and penalty tax in notice of assessment A notice of assessment of a taxpayer's tax liability issued following a tax default by the taxpayer must specify any interest and penalty tax payable by the taxpayer under Part 5 or section 95 in respect of the default. 16 Validity of assessment The validity of an assessment is not affected because a provision of a taxation law has not been complied with. 16A Land tax assessments—special provisions The validity of a land tax assessment for a land tax year (within the meaning of the Land Tax Management Act 1956) is not affected by an objection or appeal under the Valuation of Land Act 1916 in relation to a land tax assessment for a subsequent land tax year, even if the objection or appeal results in a change to a land valuation on which the earlier land tax assessment was partly based. Note. Under the Land Tax Management Act 1956 land tax assessments are based on an average value of land, being an average of the land value of the land in respect of the most recent 3 land tax years. This section prevents an objection to a land tax assessment from affecting the validity of previous land tax assessments that were based on one or 2 of the same land values. 17 Acceptance of money or return not necessarily an assessment The acceptance of money by the Chief Commissioner paid in connection with the lodging of a return or other document, or the acceptance of a return or other document, is not, only because of the acceptance, an assessment. 17A Valuation of property (1) The Chief Commissioner may, for the purpose of making an assessment of the tax liability of a taxpayer— (a) require the taxpayer, by written notice, to provide evidence of the value of property that the Chief Commissioner considers appropriate, or (b) obtain a valuation of property from a person the Chief Commissioner is satisfied is suitably qualified to provide evidence of the value of property, or (c) rely on a valuation of property prepared for any purpose by a person the Chief Commissioner is satisfied is suitably qualified to provide evidence of the value of property. (2) The Chief Commissioner may recover from the taxpayer the cost of obtaining a valuation of property under subsection (1)(b) if— (a) the value of the property in the valuation obtained by the Chief Commissioner differs from the value of the property provided by the taxpayer by at least 10%, or (b) the taxpayer fails to comply with a written notice given to the taxpayer under subsection (1)(a) within 60 days after the notice is issued. Part 4 Refunds of tax 18 Entitlement to refund (1) If a taxpayer has paid a greater amount of tax in relation to a tax liability than the amount assessed for that liability, the Chief Commissioner must refund the difference to the taxpayer, subject to this Part. (2) For the avoidance of doubt, it is declared that an amount by which tax is overpaid is taken to be tax for the purposes of this Part. 19 Offset of refund against other liability (1) Instead of making a refund to a taxpayer, the Chief Commissioner may apply the amount that would otherwise be refunded to meet any of the following— (a) a tax debt or any other amount payable by the taxpayer under a taxation law, (b) a grant debt (within the meaning of the State Debt Recovery Act 2018) payable by the taxpayer, whether or not a debt recovery order has been made under that Act against the taxpayer for the debt, (c) a referable debt (within the meaning of the State Debt Recovery Act 2018) payable by the taxpayer, but only if a debt recovery order has been made against the taxpayer for the debt, (d) a fine, within the meaning of the Fines Act 1996, payable by the taxpayer. (2) A refund may be credited towards a taxpayer's future liability, but only with the taxpayer's consent. 20 Windfalls—refusal of refund The Chief Commissioner may refuse to make a refund to a taxpayer if— (a) the relevant taxation law provides for the passing on of the tax to another person, and (b) the tax sought to be refunded has been passed on to another person, and (c) the Chief Commissioner is not satisfied that appropriate arrangements have been made to pass the tax sought to be refunded on to that other person. Part 5 Interest and penalty tax Division 1 Interest 21 Interest in respect of tax defaults (1) If a tax default occurs, the taxpayer is liable to pay interest on the amount of tax unpaid calculated on a daily basis from the end of the last day for payment until the day it is paid at the interest rate from time to time applying under this Division. (2) Interest is payable under this section in respect of a tax default that consists of a failure to pay— (a) penalty tax under Division 2, or (b) a penalty imposed under section 106KA. (3) Interest is not payable in respect of a failure to pay interest under this division. 