Income Tax Assessment Act 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION

PART 2-20 - TAX OFFSETS

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Division 63 - Common rules for tax offsets

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Guide to Division 63

SECTION 63-10 Priority rules

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63-10(1)

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If you have one or more *tax offsets for an income year, apply them against your basic income tax liability in the order shown in the table. To the extent that an amount of a tax offset remains, the table tells you what happens to it.

Order of applying tax offsets
Item	Tax offset	What happens to any excess
5	Tax offset under section 160AAAA of the Income Tax Assessment Act 1936* (tax offset for low income aged persons and pensioners)	Your entitlement to it is transferred in accordance with regulations made under that Act
10	Tax offset under section 160AAAB of the Income Tax Assessment Act 1936* (tax offset for low income aged persons and pensioners - trustee assessed under section 98)	Your entitlement to it is transferred in accordance with regulations made under that Act
15	Tax offset under section 160AAA of the Income Tax Assessment Act 1936* (tax offset in respect of certain benefits)	Your entitlement to it is transferred in accordance with regulations made under that Act
17	(Repealed by No 92 of 2020)
20	Any *tax offset not covered by another item in this table	You cannot get a refund of it, you cannot transfer it and you cannot carry it forward to a later income year
21	*Tax offset under Subdivision 301-F (veterans ' superannuation (invalidity pension) tax offset)	Apply it against your liability (if any) to pay Medicare levy for the income year. To the extent that an amount of it remains, apply it against your liability (if any) to pay Medicare levy (fringe benefits) surcharge for the income year. To the extent that an amount of it remains, you cannot get a refund of it, you cannot transfer it and you cannot carry it forward to a later income year
22	Tax offset for foreign income tax under Division 770	Apply it against your liability (if any) to pay Medicare levy for the income year. To the extent that an amount of it remains, apply it against your liability (if any) to pay Medicare levy (fringe benefits) surcharge for the income year. To the extent that an amount of it remains, you cannot get a refund of it, you cannot transfer it and you cannot carry it forward to a later income year
25	(Repealed by No 49 of 2019)
30	Landcare and water facility *tax offset under the former Subdivision 388-A	You may carry it forward to a later income year (under Division 65)
32	ESVCLP *tax offset under Subdivision 61-P	You may carry it forward to a later income year (under Division 65)
33	*Tax offset under Subdivision 360-A (about early stage investors in innovation companies)	You may carry it forward to a later income year (under Division 65)
35	A *tax offset under Division 355 (about R & D) that is not covered by section 67-30	You may carry it forward to a later income year (under Division 65)
40	*Tax offset that is subject to the refundable tax offset rules (see Division 67)	You can get a refund of the remaining amount
45	Tax offset arising from payment of franking deficit tax (see section 205-70)	You may carry it forward to a later income year (under section 205-70)

Note 1:

Section 13-1 lists tax offsets.

Note 2:

Former Division 388 was repealed by the New Business Tax System (Capital Allowances - Transitional and Consequential) Act 2001 .

Note 3:

(Repealed by No 143 of 2007 )

Note 4:

The remaining amount of a carry forward tax offset may be reduced by section 65-30 or 65-35 to take account of net exempt income.

Note 5:

Tax offsets mentioned in items 5 and 10 are more commonly referred to as the Senior Australians Tax Offset.

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History

S 63-10(1) amended by No 29 of 2023, s 3 and Sch 9 item 6, by inserting table item 21, effective 24 June 2023.

S 63-10(1) amended by No 92 of 2020, s 3 and Sch 1 items 20 and 21, by repealing table item 17 and notes 6 and 7, effective 15 October 2020 and applicable in relation to assessments for the 2020-21 income year or a later income year. Table item 17 and notes 6 and 7 formerly read:

17 *Tax offset under section 159N of the Income Tax Assessment Act 1936 (rebate for certain low-income taxpayers) You cannot get a refund of it, you cannot transfer it and you cannot carry it forward to a later income year

Note 6:

Rules about applying the rebate for certain low-income taxpayers are set out in subsection 159N(4) of the Income Tax Assessment Act 1936 .

Note 7:

Item 17 of the table will be repealed on 1 July 2024 by the Treasury Laws Amendment (Personal Income Tax Plan) Act 2018 .

S 63-10(1) amended by No 49 of 2019, s 3 and Sch 4 item 77, by repealing table item 25, effective 1 July 2019. Table item 25 formerly read:

25 Child care *tax offset under Subdivision 61-IA You may transfer your entitlement to it to your *spouse (under sections 61-496 and 61-497)

S 63-10(1) amended by No 47 of 2018, s 3 and Sch 1 item 7, by inserting note 7, effective 1 July 2018.

S 63-10(1) amended by No 54 of 2016, s 3 and Sch 2 item 3, by inserting table item 32, applicable in relation to contributions made on or after 1 July 2016 to an ESVCLP that became registered, under subsection 13-1(1A) of the Venture Capital Act 2002 , on or after 7 December 2015 (whether or not it was conditionally registered, under subsection 13-5(1A) of that Act, before that day).

S 63-10(1) amended by No 54 of 2016, s 3 and Sch 1 item 13, by inserting table item 33, applicable in relation to equity interests issued on or after 1 July 2016.

S 63-10(1) amended by No 159 of 2011, s 3 and Sch 3 items 20 and 21, by inserting " and pensioners " in table items 5 and 10, column headed " Tax offset " , and substituting " benefits " for " pensions " in table item 15, column headed " Tax offset " , applicable to the 2012-13 year of income and later years of income.

S 63-10(1) amended by No 12 of 2012, s 3 and Sch 6 item 235, by substituting " Apply it against your liability (if any) to pay *Medicare levy for the income year. To the extent that an amount of it remains, apply it against your liability (if any) to pay *Medicare levy (fringe benefits) surcharge for the income year. To the extent that an amount of it remains, you cannot get a refund of it, you cannot transfer it and you cannot carry it forward to a later income year " for " You cannot get a refund of it, you cannot transfer it and you cannot carry it forward to a later income year " in the cell at table item 22, column headed " What happens to any excess " , applicable to income years starting on or after 1 July 2008.

S 63-10(1) amended by No 93 of 2011, s 3 and Sch 3 item 1, by inserting table item 35, effective 8 September 2011. For application, savings and transitional provisions see note under Div 355 heading.

S 63-10(1) amended by No 43 of 2011, s 3 and Sch 2 items 4 and 5, by inserting table item 17 and note 6 at the end, applicable to assessments for the 2011-12 income year and later income years.

S 63-10(1) amended by No 164 of 2007 , s 3 and Sch 10 item 11, by substituting " (see Division 67) " for " in Division 67 " in table item 40, effective 25 September 2007.

S 63-10(1) amended by No 143 of 2007 , s 3 and Sch 1 items 143 to 145, by inserting table item 22, repealing table item 35 and repealing Note 3, applicable in relation to income years, statutory accounting periods and notional accounting periods starting on or after the first 1 July that occurs after 24 September 2007. For savings provisions, see note under Div 770 heading . Table item 35 and Note 3 formerly read:

35 ... Foreign tax credit under Division 18 of Part III of the Income Tax Assessment Act 1936 ... You may carry it forward to a later income year (under section 160AFE of that Act)

Note 3:

Section 160AFE of the Income Tax Assessment Act 1936 also affects how much of a foreign tax credit can be applied against your basic income tax liability.

63-10(2)
Within each item, apply the tax offsets in the order in which they arose.

Note:

This would be relevant if you have carry forward tax offsets of the same category for different income years.

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