SECTION 1
1
SHORT TITLE
This Act may be cited as the
Income Tax Act 1986.
SECTION 2
2
COMMENCEMENT
This Act shall come into operation on the day on which it receives the Royal Assent.
SECTION 3
INTERPRETATION
3(1)
In this Act, unless the contrary intention appears:
Assessment Act
means the Income Tax Assessment Act 1936;
non-profit company
means:
(a)
a company that is not carried on for the purposes of profit or gain to its individual members and is, by the terms of the company's constituent document, prohibited from making any distribution, whether in money, property or otherwise, to its members; or
(b)
a friendly society dispensary;
prescribed unit trust
means a trust estate that is a public trading trust within the meaning of Division 6C of Part III of the Assessment Act.
History
Definition of "prescribed unit trust" substituted by No 53 of 2016, s 3 and Sch 5 item 5, applicable to assessments for income years starting on or after 1 July 2016. No 53 of 2016 (as amended by No 15 of 2019), s 3 and Sch 5 Pt 4 contains the following transitional provision:
Part 4 - Transitional
75 Transitional rule for 20% tracing requirement and repeal of Division 6B - imputation
(1)
This item applies if at a time (the
cessation time
), on or after the commencement of this Schedule, either:
(a)
section 102K of the Income Tax Assessment Act 1936 ceases to apply to the trustee of a trust because of the repeal of that section by Part 2 of this Schedule; or
(b)
section 102S of that Act ceases to apply to the trustee of a trust because of the amendment made by Part 1 of this Schedule.
(2)
Subitems (3) and (3A) apply if:
(a)
an event happens in respect of the trust that is described in:
(i)
the table in subsection 205-15(1) of the Income Tax Assessment Act 1997; or
(ii)
the table in subsection 205-30(1) of that Act; and
(b)
the event happens on or after the cessation time but before 1 July 2019; and
(c)
the event is:
(i)
the trust paying income tax for an income year starting before 1 July 2016; or
(ii)
the trust paying a PAYG instalment in respect of income tax for an income year starting before 1 July 2016; or
(iii)
the trust receiving a refund of income tax for an income year starting before 1 July 2016; or
(iv)
the trust franking a distribution; or
(v)the trust ceasing to be a franking entity.
History
S 75(2) amended by No 15 of 2019, s 3 and Sch 1 items 34-36, by substituting "Subitems (3) and (3A) apply" for "Subitem (3) applies", "1 July 2019" for "1 July 2018" in para (b) and inserting para (c)(v), effective 1 April 2019 and applicable in relation to the 2018-19 income year and later income years.
(2A)
However, subparagraph (2)(c)(v) does not apply unless the trust's franking account is in surplus immediately before the trust ceases to be a franking entity.
History
S 75(2A) inserted by No 15 of 2019, s 3 and Sch 1 item 37, effective 1 April 2019 and applicable in relation to the 2018-19 income year and later income years.
(3)
For the purposes of determining whether a franking credit or franking debit arises in the trust's franking account as a result of the event:
(a)
treat the trust as a corporate tax entity at the time the event happens; and
(b)
treat the trust as satisfying the residency requirement in section 205-25 of the Income Tax Assessment Act 1997 for the income year in which the event happens.
(3A)
If the event is an event described in item 4 of the table in subsection 205-30(1) of the Income Tax Assessment Act 1997, treat the event as happening on 1 July 2019.
History
S 75(3A) inserted by No 15 of 2019, s 3 and Sch 1 item 38, effective 1 April 2019 and applicable in relation to the 2018-19 income year and later income years.
(4)
Subitems (5) and (6) apply if:
(a)
the trust makes a distribution on or after the cessation time but before 1 July 2019; and
(b)
the trust's franking account is in surplus just before the trust makes the distribution; and
(c)
the distribution is not made out of income derived in relation to the 2016-17 income year or a later income year.
History
S 75(4) amended by No 15 of 2019, s 3 and Sch 1 items 39-41, by substituting "Subitems (5) and (6) apply" for "Subitem (5) applies", "1 July 2019" for "1 July 2018" in para (a) and inserting para (c), effective 1 April 2019 and applicable in relation to the 2018-19 income year and later income years.
(5)
For the purposes of determining whether the trust franks the distribution as a result of the event:
(a)
treat the trust as a corporate tax entity at the time it makes the distribution; and
(b)
treat the trust as satisfying the residency requirement in section 202-20 of the Income Tax Assessment Act 1997 at the time it makes the distribution.
