Taxation Laws Amendment Act 1994 (56 of 1994)

Part 3   AMENDMENT OF THE INCOME TAX ASSESSMENT ACT 1936

Division 5   Payment of instalments by companies and certain trustees

43   Insertion of new Subdivision

After Subdivision B of Division 1C of Part VI of the Principal Act the following Subdivision is inserted:

"Subdivision BA-Instalment taxpayer groups

Medium taxpayer in large group treated as large taxpayer

"221AZMA. An instalment taxpayer is classified as large, and is not classified as medium, if:

(a) apart from this section, it would be classified as medium; and

(b) at the beginning of the first day of month 9:

(i) it is a member of an instalment taxpayer group; and

(ii) the total of the respective amounts of likely tax of all members of the group (including the taxpayer) is more than $300,000.

Instalment taxpayer groups

"221AZMB. An instalment taxpayer group consists of:

(a) an instalment taxpayer that:

(i) controls at least one other instalment taxpayer; but

(ii) is itself controlled by no other instalment taxpayer; and

(b) each instalment taxpayer that the first-mentioned taxpayer controls.

When one instalment taxpayer controls another

"221AZMC. For the purposes of section 221AZMB, an instalment taxpayer ('the first taxpayer') controls another instalment taxpayer ('the second taxpayer') if, and only if:

(a) the second taxpayer is a company and:

(i) the first taxpayer is in a position to cast, or control the casting of, more than 50% of the maximum number of votes that might be cast at a general meeting of the second taxpayer; or

(ii) the first taxpayer has the power to appoint or remove the majority of the directors of the second taxpayer; or

(iii) the second taxpayer is, or a majority of its directors are, accustomed or under an obligation, whether formal or informal, to act according to the directions, instructions or wishes of the first taxpayer; or

(b) the second taxpayer is a trustee covered by any of paragraphs 221AZK(1)(b) to (f) and:

(i) the first taxpayer beneficially owns, or is able in any way, whether directly or indirectly, to control the application of, more than 50% of the interests in the trust property or in the trust income; or

(ii) the first taxpayer has the power to appoint or remove the trustee of the trust; or

(iii) the trustee of the trust is accustomed or under an obligation, whether formal or informal, to act according to the directions, instructions or wishes of the first taxpayer; or

(c) in any case-the first taxpayer is taken, because of any other application or applications of this subsection, to control an instalment taxpayer that in turn is so taken to control the second taxpayer.".