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 290-55   EXCEPTIONS  

Reasonable 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:

(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 6 years after the entity last engaged in conduct that resulted in the entity or another entity being a *promoter of the tax exploitation scheme.

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 *public ruling, *private ruling or *oral ruling more than 6 years after the entity last engaged 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.

290-55(6)    

However, the limitation in subsection (4) or (5) does not apply to *schemes that involve, or if implemented would involve, tax evasion.

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

(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

(b)    

that results in a scheme that has been promoted on the basis of conformity with a public ruling, private ruling or oral ruling being implemented in a way that is materially different from that described in the 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.

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.