TAX LAWS AMENDMENT (2013 MEASURES NO. 4) BILL 2013

2010-2011-2012-2013

The Parliament of the

Commonwealth of Australia

HOUSE OF REPRESENTATIVES

Presented and read a first time

Tax Laws Amendment (2013 Measures

No. 4) Bill 2013

No. , 2013

(Treasury)

A Bill for an Act to amend the law relating to

taxation, and for other purposes

i Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013

Contents

Short title ........................................................................................... 1

Commencement ................................................................................. 1

Schedule(s) ........................................................................................ 2

Schedule 1--Targeting R&D tax incentive to small and

medium businesses

Income Tax Assessment Act 1997

Industry Research and Development Act 1986

Schedule 2--Quarterly R&D credits

Part 1--Main amendment

Taxation Administration Act 1953

Part 2--Innovation Australia's role

Industry Research and Development Act 1986

Part 3--Other amendments

Income Tax Assessment Act 1936

Income Tax Assessment Act 1997

Taxation Administration Act 1953

Taxation (Interest on Overpayments and Early Payments) Act 1983

Tax Laws Amendment (Research and Development) Act 2011

Part 4--Application and transitional provisions

Schedule 3--Refunding excess GST

A New Tax System (Goods and Services Tax) Act 1999

Income Tax Assessment Act 1936

Taxation Administration Act 1953

Targeting R&D tax incentive to small and medium businesses Schedule 1

Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013 3

Schedule 1

Targeting R&D tax incentive to

small and medium businesses

Income Tax Assessment Act 1997

1 After section 355-100

Insert:

355-103 Exception for large businesses

(1) Despite section 355-100, an

R&D entity is not entitled under that

section to a

tax offset for an income year if its amount worked out

under subsection (2) for the income year is $20 billion or more.

R&D entity's aggregated assessable income

(2) The

R&D entity's amount for the income year is the sum of:

(a) its assessable income for the income year; and

(b) the assessable income for the income year of any entity that

connected with the R&D entity at any time during the

income year; and

is an

affiliate of the R&D entity at any time during the

income year; and

(d) the assessable income for the income year of any entity of

which the R&D entity is an affiliate at any time during the

income year.

(3) However, for the purposes of this section, disregard the assessable

income of an entity that is only

connected with the

R&D entity

because both of them are controlled by the same

Australian

government agency.

(4) In working out whether an entity is

connected with the R&D

entity for the purposes of this section:

(a) treat references in section 328-125 to at least 40% as

references to more than 50%; and

(b) disregard subsection 328-125(6).

Schedule 1 Targeting R&D tax incentive to small and medium businesses

4 Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013

Industry Research and Development Act 1986

2 At the end of paragraph 28D(2)(b)

Add:

; or (iii) would be reasonably likely to be registered under

section 27A for the R&D entity for an income year if

subsection 355-103(1) of the Income Tax Assessment

Act 1997 were disregarded.

Note:

Subsection 355-103(1) of the Income Tax Assessment Act 1997

prevents large businesses from being entitled to the R&D tax offset.

3 Application of amendments

The amendments made by this Schedule apply in relation to an R&D

entity's assessments for income years commencing on or after 1 July

2013.

Quarterly R&D credits Schedule 2

Main amendment Part 1

Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013 5

Schedule 2

Quarterly R&D credits

Part 1

Main amendment

Taxation Administration Act 1953

1 After Part 2-10 in Schedule 1

Insert:

Part 2-15--Quarterly credits of refundable tax

offsets

Division 48--Quarterly credits

Table of Subdivisions

Guide to Division 48

48-A

Object

48-B

Participating in the quarterly credits system

48-C

Tests for participation

48-D

Working out and paying quarterly credit amounts

48-E

End of year reconciliation

48-F

Ending participation

48-P

Special rules for consolidated groups etc.

48-T

Other matters

Guide to Division 48

48-1 What this Division is about

You can apply to participate in the quarterly credits system for an

income year if you expect to be entitled to refundable tax offsets

for the income year that are covered by the system.

Participating gives you quarterly credits towards your likely refund

from those tax offsets. These credits will either be based on your

Schedule 2 Quarterly R&D credits

Part 1 Main amendment

6 Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013

refund from a recent income year, or on a varied amount chosen by

you after estimating your refund for the current year.

A reconciliation happens when the current year's assessment is

made. General interest charge may be payable if you chose to base

your credits on a varied amount and they are excessively high.

Subdivision 48-A--Object

Table of sections

48-3

Object

48-3 Object

The object of this Division is to benefit the Australian economy by

improving entities' cash flow by enabling them to realise the

benefit of certain expected refundable tax offsets on a quarterly

basis during the income year.

