INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART VI - COLLECTION AND RECOVERY OF TAX  

Division 3 - Provisional tax  

Subdivision A - General provisions  

SECTION 221YBA   LIABILITY TO PAY INSTALMENTS OF PROVISIONAL TAX  

221YBA(1)   [Application]  

This section applies in relation to the year of income commencing on 1 July 1987 and all subsequent years of income (except the 2000-01 year of income and later income years).

Note:

For the 2000-01 income year you may be liable to pay PAYG instalments: see Division 45 in Schedule 1 to the Taxation Administration Act 1953 .

221YBA(2)   [Primary producers, authors, inventors]  

Nothing in this section requires the payment of instalments of provisional tax by a taxpayer in respect of income of a year of income, being:

(a) the taxpayer's taxable primary production income worked out under section 392-80 of the Income Tax Assessment Act 1997 (Working out your taxable primary production income); or

(b) the above-average special professional income included in the taxpayer's taxable income under section 405-15 of the Income Tax Assessment Act 1997 .

221YBA(3)   [Number of instalments payable]  

Subject to this section, where, but for subsection (5) of this section, a taxpayer would be liable under section 221YB to pay provisional tax in respect of the income of a year of income, the taxpayer is liable to pay, in respect of that income:

(a) where the year of income is the year of income commencing on 1 July 1987 and paragraph (c) does not apply - 3 instalments of provisional tax;

(b) where the year of income is a subsequent year of income and paragraph (c) does not apply - 4 instalments of provisional tax; or

(c) where the taxpayer satisfies the Commissioner that more than 75% of the taxpayer's assessable income of the year of income will be derived after 1 December in the year of income - 2 instalments of provisional tax.

221YBA(4)   [Instalment notice required]  

An instalment of provisional tax is not payable unless the Commissioner has served an instalment notice in respect of the instalment.

221YBA(5)   [Effect of payment by instalments]  

Where instalments of provisional tax are payable by a taxpayer in respect of the income of a year of income, provisional tax is not payable by the taxpayer in respect of that income under section 221YB .

221YBA(6)   [Superseded instalments]  

Where:

(a) an instalment notice is served on a taxpayer in respect of an instalment (in this subsection referred to as the ``superseded instalment'' ) of provisional tax for a year of income;

(b) paragraph (3)(c) did not apply as at the instalment notice date; and

(c) the Commissioner becomes satisfied as mentioned in paragraph (3)(c) at a time after the instalment notice date,

the following provisions have effect:

(d) subject to paragraph (g), the superseded instalment shall be deemed never to have been payable;

(e) the taxpayer is not liable to pay instalments as mentioned in paragraph (3)(a) or (b);

(f) the taxpayer is liable to pay instalments as mentioned in paragraph (3)(c);

(g) if the day on which the first instalment payable by the taxpayer as mentioned in paragraph (3)(c) is due and payable (in this paragraph referred to as the ``new instalment day'' ) is a later day than whichever day (in this paragraph referred to as the ``previous instalment day'' ) is the later of the following days:

(i) 1 February in the year of income;

(ii) the day on which the superseded instalment was due and payable, or would, but for paragraph (d), have been due and payable,

the general interest charge under section 221YD applies as if:

(iii) the superseded instalment had become due and payable on the previous instalment day; and

(iv) so much of the superseded instalment as remained unpaid on the new instalment day had been paid on the new instalment day;

(h) if the taxpayer has paid an amount in respect of the superseded instalment, the taxpayer is entitled to a credit equal to the amount so paid.

Note:

The general interest charge is worked out under Division 1 of Part IIA of the Taxation Administration Act 1953 .

221YBA(7)   [``assessable income''; time derived]  

For the purposes of paragraph (3)(c):

(a) ``assessable income'' does not include:

(i) salary or wages;

(ii) a prescribed payment from which a deduction has been, or in the opinion of the Commissioner will be, made under Division 3A ; or

(iii) a net capital gain; and

(b) an amount that:

(i) is included in the assessable income of a taxpayer of a year of income under subsection 92(1) or Division 6 of Part III ;

(ii) is derived by a taxpayer during, but not at a particular time during, a year of income; or

(iii) is income from property (not being income to which subparagraph (i) applies) derived by a taxpayer during a year of income from an associate of the taxpayer,

shall be taken to have been derived by the taxpayer at such time, or at such times and in such proportions, as the Commissioner considers reasonable having regard to:

(iv) where subparagraph (i) applies in respect of a partnership or a trust estate - the time, or the times, when income was derived by the partnership or by the trustee of the trust estate, as the case may be;

(v) where subparagraph (iii) applies - the time, or the times, when income was derived by the associate; and

(vi) in any case - any relevant matters.

221YBA(8)   [Time partnership, trust income derived for instalment purposes]  

For the purposes of the application of subparagraph (7)(b)(iv) and this subsection in relation to a taxpayer in relation to a partnership or a trust estate:

(a) where:

(i) the partnership or the trustee of the trust estate, as the case may be, derives income directly or indirectly under or as a result of an arrangement (whether entered into or carried out before or after the commencement of this section); and

(ii) the Commissioner is of the opinion that the person, or one of the persons, who entered into or carried out the arrangement or any part of the arrangement did so for the purpose of securing the application of paragraph (3)(c) in relation to the taxpayer or in relation to the taxpayer and another taxpayer or other taxpayers (whether or not that person who entered into or carried out the arrangement or any part of the arrangement is the taxpayer or is the other taxpayer or one of the other taxpayers),

the Commissioner may treat the income as having been derived at such time, or at such times and in such proportions, as the Commissioner considers would have been, or might reasonably be expected to have been, the case if the arrangement had not been entered into or carried out; and

(b) income from property that was derived by the partnership or the trustee of the trust estate, as the case may be, during a year of income from an associate of the partnership or of the trustee shall be taken to have been derived by the partnership or trustee at such time, or at such times and in such proportions, as the Commissioner considers reasonable having regard to:

(i) the time, or the times, when income was derived by the associate; and

(ii) any other relevant matters.

221YBA(9)   [``arrangement'']  

For the purposes of subsection (8):

(a) ``arrangement'' means:

(i) any agreement, arrangement, understanding, promise or undertaking, whether express or implied, and whether or not enforceable, or intended to be enforceable, by legal proceedings; and

(ii) any scheme, plan, proposal, action, course of action or course of conduct, whether unilateral or otherwise;

(b) a reference to the carrying out of an arrangement by a person includes a reference to the carrying out of an arrangement by a person together with another person or other persons; and

(c) a reference to an arrangement or a part of an arrangement being entered into or carried out by a person for a particular purpose shall be read as including a reference to the arrangement or the part of the arrangement being entered into or carried out by the person for 2 or more purposes of which that particular purpose is the dominant purpose.

221YBA(10)   [``associate'']  

In this section, ``associate'' has the same meaning as in section 26AAB .

221YBA(11)