Taxation Laws Amendment (Self Assessment) Act 1992 (101 of 1992)

PART 3 AMENDMENT OF THE INCOME TAX ASSESSMENT ACT 1936

26 Before section 222

Before section 222 of the Principal Act the following sections are inserted in Part VII:

Interpretation

"222A.(1) In this Part:

'credit' means:

(a) a credit within the meaning of Division 19 of Part III; or

(b) an offset within the meaning of Division 1 of Part IIIAA;

'estate shortfall excess', in relation to a taxpayer who is or has been a beneficiary of a trust estate, a year and an estate taxation statement, means:

(a) if:

(i) the taxpayer would have had a tax shortfall for the year if the taxpayer's statement tax for the year at all times had taken into account the net income of the estate calculated on the basis of that statement, but otherwise on the same basis as the correct net income of the estate would be calculated ('statement shortfall'); and

(ii) the taxpayer would have had a tax shortfall for the year if the taxpayer's statement tax for the year at all times had taken into account the correct net income of the estate ('non-statement shortfall'); and

(iii) the statement shortfall is higher than the non-statement shortfall;

the amount equal to the difference between those shortfalls; or

(b) if:

(i) the taxpayer would have had the statement shortfall; and

(ii) would not have had the non-statement shortfall;

the statement shortfall;

'estate taxation statement', in relation to a trust estate, means a taxation statement relating to the net income of the estate;

'income tax law' means a law under which the extent of liability for income tax is worked out;

'law' means:

(a) a section or other provision of an Act; or

(b) a regulation under an Act;

'partnership shortfall excess', in relation to a taxpayer who is a partner in a partnership, a year and a partnership taxation statement, means:

(a) if:

(i) the taxpayer would have had a tax shortfall for the year if the taxpayer's statement tax for the year at all times had taken into account the net income, and partnership loss, of the partnership calculated on the basis of that statement, but otherwise on the same basis as the correct net income, and partnership loss, of the partnership would be calculated ('statement shortfall'); and

(ii) the taxpayer would have had a tax shortfall for the year if the taxpayer's statement tax for the year at all times had taken into account the correct net income, and correct partnership loss, of the partnership ('non-statement shortfall'); and

(iii) the statement shortfall is higher than the non-statement shortfall;

the amount equal to the difference between those shortfalls; or

(b) if:

(i) the taxpayer would have had the statement shortfall; and

(ii) would not have had the non-statement shortfall;

the statement shortfall;

'partnership taxation statement', in relation to a partnership, means a taxation statement relating to the net income, or partnership loss, of the partnership;

'proper tax', in relation to a taxpayer and a year, means the tax properly payable by the taxpayer in respect of that year on the taxpayer's taxable income after allowing credits properly allowable to the taxpayer;

'return tax', in relation to a taxpayer and a year of income, means the tax that would have been payable by the taxpayer in respect of that year if it were assessed on the basis of the taxpayer's return of income in respect of that year after allowing the credits claimed by the taxpayer in that return;

'scheme section' means section 224, 225 or 226;

'shortfall section' means section 226G, 226H, 226J, 226K, 226L or 226M;

'statement tax', in relation to a taxpayer, a year and a time, means the tax that would have been payable by the taxpayer in respect of that year if it were assessed at that time on the basis of taxation statements by the taxpayer after allowing the credits claimed by the taxpayer;

'taxation officer' means a person exercising powers or performing functions under, or in relation to, this Act or the regulations;

'taxation officer statement' means a statement made to a taxation officer orally, in a document or in any other way, and includes a statement:

(a) made in an application, certificate, declaration, notification, objection, return or other document made, prepared or given, or purporting to be made, prepared, or given, under this Act or the regulations; or

(b) made in answer to a question asked under this Act or the regulations; or

(d) made in a document given to a taxation officer otherwise than under this Act or the regulations;

but does not include a statement made in:

(e) a document produced under paragraph 264(1)(b) or 264A(1)(d) or (e) (other than a document containing particulars of the basis of the calculation of taxable income of a year of income and the tax payable in respect of that taxable income that were specified in a return in accordance with section 221AZD); or

(f) a document produced under subparagraph 451(2)(c)(ii) or paragraph 453(1)(e);

'taxation purpose statement' means a statement made to a person, other than a taxation officer, for a purpose relating to the operation of this Act or the regulations orally, in a document or in any other way, and includes a statement:

(a) made in an application, certificate, declaration, notification or other document made, prepared or given to the person; or

(b) made in answer to a question asked by the person; or

'taxation statement', in relation to a person, means:

(a) a taxation officer statement made by the person; or

(b) a taxation purpose statement made by the person; but does not include a statement:

(c) in which an income tax law is treated as applying to a taxpayer in respect of a year of income in relation to a matter; and

(d) that is made:

(i) in an objection under this Act against an assessment or determination; or

(ii) in relation to the Commissioner's consideration of such an objection;

'tax shortfall', in relation to a taxpayer and a year, means the amount, if any, by which the taxpayer's statement tax for that year at the time at which it was lowest is less than the taxpayer's proper tax for that year;

'wrongful behaviour provision' means:

(a) in relation to section 224, subparagraph 224(1)(d)(i) or (ii); or

(b) in relation to section 225, sub-subparagraph 225(1)(c)(i)(B) or 225(1)(c)(ii)(B); or

'year' means year of income.