22 Interest rate (1) The interest rate is the sum of— (a) the market rate component, and (b) the premium component. (2) The market rate component is— (a) unless an order is in force under paragraph (b), the Bank Accepted Bill rate rounded to the second decimal place (rounding 0.005 upwards), or (b) the rate specified for the time being by order of the Minister published in the Gazette. (3) The premium component is 8% per annum. (4) In this section, the Bank Accepted Bill rate in respect of any day within a period specified in Column 1 of the Table to this subsection is the monthly average yield of 90-day Bank Accepted Bills published by the Reserve Bank for the month specified in Column 2 of that Table opposite that period. Table Column 1 Column 2 Period Monthly average yield 1 January to 31 March the preceding November 1 April to 30 June the preceding February 1 July to 30 September the preceding May 1 October to 31 December the preceding August (5) If the monthly average yield of 90-day Bank Accepted Bills for a particular month is not published by the Reserve Bank before the beginning of the relevant period, it is taken to be the same as the last monthly average yield of 90-day Bank Accepted Bills published by the Reserve Bank before that month. 23 Liability to payment of small amounts of interest There is no liability imposed by a taxation law to pay an amount of interest if the amount is less than $20. 24 Interest rate to prevail over interest otherwise payable on a judgment debt If judgment is given by or entered in a court for an amount of unpaid tax (or an amount that includes an amount of unpaid tax), the interest rate determined in accordance with this Division continues to apply, to the exclusion of any other interest rate, until the tax is paid. 25 Remission of interest (1) The Chief Commissioner may remit interest. (2) The Chief Commissioner may issue guidelines setting out how interest must be remitted under this division. (3) If guidelines are issued, interest must be remitted only in accordance with the guidelines. (4) The imposition or remission of penalty tax is not relevant to the imposition or remission of interest. Division 2 Penalty tax 26 Penalty tax in respect of certain tax defaults (1) If a tax default occurs, the taxpayer is liable to pay penalty tax in addition to the amount of tax unpaid. (2) Penalty tax imposed under this Division is in addition to interest. (3) Penalty tax is not payable in respect of a tax default that consists of a failure to pay— (a) interest under Division 1, or (b) penalty tax previously imposed under this division, or (c) a penalty imposed under section 106KA. 27 Amount of penalty tax (1) The amount of penalty payable for a tax default is, subject to this Division— (a) 25% of the amount of tax unpaid, or (b) if the taxpayer is a significant global entity within the meaning of the Income Tax Assessment Act 1997 of the Commonwealth—50% of the amount of tax unpaid. (2) The Chief Commissioner may increase the amount of penalty tax payable in respect of a tax default to 75% of the amount of tax unpaid if the Chief Commissioner is satisfied that the tax default was caused wholly or partly by the intentional disregard by the taxpayer (or a person acting on behalf of the taxpayer) of a taxation law. (3) The Chief Commissioner may determine that no penalty tax is payable in respect of a tax default if the Chief Commissioner is satisfied that— (a) the taxpayer (or a person acting on behalf of the taxpayer) took reasonable care to comply with the taxation law, or (b) the tax default occurred solely because of circumstances beyond the taxpayer's control (or if a person acted on behalf of the taxpayer, because of circumstances beyond either the person's or the taxpayer's control) but not amounting to financial incapacity. 28 Reduction in penalty tax for disclosure before investigation (1) The amount of penalty tax determined under section 27 is to be reduced by 80% if, before the Chief Commissioner informs the taxpayer that an investigation relating to the taxpayer is to be carried out, the taxpayer discloses to the Chief Commissioner, in writing, sufficient information to enable the nature and extent of the tax default to be determined. (2) This section does not apply in respect of information disclosed by a taxpayer if the taxpayer is registered under a taxation law and— (a) the tax default involved a failure to lodge a return as required under that taxation law, or (b) the tax default involved a failure to pay tax by the date required under that taxation law. 29 Reduction in penalty tax for disclosure during investigation (1) The amount of penalty tax determined under section 27 is to be reduced by 20% if, after the Chief Commissioner informs the taxpayer that an investigation relating to the taxpayer is to be carried out and before it is completed, the