Subdivision 48-B--Participating in the quarterly credits system

Table of sections

48-5

Participating in the quarterly credits system

48-10

Refusing participation

48-15

Applying to participate

48-5 Participating in the quarterly credits system

(1) The Commissioner may, on application, allow you to participate in

the

quarterly credits system for:

(a) each of the

instalment quarters in an income year, other than

any excluded under subsection (3); and

(b) one or more specified

tax offsets covered by section 48-100.

Note:

If you are dissatisfied with a decision under this subsection, you may

object against it in the manner set out in Part IVC (see

section 48-800).

(2) The Commissioner must notify you in writing of:

(a) the Commissioner's decision under subsection (1); and

Quarterly R&D credits Schedule 2

Main amendment Part 1

Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013 7

(b) the reasons for the decision, if the decision refuses to allow

you to participate as set out in your application.

(3) An

instalment quarter is excluded if the Commissioner receives

your application after:

(a) if all or a part of a December falls within the last month of

the instalment quarter--the next 14 February after the end of

the instalment quarter; or

(b) otherwise--the 14th day after the end of the instalment

quarter.

48-10 Refusing participation

(1) The Commissioner must, under subsection 48-5(1), refuse to allow

you to participate for:

(a) any of the

instalment quarters, and a specified

tax offset, if

the Commissioner is aware that you fail a test in

Subdivision 48-C necessary for that participation; or

(b) a specified instalment quarter, and a specified tax offset, if

during that instalment quarter you have already withdrawn

under section 48-400 from participating in the

quarterly

credits system for that tax offset.

Note 1:

The Commissioner may allow you to participate to the extent that

paragraph (a) or (b) does not prevent this.

Note 2:

This subsection applies separately for each tax offset mentioned in

your application.

(2) The Commissioner may, under subsection 48-5(1), refuse to allow

you to participate for one or more specified

instalment quarters

and

tax offsets if:

(a) you fail to give the Commissioner, in accordance with

section 48-15, information requested under that section; or

(b) for a tax offset listed in table item 20 (about R&D) in

section 48-100--at any time you failed to give

Innovation

Australia, in accordance with section 28H of the Industry

Research and Development Act 1986, information requested

under that section of that Act.

Schedule 2 Quarterly R&D credits

Part 1 Main amendment

8 Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013

48-15 Applying to participate

(1) An application to participate in the

quarterly credits system for

one or more

instalment quarters in an income year, and one or

tax offsets, must be given to the Commissioner in the

approved form before:

(a) if all or a part of a December falls within the last month of

the income year--the next 15 February after the end of the

income year; or

(b) otherwise--the 15th day after the end of the income year.

(2) The Commissioner may request you in writing to give specified

information to the Commissioner about your application.

(3) The request may be for the information to be given to the

Commissioner in the

approved form within:

(a) 14 days after the request was made; or

(b) a further period allowed by the Commissioner.

Note:

A failure to give the information in accordance with this subsection

may result in the Commissioner refusing to allow you to participate

(see subsection 48-10(2)).

Subdivision 48-C--Tests for participation

Table of sections

48-100

Tests for participation

48-105

Reasonable receipt test

48-110

Complying taxpayer test

48-100 Tests for participation

To participate in the

quarterly credits system for one or more

instalment quarters in an income year and a

tax offset listed in the

table, you must pass each of the following tests:

(a) the reasonable receipt test in section 48-105;

(b) the complying taxpayer test in section 48-110;

Quarterly R&D credits Schedule 2

Main amendment Part 1

Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013 9

Relevant tax offsets and any extra tests

Item

Participating in the quarterly credits

system for this tax offset:

requires you to pass these extra

tests (if any):

the

tax offset to which entities become

entitled under section 355-100 (about

R&D) of the Income Tax Assessment

Act 1997

you must have been entitled to a

tax offset under that section for at

least one of the last 5 income

years

48-105 Reasonable receipt test

It must be reasonable to expect that:

(a) you will become entitled to the

tax offset for the income

year; and

(b) the tax offset will be subject to the refundable tax offset

rules.

48-110 Complying taxpayer test

(1) You pass the complying taxpayer test if:

(a) no part of any of your

tax-related liabilities remains unpaid

after the time by which that liability is due to be paid; and

(b) during the current income year, and the 5 most recent income

years, you have not been convicted of an offence against:

(i) a

taxation law; or

(ii) a law relating to a taxation law; and

laws to provide documents or information to the

Commissioner or another entity; and

(d) it is reasonable to expect that you will comply with your

obligations under taxation laws in the future.

(2) However, if this table applies to you, the corresponding entities

mentioned in the table (your managing entities) must also satisfy

the paragraphs in subsection (1).