Note:
As a result, the trust will satisfy the requirement in paragraph 202-5(a) of that Act in respect of the distribution. If the other requirements in section 202-5 of that Act are satisfied in respect of the distribution, this means that the trust franks the distribution.
(6)
Treat a beneficiary of the trust who receives the distribution as receiving, for the purposes of the income tax law, a dividend from a corporate tax entity.
History
S 75(6) inserted by No 15 of 2019, s 3 and Sch 1 item 42, effective 1 April 2019 and applicable in relation to the 2018-19 income year and later income years.
The definition formerly read:
"prescribed unit trust"
means a trust estate that:
(a)
is a corporate unit trust within the meaning of Division 6B of Part III of the Assessment Act; or
(b)
is a public trading trust within the meaning of Division 6C of Part III of the Assessment Act;
"registered organization"
(Repealed by No 89 of 2000)
3(2)
In this Act, a reference to taxable income shall be read as a reference to taxable income of the year of income.
SECTION 4
4
INCORPORATION
The Assessment Act is incorporated, and shall be read as one, with this Act.
SECTION 5
IMPOSITION OF INCOME TAX
5(1)
Income tax is imposed in accordance with this Act and at the relevant rates declared by the
Income Tax Rates Act 1986.
5(2)
This Act does not impose tax payable in accordance with section 121H, 126, 128B, 128NA, 128NB or 128V of the Assessment Act.
History
S 5(2) amended by No 16 of 2007, s 3 and Sch 1 item 1, by omitting "27GA" after "section", applicable to the 2007-2008 income year and later years.
S 5(2) amended by No 101 of 2006, s 3 and Sch 2 item 117, by amending references to repealed inoperative provisions, effective 14 September 2006. For application and saving provisions see the CCH AustralianIncome Tax Legislation archive.
S 5(2) amended by No 15 of 2002, No 11 of 1988 and No 109 of 1987.
5(2A)
This Act does not impose tax payable in accordance with section
301-175 or
306-15, or Division
840, of the
Income Tax Assessment Act 1997 or Division
840 of the
Income Tax (Transitional Provisions) Act 1997.
History
S 5(2A) amended by No 32 of 2008, s 3 and Sch 1 item 3, by substituting "section 301-175 or 306-15, or Division 840, of the Income Tax Assessment Act 1997 or Division 840 of the Income Tax (Transitional Provisions) Act 1997" for "section 301-175 or 306-15 of the Income Tax Assessment Act 1997", applicable to fund payments made in relation to the first income year starting on or after the first 1 July after 23 June 2008 and later income years.
S 5(2A) inserted by No 16 of 2007, s 3 and Sch 1 item 2, applicable to the 2007-2008 income year and later years.
5(2B)
(Repealed by No 70 of 2015)
History
S 5(2B) repealed by No 70 of 2015, s 3 and Sch 1 item 46, effective 1 July 2015. S 5(2B) formerly read:
5(2B)
This Act does not impose tax payable in accordance with section 345-100 of the Income Tax Assessment Act 1997.
S 5(2B) inserted by No 45 of 2008, s 3 and Sch 1 item 1, effective 26 June 2008.
5(3)
This Act does not impose tax upon the taxable income of a non-profit company where that taxable income does not exceed $416.
History
S 5(3) amended by No 89 of 2000.
5(4)
If this Act, insofar as it imposes tax upon the taxable income of a complying superannuation fund, a non-complying superannuation fund, a complying approved deposit fund, a non-complying approved deposit fund or a pooled superannuation trust (as defined in the
Income Tax Assessment Act 1997), would, apart from this subsection, deal with 2 subjects of taxation (within the meaning of section 55 of the Constitution), namely:
(a)
the taxation of so much of the taxable income as is attributable to contributions that are included in assessable income under Subdivision 295-C of the
Income Tax Assessment Act 1997; and
(b)the taxation of the remainder of the taxable income;
this Act imposes tax in respect of only that subject of taxation mentioned in paragraph (b).