taxpayer discloses to the Chief Commissioner, in writing, sufficient information to enable the nature and extent of the tax default to be determined. (2) This section does not apply in respect of information disclosed by a taxpayer if the taxpayer is registered under a taxation law and— (a) the tax default involved a failure to lodge a return as required under that taxation law, or (b) the tax default involved a failure to pay tax by the date required under that taxation law. 30 Increase in penalty tax for concealment (1) The amount of penalty tax determined under section 27 is to be increased by 20% if, after the Chief Commissioner has informed the taxpayer that an investigation is to be carried out and before the investigation is completed, the taxpayer took steps to prevent or hinder the Chief Commissioner from becoming aware of the nature and extent of the tax default in whole or part. (2) For the purposes of this section, a taxpayer takes steps to prevent or hinder the Chief Commissioner if the taxpayer— (a) deliberately damages or destroys records required to be kept under the taxation law to which the investigation relates, or (b) refuses or fails (without reasonable excuse) to comply with a requirement made by the Chief Commissioner under Division 2 of Part 9 for the purposes of determining the taxpayer's tax liability, or (c) hinders or obstructs an authorised officer exercising functions under that Division for that purpose. Note. This Table contains a summary of the provisions of sections 27–30. Penalty category Prime rate Voluntary disclosure Concealment or hindrance in establishing underpayment % % Before investigation During investigation % % Failure to take reasonable care but no intentional disregard of the law 25 5 20 30 Failure to take reasonable care, but no intentional disregard of the law, by significant global entity 50 10 40 60 Intentional disregard of the law 75 15 60 90 31 Minimum amount of penalty tax Penalty tax is not to be imposed if the amount of the penalty tax is less than $20. 32 Time for payment of penalty tax Penalty tax must be paid by a taxpayer within the period specified for that purpose in a notice of assessment of the tax liability of the taxpayer, being a period of not less than 14 days. 33 Remission of penalty tax (1) The Chief Commissioner may, in such circumstances as the Chief Commissioner considers appropriate, remit penalty tax by any amount. (2) The imposition or remission of interest is not relevant to the imposition or remission of penalty tax. 33A Penalty tax relief (1) The Chief Commissioner may, in a way the Chief Commissioner thinks fit, publish guidelines on the circumstances in which, or the grounds on which, the Chief Commissioner may determine that no penalty tax is payable in relation to a tax default (penalty tax relief guidelines). (2) If the Chief Commissioner publishes penalty tax relief guidelines, the Chief Commissioner may determine that no penalty tax is payable in relation to a tax default after considering the guidelines. (3) This section does not affect section 27(3). Part 6 Returns Division 1 General 34 Form of returns A return is to be in a form approved by the Chief Commissioner. 35 Time of lodgment A return is taken to have been lodged by a person at the time the return is served on the Chief Commissioner. 36 Extending time or period for lodgment The Chief Commissioner may extend the time or period for lodgment of a return by a person. Division 2 Approval of special tax return arrangements 37 Approval of special tax return arrangements (1) Despite the provisions of another taxation law, the Chief Commissioner may, by written notice, give approval for a special arrangement for the lodging of returns and payment of tax under the taxation law to— (a) a specified taxpayer, or (b) a specified agent or other person on behalf of a specified taxpayer, a specified class of taxpayers or taxpayers for whom that agent or other person is authorised to act, or (c) any other specified person who is a party to a transaction or class of transactions in respect of which a liability for tax arises. (2) An approval, among other things— (a) may provide an exemption for the taxpayer or taxpayers from specified provisions of the taxation law to which it applies, and (b) may authorise the lodging of returns and payments of tax by electronic means. (3) An approval may be given on the initiative of the Chief Commissioner or on application. (4) The calculation of tax by a person other than the Chief Commissioner in accordance with a special arrangement approved under this section is not an assessment. (5) For the purposes of this Division, an arrangement approved under this section is a special arrangement and the person to whom the approval is given is an approval holder. (6) A special arrangement does not transfer a taxpayer