Passing the complying taxpayer test if other entities act for you

Item

If you are:

these entities must also satisfy the

paragraphs in subsection (1)

a partnership

each of your partners

Schedule 2 Quarterly R&D credits

Part 1 Main amendment

10 Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013

Passing the complying taxpayer test if other entities act for you

Item

If you are:

these entities must also satisfy the

paragraphs in subsection (1)

corporate limited partnership

each of your

general partners

a trust

your trustee

an unincorporated association

each member of your committee of

management

Note:

This subsection only applies to each of your managing entities when it

is in that capacity (see section 960-100 of the Income Tax Assessment

Act 1997).

Subdivision 48-D--Working out and paying quarterly credit

amounts

Table of sections

48-200

Quarterly credit amounts

48-205

Standard amount

48-210

Choosing a varied amount

48-215

Disallowing proposed varied amounts

48-220

Notifying the Commissioner of proposed varied amounts

48-225

When quarterly credit amounts are payable to you

48-230

When quarterly credit amounts are payable by you

48-235

The amount's quarterly credit due day

48-200 Quarterly credit amounts

If you are participating in the

quarterly credits system for an

instalment quarter in an income year (the present year) and one or

tax offsets (the present tax offsets), your quarterly credit

amount for the instalment quarter and the present tax offsets is:

(a) any varied amount applying under section 48-210 for the

instalment quarter and the present tax offsets; or

(b) otherwise--the standard amount worked out under

section 48-205.

Note:

If you recommence participating in the quarterly credits system,

paragraph (a) covers any varied amount applying for the instalment

quarter under your earlier participation in the system.

Quarterly R&D credits Schedule 2

Main amendment Part 1

Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013 11

48-205 Standard amount

(1) If:

(a) for the most recent income year (the reference year) for

which the Commissioner has made an assessment of your

income tax, you were entitled to

tax offsets of the same

kinds as each of the present tax offsets; and

(b) those reference year tax offsets were subject to the refundable

tax offset rules; and

immediately before the present year;

the standard amount worked out under this section is

of the

lesser of:

(d) the total amount of those reference year tax offsets; and

(e) the total of your

tax offset refunds (for tax offsets of any

kind) for the reference year.

Note:

If the instalment quarter is the first in the present year, the reference

year will usually be a different year to that for later instalment

quarters.

(2) Otherwise, the standard amount worked out under this section is

nil.

48-210 Choosing a varied amount

(1) You can choose to notify the Commissioner under section 48-220

of a proposed varied amount for the

instalment quarter and the

present tax offsets.

Note:

If you do, your notice must include a proposed varied amount for each

later instalment quarter in the income year (see

paragraph 48-215(1)(a)). A later notice can propose a replacement

varied amount for those later instalment quarters.

(2) An amount you so notify for an

instalment quarter is the varied

amount applying under this section for that instalment quarter and

the present tax offsets if that amount is the most recent that:

(a) has been so notified for that instalment quarter; and

(b) has not been disallowed by the Commissioner.

That amount may be a nil or negative amount.

(3) The Commissioner may disallow a proposed varied amount.

Schedule 2 Quarterly R&D credits

Part 1 Main amendment

12 Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013

Note:

If you are dissatisfied with a decision under this subsection, you may

object against it in the manner set out in Part IVC (see

section 48-800).

(4) The Commissioner must notify you in writing of:

(a) a decision under subsection (3) to disallow a proposed varied

amount; and

(b) the reasons for the decision.

48-215 Disallowing proposed varied amounts

(1) The Commissioner must, under subsection 48-210(3), disallow

each proposed varied amount included in your notice given under

section 48-220 if:

(a) that notice does not include a proposed varied amount for

each of the following

instalment quarters in the present year

for which you are participating in the

quarterly credits

system:

(i) an instalment quarter that is yet to end when you gave

that notice;

(ii) an instalment quarter for which the last month included

all or a part of a December, if you gave that notice

before the next 15 February;

(iii) an instalment quarter that ended less than 15 days

before you gave that notice; or

(b) for any of the proposed varied amounts included in that

notice (the test amount), the sum of:

(i) the test amount; and

(ii) any of the other proposed varied amounts that are for

earlier instalment quarters in the present year; and

(iii) your

quarterly credit amounts payable for any earlier

instalment quarters in the present year;

is less than nil or exceeds the amount worked out under

subsection (2).

