INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART VI - COLLECTION AND RECOVERY OF TAX  

Division 3 - Provisional tax  

Subdivision A - General provisions  

SECTION 221YDA   PROVISIONAL TAX ON ESTIMATED INCOME  

221YDA(1)   [Furnishing of estimate]  

A taxpayer who receives:

(a) a notice of assessment on which is notified the amount of provisional tax payable in respect of the income of a year of income (including an accounting period adopted by the taxpayer under this Act); or

(b) an instalment notice in respect of an instalment of provisional tax for a year of income (including an accounting period adopted by the taxpayer under this Act);

may, not later than:

(ba) where paragraph (a) applies:

(i) the due date for the payment of the tax notified by the notice referred to in that paragraph; or

(ii) 31 March in the year of income or, in the case of an accounting period, the last day of the ninth month of that accounting period;

whichever is the later; or

(bb) where paragraph (b) applies - the due date for payment of the instalment notified by the instalment notice;

or within such further time as the Commissioner may allow, make an estimate of:

(c) the amount of his taxable income for the whole of that year of income; and

(d) the respective amounts included in that estimated taxable income that represent:

(i) salary or wages;

(ia) (Omitted by No 103 of 1983)

(ii) income derived from the carrying on of a business of primary production; and

(iii) other income; and

(daaa) the amount of the reportable payments from which deductions have been, or will be, made in accordance with Division 1AA during that year of income; and

(daa) the amount of the prescribed payments from which deductions have been, or will be, made in accordance with Division 3A during that year of income; and

(dab) the taxpayer's taxable professional income and average taxable professional income for the year of income for the purposes of Division 405 of the Income Tax Assessment Act 1997 (which deals with above-average special professional income); and

(da) the sum of the rebates to which he will be entitled in his assessment in respect of income of that year of income under subsection 23AB(7) , under section 79A or 79B , under Subdivision A (other than section 159N or to which subsection 159J(1C) applies), AAC or AB of Division 17 of Part III or under section 160AAAA , 160AAAB , 160AAA , 160AAB , 160AB , 160ACE , 160AQU , 160AQX , 160AQY , 160AQYA or 160AQZ ; and

(db) the sum of the credits to which the taxpayer will be entitled in respect of that year of income under section 160AF or 221YHZK ; and

(dba) the amount of the deductions that have been, and will be, made under Division 1AA from reportable payments that have been, and will be, made to the taxpayer during the year of income; and

(e) the amount of the deductions which have been and will be made from his salary or wages during that year of income in accordance with sections 221C and 221D ; and

(f) the amount of the deductions that have been, and will be, made under Division 3A from prescribed payments that have been, and will be, made to him during the year of income; and

(g) the amount by which the amount of $6,000 set out in column 1 of the table in clause 1 of Part 1 of Schedule 7 to the Income Tax Rates Act 1986 is taken to be increased by sections 20C and 20D of that Act or would, apart from sections 20E , 20F and 20H of that Act, be taken to be so increased;

and furnish to the Commissioner a statement, in the form provided by the Commissioner for the purpose, showing the amounts so estimated together with such other information as is specified in the form.

221YDA(1AAA)   [First instalment estimate]  

Where:

(a) a taxpayer furnishes an instalment estimate (in this subsection referred to as the ``first instalment estimate'' ) in relation to the first instalment of provisional tax for a year of income;

(b) the varied provisional tax amount determined in relation to the first instalment estimate, as at the instalment notice date in relation to the second instalment, is greater than nil; and

(c) the amount calculated under subsection (2) in relation to the first instalment estimate as the amount that would, but for subsection 221YBA(5) , be the provisional tax payable by the taxpayer in respect of the income of the year of income is not the same as the amount that would have been calculated under that subsection in relation to the first instalment estimate if the calculation had been made on the instalment notice date in relation to the second instalment;

for the purposes of the application of this Division in relation to the second instalment and any subsequent instalment for the year of income, the first instalment estimate shall be taken not to have been furnished.

