Taxation Administration Act 1953
Note: See section 3AA .
Chapter 4 - Generic assessment, collection and recovery rulesReasonable mistake or reasonable precautions
290-55(1)
The Federal Court of Australia must not order the entity to pay a civil penalty if the entity satisfies the Court: (a) that the conduct in respect of which the proceedings were instituted was due to a reasonable mistake of fact; or (b) that:
(i) the conduct in respect of which the proceedings were instituted was due to the act or default of another entity, to an accident or to some other cause beyond the entity ' s control; and
(ii) the entity took reasonable precautions and exercised due diligence to avoid the conduct.
290-55(2)
The other entity referred to in paragraph (1)(b) does not include someone who was an employee or agent of the entity when the alleged conduct occurred.
[ CCH Note: S 290-55(2) will be substituted by No 37 of 2024, s 3 and Sch 1 item 19, applicable in relation to conduct engaged in on or after 1 July 2024. S 290-55(2) will read:
]
290-55(2)
The other entity referred to in paragraph (1)(b) does not include:
(a) someone who was an employee or agent of the entity when the alleged conduct occurred; or
(b) if the entity is a body corporate - someone who was a director of the entity when the alleged conduct occurred; or
(c) if the entity is a partner in a partnership - someone who was also a partner in the partnership when the alleged conduct occurred; or
(d) if the entity is a trustee of a trust that has more than one trustee - someone who was also a trustee of the trust when the alleged conduct occurred.
Reliance on advice from the Commissioner
290-55(3)
The Commissioner must not make an application under section 290-50 for conduct referred to in subsection 290-50(1) in relation to an entity ' s involvement in a *scheme if: (a) the scheme is based on treating a *taxation law as applying in a particular way; and (b) that way agrees with:
(i) advice given to the entity or the entity ' s agent by or on behalf of the Commissioner; or
(ii) a statement in a publication approved in writing by the Commissioner.
Time limitation
290-55(4)
The Commissioner must not make an application under section 290-50 in relation to an entity ' s involvement in a *tax exploitation scheme more than 4 years after the entity last engaged in conduct that resulted in the entity or another entity being a *promoter of the tax exploitation scheme.
[ CCH Note: S 290-55(4) will be amended by No 37 of 2024, s 3 and Sch 1 item 20, by substituting " 6 years " for " 4 years " , applicable in relation to conduct engaged in before, on or after 1 July 2024.]
290-55(5)
The Commissioner must not make an application under section 290-50 in relation to an entity ' s involvement in a *scheme that has been promoted on the basis of conformity with a *product ruling more than 4 years after the entity last engaged in conduct in relation to implementation of the scheme.
[ CCH Note: S 290-55(5) will be amended by No 37 of 2024, s 3 and Sch 1 items 21 and 23, by substituting " *public ruling, *private ruling or *oral ruling " for " *product ruling " and all the words after " last engaged " , applicable in relation to conduct engaged in on or after 1 July 2024. All the words after " last engaged " will read:
]in conduct in relation to:
(a) if the scheme has been implemented - the implementation of the scheme; or
(b) if the scheme has not been implemented - the promotion of the scheme.
[ CCH Note: S 290-55(5) will be amended by No 37 of 2024, s 3 and Sch 1 item 22, by substituting " 6 years " for " 4 years " , applicable in relation to conduct engaged in before, on or after 1 July 2024.]
290-55(6)
However, the limitation in subsection (4) or (5) does not apply to a *scheme involving tax evasion.
[ CCH Note: S 290-55(6) will be amended by No 37 of 2024, s 3 and Sch 1 item 24, by substituting " *schemes that involve, or if implemented would involve, " for " a *scheme involving " , applicable in relation to conduct engaged in on or after 1 July 2024.]
Exception where entity does not know result of conduct
290-55(7)
The Federal Court of Australia must not order an entity to pay a civil penalty in relation to the entity ' s engaging in conduct: (a) that results in another entity being a *promoter of a *tax exploitation scheme; or (b) that results in a *scheme that has been promoted on the basis of conformity with a *product ruling being implemented in a way that is materially different from that described in the product ruling;
if the entity satisfies the Court that the entity did not know, and could not reasonably be expected to have known, that the entity ' s conduct would produce that result.
[ CCH Note: S 290-55(7) will be amended by No 37 of 2024, s 3 and Sch 1 items 25 - 28, by inserting para (aa) and substituting " scheme " for " *scheme " , " public ruling, private ruling or oral ruling " for " *product ruling " and " the ruling " for " the product ruling " in para (b), applicable in relation to conduct engaged in on or after 1 July 2024. Para (aa) will read:
]
(aa) that results in a *scheme that is materially different from that described in a *public ruling, *private ruling or *oral ruling being promoted on the basis of conformity with that ruling; or
[ CCH Note: S 290-55(7A) will be inserted by No 37 of 2024, s 3 and Sch 1 item 29, applicable in relation to conduct engaged in on or after 1 July 2024. S 290-55(7A) will read:
]
290-55(7A)
The other entity referred to in paragraph (7)(a) does not include:
(a) if the entity mentioned first in subsection (7) is a partner in a partnership:
(i) the partnership; or
(ii) someone who was a partner in the partnership when the alleged conduct occurred; or
(b) if the entity mentioned first in subsection (7) is a trustee of a trust:
(i) the trust; or
(ii) if the trust has more than one trustee - someone who was also a trustee of the trust when the alleged conduct occurred.
Employees
290-55(8)
The Commissioner must not make an application under section 290-50 in relation to an individual ' s involvement in a *scheme as an employee if the Federal Court of Australia has ordered the individual ' s employer to pay a civil penalty under this Division in relation to the same scheme.
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