(2) Work out the amount from the following formula:

Number of instalment quarters so far

Estimated

end of year amount

where:

Quarterly R&D credits Schedule 2

Main amendment Part 1

Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013 13

estimated end of year amount means the lesser of:

(a) the likely total of the present tax offsets and any other

tax

offsets for which you are participating in the

quarterly

credits system for an earlier

instalment quarter in the present

year; and

(b) the likely total of your

tax offset refunds (for tax offsets of

any kind) for the present year.

number of instalment quarters so far means the number of

instalment quarters in the income year, up to (and including) the

instalment quarter for which the test amount is proposed, for which

you are participating in the

quarterly credits system.

(3) The Commissioner may, under subsection 48-210(3), disallow

each proposed varied amount included in your notice under

section 48-220 if you fail to give the Commissioner, in accordance

with that section, information requested under that section.

(4) The Commissioner must not, under subsection 48-210(3), disallow

the proposed varied amounts included in your notice under

section 48-220 if:

(a) none of the following provisions applies:

(i) paragraph (1)(a) or subsection (3);

(ii) paragraph (1)(b), if the sum in that paragraph is less

than nil; and

(b) each of those proposed varied amounts is less than or equal to

the amount that would otherwise be your

quarterly credit

amount for the relevant

instalment quarter and the present

tax offsets.

48-220 Notifying the Commissioner of proposed varied amounts

(1) A notice of one or more proposed varied amounts must be given to

the Commissioner in the

approved form before:

(a) if all or a part of a December falls within the last month of

the earliest of the

instalment quarters to which the amounts

relate--the next 15 February after the end of that instalment

quarter; or

(b) otherwise--the 15th day after the end of the earliest of the

instalment quarters to which the amounts relate.

Schedule 2 Quarterly R&D credits

Part 1 Main amendment

14 Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013

Note:

You must keep records in relation to the varied amount (see

section 262A of the Income Tax Assessment Act 1936).

(2) The Commissioner may request you in writing to give specified

information to the Commissioner about the notice.

(3) The request may be for the information to be given to the

Commissioner in the

approved form within:

(a) 14 days after the request was made; or

(b) a further period allowed by the Commissioner.

Note:

A failure by you to give the information in accordance with this

subsection may result in the Commissioner refusing to allow the

proposed varied amounts (see subsection 48-215(3)).

48-225 When quarterly credit amounts are payable to you

General rule

(1) The Commissioner must, on behalf of the Commonwealth, pay you

your

quarterly credit amount for an

instalment quarter and the

present tax offsets on or before this day:

(a) the 28th day of the calendar month after the end of the

instalment quarter; or

(b) if all or a part of a December falls within the last month of

the instalment quarter--the next 28 February.

Delayed payment--varied amount under examination

(2) Despite subsection (1), if:

(a) your

quarterly credit amount is a varied amount applying

under section 48-210 that exceeds the amount otherwise

payable to you; and

(b) the Commissioner is examining whether to disallow that

varied amount;

the Commissioner may, until the examination ends, delay paying

you so much of that varied amount as is equal to the excess.

Note 1:

If you are dissatisfied with a decision under this subsection to delay

payment of the excess, you may object against it in the manner set out

in Part IVC (see section 48-800).

Note 2:

Interest accrues under Part IIIAB of the Taxation (Interest on

Overpayments and Early Payments) Act 1983 while the Commissioner

delays payment of the excess.

Quarterly R&D credits Schedule 2

Main amendment Part 1

Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013 15

Note 3:

The excess (and the interest) is not payable if the examination results

in the varied amount being disallowed.

Delayed payment--participation under examination

(3) Despite subsection (1), the Commissioner may delay paying you

your

quarterly credit amount if and while:

(a) the Commissioner is examining whether your participation

should be revoked; or

(b) the Commissioner is aware that a regulator mentioned in the

table is examining a matter relevant to whether your

participation should be revoked.

Other regulators whose examinations are relevant to your participation

Item

If the present tax offsets include:

the other regulator is:

the tax offset listed in table item 20

(about R&D) in section 48-100

Innovation Australia.

Note 1:

If you are dissatisfied with a decision under this subsection to delay

your payment, you may object against it in the manner set out in

Part IVC (see section 48-800).

Note 2:

Interest accrues under Part IIIAB of the Taxation (Interest on

Overpayments and Early Payments) Act 1983 while the Commissioner

delays your payment.

Note 3:

Your payment (and the interest) is not payable if the examination

results in your participation being revoked.

Delayed payment--you cannot receive electronic payments etc.

(4) Despite subsection (1), the Commissioner must delay paying you

your

quarterly credit amount if and while the Commissioner is

aware that your circumstances do not enable payments to be made

to you in accordance with subsection 48-820(1) (about electronic

payments etc.).

Note:

Interest accrues under Part IIIAB of the Taxation (Interest on

Overpayments and Early Payments) Act 1983 if the Commissioner

delays your payment more than 14 days after becoming aware that

electronic payments can now be made to you.