History
S 5(4) amended by No 16 of 2007, s 3 and Sch 1 items 3 and 4, by substituting "a complying superannuation fund, a non-complying superannuation fund, a complying approved deposit fund, a non-complying approved deposit fund or a pooled superannuation trust (as defined in the Income Tax Assessment Act 1997)" for "an eligible entity within the meaning of Part IX of the Assessment Act", and "contributions that are included in assessable income under Subdivision 295-C of the Income Tax Assessment Act 1997" for "taxable contributions within the meaning of Part IX of the Assessment Act" in para (a), applicable to the 2007-2008 income year and later years.
S 5(4) inserted by No 100 of 1989.
5(5)
This Act does not impose tax upon the taxable income of a non-complying superannuation fund within the meaning of the
Income Tax Assessment Act 1997, to the extent that the taxable income is attributable to the inclusion of an amount in the fund's assessable income under table item 2 in section
295-320 of that Act.
History
S 5(5) amended by No 16 of 2007, s 3 and Sch 1 items 5 and 6, by substituting "the Income Tax Assessment Act 1997" for "Part IX of the Assessment Act" and "table item 2 in section 295-320" for "section 288A", applicable to the 2007-2008 income year and later years.
S 5(5) inserted by No 181 of 1994.
5(6)
This Act does not impose tax upon the taxable income of a Australian superannuation fund, to the extent that the taxable income is attributable to the inclusion of an amount in the fund's assessable income under table item 3 in section
295-320 of that Act.
History
S 5(6) amended by No 16 of 2007, s 3 and Sch 1 items 7 and 8, by substituting "Australian superannuation fund" for "resident superannuation fund" and "table item 3 in section 295-320" for "section 288B", applicable to the 2007-2008 income year and later years.
S 5(6) inserted by No 181 of 1994.
SECTION 6
ADJUSTMENT WHERE AMOUNT TO BE PAID BY, OR REFUNDED TO, TAXPAYER WOULD NOT EXCEED 49 CENTS
6(1)
[Application of section]
This section applies for the purposes of the making of an assessment of tax (other than further tax payable under subsection 94(9), (11) or (12) of the Assessment Act) in respect of the income of a taxpayer of a year of income where, upon the making of the assessment and the serving of notice of the assessment upon the taxpayer, there would, but for this section, be a net amount of not more than 49 cents payable by the Commissioner to the taxpayer, or by the taxpayer to the Commissioner, under the law relating to income tax, after taking into account all liabilities of the taxpayer, and all rebates and credits allowable to the taxpayer, under that law.
6(2)
[Adjustment of tax]
Where this section applies in relation to the making of an assessment:
(a)
if the amount of not more than 49 cents would be an amount payable to the taxpayer - additional tax equal to that amount is imposed by this Act in respect of the income of the taxpayer of the year of income; and
(b)
if the amount of not more than 49 cents would be an amount payable to the Commissioner - the amount that, but for this section, would be the amount of income tax imposed in respect of the income of the taxpayer of the year of income before the allowance of any rebates to which the taxpayer is entitled, is reduced by so much of that amount of not more than 49 cents as does not exceed the amount calculated by deducting the amount of any such rebates from the sum of the amount that is to be so reduced and any amount of further tax payable by the taxpayer in respect of that year of income under subsection 94(9), (11) or (12) of the Assessment Act.
6(3)
[Liability of taxpayer]
A reference in this section to a liability of the taxpayer shall be read as including a reference to a liability in respect of income tax or provisional tax notified to the taxpayer by the Commissioner, notwithstanding that the amount of the liability has not become due and payable.
6(4)
[Tax assessed and payable]
For the purposes of any calculation under the law relating to income tax that depends upon the amount of tax paid or payable by, or assessed in respect of the income of, a taxpayer, the tax assessed and payable under an assessment in relation to which this section applies shall be deemed to be the tax that would have been so assessed and payable if this section had not applied.
SECTION 7
7
LEVY OF TAX
The tax imposed by subsection 5(1) is levied, and shall be paid, for the financial year commencing on 1 July 1986 and for all subsequent financial years until the Parliament otherwise provides.
History
S 7 substituted by No 85 of 1990, amended by No 142 of 1989, substituted by No 92 of 1988 and amended by No 109 of 1987.
SECTION 8
8
PROVISIONAL TAX
(Repealed by No 109 of 1987)
History
Former s 8 amended by No 64 of 1987.
SECTION 9
9
ACT TO BE DEEMED TO BE THE ACT IMPOSING INCOME TAX
(Repealed by No 109 of 1987)
10
(Repealed) SECTION 10 INSTALMENTS OF TAX
(Repealed by No 109 of 1987)
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