Taxation Administration Act 1953

SCHEDULE 1 - COLLECTION AND RECOVERY OF INCOME TAX AND OTHER LIABILITIES  

Note: See section 3AA .

Chapter 4 - Generic assessment, collection and recovery rules  

PART 4-25 - CHARGES AND PENALTIES  

Division 290 - Promotion and implementation of schemes  

Subdivision 290-B - Civil penalties  

SECTION 290-65   MEANING OF TAX EXPLOITATION SCHEME  

290-65(1)    
A *scheme is a tax exploitation scheme if, at the time of the conduct mentioned in subsection 290-50(1) :

(a)    one of these conditions is satisfied:

(i) if the scheme has been implemented - it is reasonable to conclude that an entity that (alone or with others) entered into or carried out the scheme did so with the sole or dominant purpose of that entity or another entity getting a *scheme benefit from the scheme;

(ii) if the scheme has not been implemented - it is reasonable to conclude that, if an entity (alone or with others) had entered into or carried out the scheme, it would have done so with the sole or dominant purpose of that entity or another entity getting a scheme benefit from the scheme; and

(b)    one of these conditions is satisfied:

(i) if the scheme has been implemented - it is not *reasonably arguable that the scheme benefit is available at law;

(ii) if the scheme has not been implemented - it is not reasonably arguable that the scheme benefit would be available at law if the scheme were implemented.

Note:

The condition in paragraph (b) would not be satisfied if the implementation of the scheme for all participants were in accordance with binding advice given by or on behalf of the Commissioner of Taxation (for example, if that implementation were in accordance with a public ruling under this Act, or all participants had private rulings under this Act and that implementation were in accordance with those rulings).

290-65(1A)    

A *scheme is also a tax exploitation scheme if, at the time of the conduct mentioned in subsection 290-50(1) :

(a)    one of these conditions is satisfied:

(i) if the scheme has been implemented - Part IVA of the Income Tax Assessment Act 1936 applies to the scheme because of section 177DA or 177J of that Act;

(ii) if the scheme has not been implemented - it is reasonable to conclude that, had the scheme been entered into or carried out, Part IVA of that Act would apply to the scheme because of section 177DA or 177J of that Act; and

(b)    one of these conditions is satisfied:

(i) if the scheme has been implemented - it is reasonable to conclude that an entity that (alone or with others) entered into or carried out the scheme, or part of it, did so for a principal purpose of, or for more than one principal purpose that includes a purpose of, that entity or another entity getting a *scheme benefit from the scheme;

(ii) if the scheme has not been implemented - it is reasonable to conclude that if an entity (alone or with others) had entered into or carried out the scheme, it would have done so for a principal purpose of, or for more than one principal purpose that includes a purpose of, that entity or another entity getting a scheme benefit from the scheme; and

(c)    one of these conditions is satisfied:

(i) if the scheme has been implemented - it is not *reasonably arguable that the scheme benefit is available at law;

(ii) if the scheme has not been implemented - it is not reasonably arguable that the scheme benefit would be available at law if the scheme were implemented.

290-65(2)    
In deciding whether it is *reasonably arguable that a *scheme benefit would be available at law, take into account any thing that the Commissioner can do under a *taxation law.

Example:

The Commissioner may cancel a tax benefit obtained by a taxpayer in connection with a scheme under section 177F of the Income Tax Assessment Act 1936 .