Matters relevant to delayed payments

(5) The Commissioner must notify you in writing of:

Schedule 2 Quarterly R&D credits

Part 1 Main amendment

16 Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013

(a) a decision under subsection (2), (3) or (4) to delay your

payment; and

(b) the reasons for the decision.

Payments cannot be made on or after assessment

(6) Despite subsection (1), your

quarterly credit amount for an

instalment quarter and the present tax offsets must not be paid to

you on or after the assessment day (see paragraph 48-300(1)(b)) for

the present year.

48-230 When quarterly credit amounts are payable by you

(1) However, if your

quarterly credit amount for the

instalment

quarter and the present tax offsets is a negative amount, you are

liable to pay the Commonwealth that amount (expressed as a

positive amount).

Note:

The amount will only be a negative amount if you choose a varied

amount that is a negative amount.

(2) That amount is due and payable on the

quarterly credit amount's

quarterly credit due day.

Note:

For provisions about collection and recovery of the amount, see

Part 4-15.

(3) If any of that amount (the varied amount) remains unpaid after the

quarterly credit amount's

quarterly credit due day, you are liable

to pay the

general interest charge on the unpaid amount for each

day in the period that:

(a) starts on the day after that due day; and

(b) ends on the last day any of the following remains unpaid:

(i) the varied amount;

(ii) general interest charge on any of the varied amount.

(4) This section does not apply if the

quarterly credit amount's

quarterly credit due day is on or after the assessment day (see

paragraph 48-300(1)(b)) for the present year.

48-235 The amount's quarterly credit due day

The quarterly credit due day for a

quarterly credit amount is:

Quarterly R&D credits Schedule 2

Main amendment Part 1

Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013 17

(a) if that amount is a positive amount--the day referred to in

subsection 48-225(1); or

(b) if that amount is a nil or negative amount--the day that

would have been the day referred to in subsection 48-225(1)

were that amount a positive amount.

Subdivision 48-E--End of year reconciliation

Table of sections

48-300

Debit equal to the total quarterly credits paid

48-305

When the debit is due

48-350

Liability to GIC on excess quarterly credits worked out using varied

amounts

48-355

Benchmark amount for the variation quarter

48-300 Debit equal to the total quarterly credits paid

(1) You are liable to pay the Commonwealth an amount (a debit)

under this section if:

(a) you are participating in the

quarterly credits system for one

or more

instalment quarters in an income year and one or

tax offsets; and

(b) on a particular day (the assessment day), the Commissioner

makes an assessment:

(i) of the total of your

tax offset refunds for the income

year; or

(ii) that you can get no such refunds for the income year.

Note:

The debit will be offset by a credit equal to the total of your tax offset

refunds.

(2) The debit is equal to the sum of your

quarterly credit amounts for

those

instalment quarters and those

tax offsets, disregarding so

much of any of those amounts as:

(a) is a positive amount not paid before the assessment day; or

(b) is a negative amount with a

quarterly credit due day that is

on or after the assessment day.

Note:

This debit only includes your quarterly credit amounts for those

instalment quarters for which you are participating in the quarterly

credits system. It does not include quarterly credit amounts for

instalment quarters for which you (under Subdivision 48-F) have

ceased to participate.

Schedule 2 Quarterly R&D credits

Part 1 Main amendment

18 Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013

(3) The Commissioner must give you notice of the debit, unless

subsection 166A(3) of the Income Tax Assessment Act 1936

applies to you for the income year.

Note 1:

This could be done by including the debit in the notice of your

assessment referred to in paragraph (1)(b).

Note 2:

The debit is the debit as amended. So, if a previously notified debit is

incorrect, notice of the debit (as amended) must also be given for this

subsection to be satisfied.

48-305 When the debit is due

(1) Parts of the debit may be due on different days.

(2) So much of the debit as does not exceed the total of your

tax

offset refunds for the income year is due and payable on the

assessment day.

Note:

This part of the debit will be offset by the credit equal to the total of

your tax offset refunds.

(3) So much of the debit (if any) as exceeds the total of your

tax

offset refunds for the income year is due and payable on the day

your income tax for the income year:

(a) is due and payable; or

(b) would have been due and payable if you were liable to pay

income tax for the income year.

Note 1:

For the day income tax is due, see section 5-5 of the Income Tax

Assessment Act 1997.

Note 2:

For provisions about collection and recovery of this excess, see

Part 4-15.

(4) If so much of the debit as is covered by subsection (3) (the excess)

remains unpaid after the time by which it is due to be paid, you are

liable to pay the

general interest charge on the unpaid amount for

each day in the period that:

(a) starts on the day after the excess was due to be paid; and

(b) ends on the last day any of the following remains unpaid:

(i) the excess;

(ii) general interest charge on any of the excess.

