A New Tax System (Pay As You Go) Act 1999 (178 of 1999)

Schedule 1   Pay as you go (PAYG) system of collecting income tax and other liabilities

Part 2   Consequential amendment of Acts

Income Tax Assessment Act 1936

18   After section 221AZKA

Insert:

221AZKB For 1999-2000, some medium and small taxpayers need not pay instalment due in month 18

(1) For the 1999-2000 year of income, a medium taxpayer is not liable to pay the instalment that would otherwise be due on the 1st day of month 18.

(2) For the 1999-2000 year of income, a small taxpayer is not liable to pay the instalment that would otherwise be due on the 15th day of month 18.

Note: This subsection does not cover a small taxpayer whose assessed tax for the 1999-2000 is more than $300,000. See subsection 221AZK(3A).

To qualify, taxpayer must be quarterly instalment payer

(3) However, subsection (1) or (2) applies only if the taxpayer is liable to pay an instalment for the first instalment quarter of the 2000-01 year of income under Division 45 in Schedule 1 to the Taxation Administration Act 1953 (even if the amount of that instalment is nil).

Note: This means that an entity that becomes an annual payer at the end of that instalment quarter under Subdivision 45-E in Schedule 1 to the Taxation Administration Act 1953 does not qualify.

Effect on amount of final instalment

(4) In working out the amount of the final instalment of a small or medium taxpayer for the 1999-2000 year of income, disregard a previous instalment that the taxpayer is not liable to pay because of this section.

221AZKC Deferring payment of the final instalment for 1999-2000

(1) Depending on the amount of its assessed tax for the 1999-2000 year of income, an instalment taxpayer may defer payment of all or some of its final instalment for that year.

(2) However, subsection (1) applies only if the taxpayer is liable to pay a quarterly instalment for the first instalment quarter of the 2000-01 year of income under Division 45 in Schedule 1 to the Taxation Administration Act 1953 (even if the amount of that instalment is nil).

Note: This means that an entity that becomes an annual payer at the end of that instalment quarter under Subdivision 45-E in Schedule 1 to the Taxation Administration Act 1953 does not qualify.

How much can be deferred, and for how long?

(3) The table shows:

(a) how much of the final instalment can be deferred (the deferred amount ); and

(b) the number of equal quarterly payments by which the taxpayer must pay off the deferred amount.

However, the deferred amount cannot be more than the whole of the instalment (reduced by any credits or offsets specified in paragraph 221AZP(1)(b)).

Note: The amount of each quarterly payment is the deferred amount divided by the number of payments.

(4) If only some of the final instalment can be deferred, the rest is still due on the day on which the whole of the instalment would otherwise be due. Section 221AZMAA (which applies the general interest charge to unpaid amounts) applies as if the rest of the final instalment were the whole of the final instalment.

When the quarterly payments are due

(5) The first of the quarterly payments is due:

(a) if (disregarding anything the Commissioner does under section 206) the final instalment would otherwise be due on the 1st day of month 18 for the 1999-2000 year of income - on the 21st day of month 19 for that year; and

(b) if (disregarding anything the Commissioner does under section 206) the final instalment would otherwise be due on the 1st or 15th day of month 21 for the 1999-2000 year of income - on the 21st day of month 22 for that year.

Note: The due date for the first quarterly payment is the same as for the taxpayer's next quarterly instalment for the 2000-01 year of income under Division 45 in Schedule 1 to the Taxation Administration Act 1953. If the taxpayer's year of income ends on 30 June 2000, the due date will be 21 January or 21 April 2001.

(6) Each of the remaining quarterly payments is due 3 months after the day on which the previous quarterly payment is due (or would be due apart from anything the Commissioner does under section 206).

(7) A quarterly payment is due on a particular day even if no quarterly instalment of the taxpayer is due on that day under Division 45 in Schedule 1 to the Taxation Administration Act 1953.

Note: If some or all of a quarterly payment is not paid on time, the taxpayer is liable to pay the general interest charge on the unpaid amount: see section 221AZMAA.

(8) Quarterly payments are to be treated as tax for the purposes of sections 206, 208, 209, 214, 254, 255, 258 and 259.

221AZKE Modified application of sections 221AZKB and 221AZKC to entity adopting a substituted accounting period

Sections 221AZKB and 221AZKC apply to an entity with modifications that the Commissioner determines in writing if the Commissioner has granted the entity leave under section 18 to adopt an accounting period ending on a day other than 30 June and, as a result:

(a) the entity's 1999-2000 year of income will end on a day of a calendar year that does not correspond to the last day of the entity's 1998-99 year of income; or

(b) the entity's 2000-01 year of income will end on a day of a calendar year that does not correspond to the last day of the entity's 1999-2000 year of income.