221YDA(1AA)   [Assumption re estimate]  

Any estimate made for the purposes of this section of the taxable income of a taxpayer for a year of income shall be based on the following assumptions:

(a) the assumption that the taxpayer's assessable income of the year of income will not include any net capital gain;

(b) the assumption that no amount will be included in the taxpayer's assessable income of the year of income under section 26AJ .

221YDA(1A)    

221YDA(2)   [Calculation of amount payable]  

Where, in relation to a year of income, a taxpayer duly furnishes to the Commissioner a statement under subsection (1), the amount of provisional tax payable by the taxpayer in respect of the income of that year of income is, subject to subsection (4), an amount ascertained:

(a) by calculating the amount of tax that would be payable in respect of the income of the year of income if:

(i) the taxable income of the year of income were an amount equal to the estimated taxable income and included the amounts of salary or wages, of income derived from the carrying on of a business of primary production and of other income included in that estimated taxable income; and

(ii) the sum of the rebates under subsection 23AB(7) , under section 79A or 79B , under Subdivision A (other than section 159N or to which subsection 159J(1C) applies), AAC or AB of Division 17 of Part III or under section 160AAAA , 160AAAB 160AAA, 160AAB, 160AB, 160ACE, 160AQU, 160AQX, 160AQY, 160AQYA or 160AQZ to which the taxpayer was entitled in his assessment in respect of income of the year of income were an amount equal to the estimated sum of those rebates; and

(iii) the taxpayer's taxable professional income and average taxable professional income for the year of income for the purposes of Division 405 of the Income Tax Assessment Act 1997 (which deals with above-average special professional income) were those amounts as shown in the statement; and

(iv) the amount of $6,000 set out in column 1 of the table in clause 1 of Part 1 of Schedule 7 to the Income Tax Rates Act 1986 were taken by sections 20C and 20D of that Act to be increased by the estimated amount shown in the statement or would, apart from sections 20E , 20F and 20H of that Act, be taken to be so increased; and

(b) by deducting from the amount calculated in accordance with paragraph (a):

(i) so much of the estimated amounts of credits referred to in paragraph (1)(db), as shown in the statement, as is estimated by the Commissioner to represent credits to which the taxpayer is, or will be, entitled under section 160AF or 221YHZK , as the case may be; and

(ii) so much of the estimated amounts of deductions referred to in paragraphs (1)(dba), (e) and (f), as shown in the statement, as is estimated by the Commissioner to represent deductions that have been, and will be, made in accordance with Division 1AA , sections 221C and 221D , or Division 3A , as the case may be.

221YDA(2AA)   [Calculation of tax: two instalment estimates furnished]  

Where:

(a) a taxpayer furnishes an instalment estimate in relation to an instalment of provisional tax for a year of income; and

(b) the taxpayer furnishes an instalment estimate in relation to a subsequent instalment of provisional tax for the year of income;

subsection (2) applies in relation to the instalment estimate referred to in paragraph (b):

(c) with effect from the date of furnishing of the instalment estimate referred to in paragraph (b); and

(d) notwithstanding the application of that subsection in relation to the instalment estimate referred to in paragraph (a).

221YDA(2AB)   [Calculation of tax where instalment estimate furnished]  

Where a taxpayer furnishes an instalment estimate in relation to an instalment of provisional tax, the amount payable by the taxpayer as that instalment is the amount that would have been payable if the applicable provisional tax amount had been ascertained:

(a) where subsection (4) applies in relation to the instalment estimate - as at the day after the date on which a notice is served on the taxpayer under that subsection; or

(b) in any other case - as at the day after the date of furnishing of the instalment estimate;

instead of as at the instalment notice date.

221YDA(2AC)   [Further time for instalment estimate]  

For the purposes of section 221YDB , where, under subsection (1) of this section, the Commissioner has allowed a further time for the furnishing by a taxpayer of an instalment estimate under that subsection in respect of an instalment, that instalment shall be deemed to have become due and payable by the taxpayer on the date specified in paragraph (1)(bb).

221YDA(2A)   [Due date where further time for estimate]  

For the purposes of the general interest charge under section 221YD , where, in pursuance of subsection (1) of this section, the Commissioner has allowed a further time for the furnishing by a taxpayer of a statement under that subsection in relation to income of a year of income, the provisional tax that becomes due and payable by the taxpayer in respect of income of the year of income shall be deemed to have become due and payable by the taxpayer on the date applicable under paragraph (1)(ba).

