INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART VI - COLLECTION AND RECOVERY OF TAX  

Division 1B - Collection of tax on companies and trustees of certain funds  

SECTION 221AZB   NOTIONAL TAX  

221AZB(1)   [Effect of section]  

This section has effect subject to section 221AZC .

221AZB(2)   [Amount of notional tax]  

Subject to this section, the notional tax of a relevant entity in respect of a year of income is an amount equal to the income tax assessed in respect of the entity's taxable income of the next preceding year of income.

221AZB(3)   [References to income tax assessed]  

A reference in subsection (2) to the income tax assessed in respect of a relevant entity's taxable income of a year of income is, in the case of a relevant entity that is a company whose assessable income of that year of income included a net capital gain within the meaning of Part IIIA , to be taken to be a reference to:

(a) in the case of a company other than a life assurance company or a registered organisation - the income tax that would have been assessed in respect of the amount that would have been the taxable income of that company of that year of income if that net capital gain had not been included; and

(b) in the case of a life assurance company - the sum of:

(i) the income tax assessed in respect of the CS/RA component of the company's taxable income of that year of income; and

(ii) in relation to each of the NCS component, the general fund component (if any) and the AD/RLA component of the company's taxable income of that year of income:

(A) if the part of the company's assessable income of that year of income to which that component relates included a net capital gain within the meaning of Part IIIA - the income tax that would have been assessed in respect of the amount that would have been that component if that net capital gain had not been included; or

(B) otherwise - the income tax assessed in respect of that component; and

(c) in the case of a registered organisation - the sum of:

(i) the amount of the income tax assessed in respect of the CS/RA component of the organisation's taxable income of that year of income; and

(ii) in relation to each of the NCS component and the EIB component of the organisation's taxable income of that year of income:

(A) if the part of the organisation's assessable income of that year of income to which that component relates included a net capital gain within the meaning of Part IIIA - the income tax that would have been assessed in respect of the amount that would have been that component if that net capital gain had not been included; or

(B) otherwise - the income tax assessed in respect of that component.

221AZB(4)   [Variation of notional tax]  

Where:

(a) the rates of income tax payable by a class of relevant entities for a financial year are different from the rates declared by the Parliament for the next succeeding financial year; and

(b) provision is made by the regulations for varying the amount of notional tax of such entities in respect of the year of income to the income of which the last-mentioned rates apply;

then, on and after such date as is prescribed, the notional tax of such an entity in respect of that year of income is the amount ascertained in accordance with subsections (2) and (3) as varied in accordance with the provision so made by the regulations.