Quarterly R&D credits Schedule 2

Main amendment Part 1

Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013 19

48-350 Liability to GIC on excess quarterly credits worked out using

varied amounts

(1) You are liable to pay the

general interest charge under this section

if:

(a) you are participating in the

quarterly credits system for an

instalment quarter (the variation quarter) in an income year

and one or more

tax offsets; and

(b) this is the case:

Benchmark amount

85% of your total credits

where:

benchmark amount means the amount worked out under

section 48-355 for the variation quarter and those tax offsets.

your total credits means the sum of your

quarterly credit

amounts for the variation quarter and any earlier instalment

quarters in the income year, disregarding so much of any of

those amounts as:

(i) is a positive amount not paid before the assessment day

(see paragraph 48-300(1)(b)) for the income year; or

(ii) is a negative amount with a

quarterly credit due day

that is on or after that assessment day.

Note:

You will not be liable for this charge if your quarterly credit amounts

have never been varied above the standard amounts, as your total

credits will never exceed the benchmark amount (see section 48-355).

(2) You are liable to pay the

general interest charge on the difference

between your total credits and the benchmark amount.

(3) You are liable to pay the charge for each day in the period:

(a) starting on the

quarterly credit due day for your

quarterly

credit amount for the variation quarter; and

(b) ending on the earlier of:

(i) if you have a quarterly credit amount for one or more

later

instalment quarters in the income year--the

quarterly credit due day for the first of those later

quarterly credit amounts; and

(ii) the assessment day (see paragraph 48-300(1)(b)) for the

income year.

Note:

Subparagraph (b)(i) includes the case where you have a nil or negative

quarterly credit amount for a later instalment quarter.

Schedule 2 Quarterly R&D credits

Part 1 Main amendment

20 Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013

(4) The Commissioner must give you written notice of the

general

interest charge to which you are liable under subsection (2). You

must pay the charge within 14 days after you are given that notice.

Note:

The Commissioner may remit the charge (see section 8AAG).

(5) If any of the

general interest charge to which you are liable under

subsection (2) (the original GIC) remains unpaid at the end of the

14 days referred to in subsection (4), you are also liable to pay the

general interest charge on the unpaid amount for each day in the

period that:

(a) starts on the day after those 14 days; and

(b) ends on the last day any of the following remains unpaid:

(i) the original GIC;

(ii) general interest charge on any of the original GIC.

48-355 Benchmark amount for the variation quarter

(1) The amount worked out under this section for the variation quarter

and those

tax offsets is the greater of:

(a) the sum of the standard amounts worked out under

section 48-205 for:

(i) the variation quarter; and

(ii) any earlier

instalment quarters in the income year for

which you are participating in the

quarterly credits

system; and

(b) the amount applying under subsection (2).

(2) The amount applying under this subsection is as follows:

Number of instalment quarters so far

End of year amount

where:

end of year amount means the lesser of:

(a) either:

(i) the total amount of those

tax offsets and any other tax

offsets for which you are participating in the

quarterly

credits system for an earlier

instalment quarter in the

income year; or

Quarterly R&D credits Schedule 2

Main amendment Part 1

Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013 21

(ii) nil, if you are not entitled to any of the tax offsets

referred to in subparagraph (i) for the income year; and

(b) the total of your

tax offset refunds (for tax offsets of any

kind) for the income year.

number of instalment quarters so far means the number of

instalment quarters in the income year, up to (and including) the

variation quarter, for which you are participating in the

quarterly

credits system.

Subdivision 48-F--Ending participation

Table of sections

48-400

Withdrawing participation

48-405

You must withdraw if you later fail a test etc.

48-410

Excusing noncompliance after you start participating

48-415

Applying for noncompliance to be excused

48-420

Revoking participation

48-425

Collecting and recovering quarterly credits paid to you for quarters for

which you no longer participate

48-430

Recovering quarterly credits paid by you for quarters for which you no

longer participate

48-400 Withdrawing participation

(1) You may withdraw from participating in the

quarterly credits

system for any or all of the

instalment quarters (whether past,

current or future) in the income year and one or more

tax offsets.

Note:

You will need to repay any quarterly credit amounts paid to you for

instalment quarters that you later withdraw from (see section 48-425).

(2) A withdrawal must be by notice given to the Commissioner in the

approved form.

(3) The withdrawal takes effect, for the

instalment quarters and

tax

offsets specified in it, when it is given to the Commissioner.

Note:

You may apply to participate again in the quarterly credits system for

later instalment quarters in the income year.

(4) A withdrawal is irrevocable.