Note:

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

221YDA(3)   [Due date]  

Where provisional tax is payable in accordance with subsection (2) that provisional tax is, notwithstanding the provisions of section 221YD , due and payable on the date that is the date not later than which a taxpayer is permitted to furnish a statement under subsection (1).

221YDA(3A)   [Due date of instalment payment]  

Where an instalment of provisional tax is payable by a taxpayer in accordance with subsection (2AB), that instalment is, notwithstanding section 221YD , due and payable on the date that is the date not later than which the taxpayer was permitted to furnish the statement under subsection (1) in relation to that instalment.

221YDA(4)   [Low estimate]  

Where the Commissioner has reason to believe that the taxable income which will be or has been derived by a taxpayer in a year of income is greater than the amount that, but for section 221YHAAC or 221YHAAD , is the amount of the estimated taxable income, the Commissioner may:

(a) estimate the respective amounts which, in his opinion, should have been the amounts estimated by the taxpayer in pursuance of subsection (1) in respect of that year of income;

(b) calculate the amount of provisional tax that would be payable if the amount so estimated had been shown in a statement duly furnished by the taxpayer under subsection (1) and, if section 221YHAAC or 221YHAAD applies in relation to the taxpayer in relation to the year of income, the amount so estimated had been increased in accordance with whichever of those sections is applicable; and

(c) serve on the taxpayer notice in writing specifying the amount of provisional tax so calculated;

and the amount of provisional tax so specified is the amount of provisional tax payable by the taxpayer.

221YDA(4A)   [Notice of increased instalment]  

Where subsection (4) applies in relation to an instalment estimate furnished by a taxpayer in respect of an instalment of provisional tax, the notice served on the taxpayer under that subsection shall specify the amount that, by virtue of subsection (2AB), is the amount payable by the taxpayer as that instalment.

221YDA(5)   [Commissioner's estimate]  

The amount estimated by the Commissioner in accordance with subsection (4) as the amount of the taxable income of the taxpayer shall not be greater than the taxable income of the taxpayer for the year last preceding the year of income and the amount so estimated by the Commissioner as the amount of salary or wages, of income derived from the carrying on of a business of primary production or of other income shall not be greater than the amount of the salary or wages, the income derived from the carrying on of a business of primary production or the other income, as the case may be, derived by the taxpayer in the year last preceding the year of income.

221YDA(6)   [Notice of additional tax due]  

A notice under subsection (4) shall state the amount of any additional provisional tax that becomes payable by reason of the operation of that subsection and shall specify a date as the due date for the payment of that additional provisional tax, being a date not less than 14 days after the date of service of the notice, and the amount of additional provisional tax so stated is, notwithstanding the provisions of section 221YD , due and payable on that date.

221YDA(6A)   [Due date of increased instalment]  

Where subsection (4) applies in relation to an instalment estimate furnished by a taxpayer in respect of an instalment of provisional tax, the notice served on the taxpayer under that subsection shall state the amount of any increase in that instalment that becomes payable by reason of the operation of that subsection and shall specify a date as the due date for the payment of that increase, being a date not less than 14 days after the date of service of the notice, and the amount of the increase so stated is, notwithstanding subsection (3A), due and payable on that date.

221YDA(7)    

221YDA(8)   [Reference to provisional tax payable]  

A reference in this section (other than paragraph (1)(a) or subsection (2A), (3) or (6)) to the amount of provisional tax payable by a taxpayer includes a reference to the amount that, but for subsection 221YBA(5) , would be the provisional tax payable by the taxpayer.

221YDA(9)   [HEC debt to be taken into account]  

If this section applies for the purpose of determining the provisional tax payable by a taxpayer in respect of income of a year of income, the Commissioner may make such assumptions as the Commissioner thinks appropriate as to any matters that are likely to affect:

(a) the liability of the taxpayer to pay, in respect of that year of income, an amount in respect of an accumulated HEC debt under the Higher Education Funding Act 1988 ; or

(b) the amount in respect of that debt that is properly payable by the taxpayer.