"(2) In this Part, 'arrangement', 'private ruling' and 'tax audit' have the same meanings as in Part IVAA of the Taxation Administration Act 1953.

Taxation statements

"222B.(1) For the purposes of this section:

(a) subject to paragraph (b), expressions in this section have the same meanings as in Division 16E of Part III; and

(b) paragraph (a) applies as if paragraph (c) of the definition of 'qualifying security' in subsection 159GP(1) were omitted; and

(c) sections 159GV (other than subsection 159GV(2)) and 159GZ apply as if references in them to 'this Division' were references to this section.

"(2) Where:

(a) a person to whom a notice is given under section 265B gives the notice to another person in connection with the transfer of a qualifying security to the other person; or

(b) a person gives advice in writing to another person, in connection with the transfer of a qualifying security, of a variation or partial redemption of the qualifying security;

any statement in the notice when so given, or in the advice when so given, to the other person is taken, for the purposes of this Part, to have been made by the person giving the notice or advice, as the case may be, to the other person for a purpose in connection with the operation of this Act.

"(3) Where:

(a) the holder of a qualifying security transfers the security to another person; and

(b) because of the application of section 128AA, the holder is liable to pay withholding tax in relation to the transfer of the qualifying security; and

(c) before the security was transferred, the holder gave to the transferee, in connection with the transfer, a notice issued to the holder under section 265B identifying the security; and

(d) after the notice was issued to the holder, the security was varied or partially redeemed; and

(e) the holder did not advise the transferee in writing of the variation or partial redemption;

the holder is taken, for the purposes of this Part, to have made for a purpose in connection with the operation of this Act a statement that the qualifying security was not so varied or partially redeemed.

"(4) Where:

(a) the holder of a qualifying security who acquired the security on transfer ('current acquisition transfer') transfers the security to another person; and

(b) because of the application of section 128AA, the holder is liable to pay withholding tax in relation to the transfer of the security; and

(c) before the security was transferred, the holder gave to the transferee, in connection with the transfer, a certificate issued to the holder under section 128AB identifying the security; and

(d) the holder had acquired the security on transfer on any occasion before the current acquisition transfer;

the holder is taken, for the purposes of this Part, to have made for a purpose in connection with the operation of this Act a statement that the certificate relates to the current acquisition transfer.

"(5) Where:

(a) a qualifying security is redeemed or partially redeemed from the holder; and

(b) the holder acquired the security on transfer ('current acquisition transfer'); and

(d) before the security was redeemed or partially redeemed, the holder gave to the issuer, in connection with the redemption or partial redemption, a certificate issued to the holder under section 128AB identifying the security; and

(e) the holder had acquired the security on transfer on any occasion before the current acquisition transfer;

Reasonably arguable

"222C.(1) For the purposes of this Part:

(a) the correctness of the treatment of the application of a law; or

(b) another matter;

is reasonably arguable if, having regard to the relevant authorities and the matter in relation to which the law is applied or the other matter, it would be concluded that what is argued for is about as likely as not correct.

"(2) For the purposes of this Part, if the treatment of the application of a law assumed that the Commissioner would exercise a discretion in a particular way, the correctness of the treatment is reasonably arguable, in so far as it consisted of the assumption, if the exercise by the Commissioner of the discretion in that way would be reasonably arguably in accordance with law.

"(3) For the purposes of this Part, the exercise, or assumed exercise, by the Commissioner of a discretion is reasonably arguably in accordance with law if, having regard to the relevant authorities and the matter in relation to which the discretion is or would be exercised, it would be concluded that a court would be about as likely as not to hold that the exercise is or would be in accordance with law.

"(4) In this section:

'authority' includes:

(a) an income tax law; or

(b) material for the purposes of subsection 15AB(1) of the Acts Interpretation Act 1901; or

(d) a public ruling within the meaning of Part IVAAA of the Taxation Administration Act 1953.

"(5) For the purposes of this section, the Commissioner exercises a discretion if the Commissioner:

(a) forms an opinion; or

(b) refuses or fails to form an opinion; or

(d) refuses or fails to attain a state of mind; or

(e) makes a determination; or

(f) refuses or fails to make a determination; or

(g) exercises a power; or

(h) refuses or fails to exercise a power.

Treating a law as not applying

"222D. For the purposes of this Part, a taxpayer who treats an income tax law as not applying in relation to a matter is taken to treat that law as applying in relation to that matter in a particular way.

Taxation statement can apply to different years

"222E. A particular taxation statement can be taken into account in working out the tax shortfalls of a taxpayer for 2 or more years.

Omission of assessable income from return

"222F. If a person omits from a return given under this Act or the regulations, being a return of income derived by the person, a partnership or a trust estate during a period, any assessable income derived by the person, the partnership or the trust estate during the period, the person is taken, for the purposes of this Part, to have made a statement in the return to the effect that the person, the partnership or the trust estate did not derive the assessable income during that period.".

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