Schedule 2 Quarterly R&D credits

Part 1 Main amendment

22 Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013

48-405 You must withdraw if you later fail a test etc.

Failing a test necessary for participation

(1) You contravene this subsection if:

(a) you are participating in the

quarterly credits system for an

instalment quarter in an income year and a

tax offset; and

(b) during the instalment quarter, you (or any of your

managing

entities) fail a test in Subdivision 48-C necessary for that

participation, other than paragraph 48-110(1)(a) or (c); and

(d) you do not, within 28 days after that failure happened or

started, withdraw from participating in the quarterly credits

system for the instalment quarter and the tax offset in

accordance with section 48-400.

Note 1:

This subsection applies separately for each instalment quarter and tax

offset for which you are participating in the quarterly credits system.

Note 2:

Your managing entities may contravene this subsection if you are a

partnership, trust or unincorporated association or body (see

Division 444).

Failing to comply with a taxation obligation

(2) You contravene this subsection if:

(a) you are participating in the

quarterly credits system for an

instalment quarter in an income year and a

tax offset; and

(b) during the instalment quarter, you (or any of your

managing

entities) fail to comply with an obligation under a

taxation

law (whether the obligation arises before, at or after the start

of the instalment quarter); and

(d) none of the following happen within 28 days after that failure

happened or started:

(i) that failure is excused under subsection 48-410(2);

(ii) you apply for that failure to be excused under

subsection 48-410(2);

(iii) you withdraw from participating in the quarterly credits

system for the instalment quarter and the tax offset in

accordance with section 48-400.

Quarterly R&D credits Schedule 2

Main amendment Part 1

Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013 23

Note 1:

This subsection applies separately for each instalment quarter and tax

offset for which you are participating in the quarterly credits system.

Note 2:

Your managing entities may contravene this subsection if you are a

partnership, trust or unincorporated association or body (see

Division 444).

Strict liability offence

(3) You commit an offence of strict liability if you contravene

subsection (1) or (2).

Penalty: 60 penalty units.

Note 1:

For strict liability, see section 6.1 of the Criminal Code.

Note 2:

Section 4K of the Crimes Act 1914 applies to an offence against this

subsection, so you commit an offence for each day after that 28 day

period that you do not withdraw from the quarterly credits system.

Administrative penalty

(4) You are liable to pay to the Commissioner a penalty of 20 penalty

units if you contravene subsection (1) or (2).

Note 1:

Division 298 in this Schedule contains machinery provisions for

administrative penalties.

Note 2:

This administrative penalty is not payable if you are prosecuted under

subsection (3) for the same contravention (see section 8ZE).

48-410 Excusing noncompliance after you start participating

(1) This section applies if:

(a) you are participating in the

quarterly credits system for one

or more

instalment quarters in an income year and a

tax

offset; and

(b) after you start participating, you (or any of your

managing

entities) fail to comply with an obligation under a

taxation

law (whether the obligation arises before, at or after the time

you start participating).

Note:

This subsection applies separately for each tax offset for which you

are participating in the quarterly credits system for those instalment

quarters.

(2) For the purposes of this Division, the Commissioner may excuse

that failure.

Schedule 2 Quarterly R&D credits

Part 1 Main amendment

24 Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013

Note:

If you are dissatisfied with a decision under this subsection, you may

object against it in the manner set out in Part IVC (see

section 48-800).

(3) In deciding whether to excuse that failure, the Commissioner must

have regard to:

(a) the consequences of that failure; and

(b) the consequences of any other failure for which this section

applies in relation to that participation; and

managing entities (if any))

complying in the future with obligations under taxation laws;

and

(d) the likely consequences if you (or any of those managing

entities) do not so comply.

(4) That failure may be excused, under subsection (2), on the

Commissioner's own initiative or on application.

(5) The Commissioner may, under subsection (2), refuse to excuse that

failure if you fail to give the Commissioner, in accordance with

section 48-415, information requested under that section.

(6) The Commissioner must notify you in writing of:

(a) the Commissioner's decision under subsection (2); and

(b) if the decision refuses to excuse that failure--the reasons for

the decision.

48-415 Applying for noncompliance to be excused

(1) An application for the Commissioner to excuse a failure must be

given to the Commissioner in the

approved form within:

(a) 28 days after the day that failure happened or started; or

(b) a further period allowed by the Commissioner.

(2) The Commissioner may request you in writing to give specified

information to the Commissioner about your application.

(3) The request may be for the information to be given to the

Commissioner in the

approved form within:

(a) 14 days after the request was made; or

(b) a further period allowed by the Commissioner.

Quarterly R&D credits Schedule 2

Main amendment Part 1

Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013 25

Note:

A failure to give the information in accordance with this subsection

may result in the Commissioner refusing to excuse that failure (see

subsection 48-410(5)).

48-420 Revoking participation

Mandatory revocation if fail a test when start participating

(1) The Commissioner must, by notice in writing given to you, revoke

your participation in the

quarterly credits system for:

(a) all of the

instalment quarters (whether past, current or

future) in an income year; and

(b) one or more

tax offsets;

if the Commissioner is aware that, when you started participating,

you (or any of your

managing entities) failed a test in

Subdivision 48-C necessary for that participation.

Note:

If you are dissatisfied with a decision under this subsection, you may

object against it in the manner set out in Part IVC (see

section 48-800).

Revocation if default event happens

(2) The Commissioner may, by notice in writing given to you, revoke

your participation in the

quarterly credits system for any or all of

the

instalment quarters (whether past, current or future) in an

income year and one or more

tax offsets if:

(a) at any time during the income year after you start

participating, you (or any of your

managing entities) fail a

test in Subdivision 48-C necessary for that participation,

other than paragraph 48-110(1)(a) or (c); or

(b) at any time during the income year after you start

participating:

(i) you (or any of your managing entities) fail to comply

with an obligation under a

taxation law (whether the

obligation arises before, at or after the time you start

participating); and

(ii) the failure has not been excused under

subsection 48-410(2); or

income tax return for the income year

with the Commissioner on or before the required day.

Schedule 2 Quarterly R&D credits

Part 1 Main amendment

26 Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013

Note:

If you are dissatisfied with a decision under this subsection, you may

object against it in the manner set out in Part IVC (see

section 48-800).

Matters relevant to revocations

(3) A revocation takes effect for:

(a) the

tax offsets specified in the notice; and

(b) for a revocation under subsection (2)--the

instalment

quarters specified in the notice.

(4) A notice under subsection (1) or (2) must include the reasons for

the revocation.

48-425 Collecting and recovering quarterly credits paid to you for

quarters for which you no longer participate

(1) If:

(a) on a particular day (the payment day), you are paid all or part

of a

quarterly credit amount for an

instalment quarter in an

income year and one or more

tax offsets; and

(b) under this Subdivision, you cease to participate in the

quarterly credits system for that instalment quarter and one

or more of those tax offsets;

you are liable to repay the Commonwealth so much of that amount

as you were paid (the repayable amount).

(2) The repayable amount is due and payable on the payment day.

Note:

For provisions about collection and recovery of that amount, see

Part 4-15.

(3) If any of the repayable amount remains unpaid after the payment

day, you are liable to pay the

general interest charge on the unpaid

amount for each day in the period that:

(a) starts on the day after the payment day; and

(b) ends on the last day any of the following remains unpaid:

(i) the repayable amount;

(ii) general interest charge on any of the repayable amount.

Quarterly R&D credits Schedule 2

Main amendment Part 1

Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013 27

48-430 Recovering quarterly credits paid by you for quarters for

which you no longer participate

(1) If:

(a) on a particular day (the payment day), you pay an amount

under section 48-230 for an

instalment quarter in an income

year and one or more

tax offsets; and

(b) under this Subdivision, you cease to participate in the

quarterly credits system for that instalment quarter and those

tax offsets;

the Commissioner must, on behalf of the Commonwealth, repay

that amount to you on or before the 14th day after the day the

notice is given that causes that cessation.

Note:

See Division 3A of Part IIB for the rules about how the Commissioner

must pay that amount. Division 3 of Part IIB allows the Commissioner

to apply that amount as a credit against tax debts that you owe to the

Commonwealth.

(2) However, the Commissioner must delay repaying you that amount

if and while the Commissioner is aware that your circumstances do

not enable payments to be made to you in accordance with

subsection 48-820(1) (about electronic payments etc.).

Note:

Interest accrues under Part IIIAB of the Taxation (Interest on

Overpayments and Early Payments) Act 1983 if the Commissioner

delays the repayment more than 14 days after becoming aware that

electronic payments can now be made to you.

Subdivision 48-P--Special rules for consolidated groups etc.

Table of sections

48-700

Single entity rule

48-705

Entry rule

48-710

Exit rule

48-715

Effect of choice to continue group after shelf company becomes new head

company

48-720

Effect of change of provisional head company of a MEC group

48-725

Conversions--MEC group to consolidated group

48-730

Conversions--consolidated group to MEC group

48-735

Giving notice if new group comes into existence

Schedule 2 Quarterly R&D credits

Part 1 Main amendment

28 Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013

48-700 Single entity rule

For each

instalment quarter starting during the period an entity is a

subsidiary member of a

consolidated group or

MEC group:

(a) that entity; and

(b) any other subsidiary member of the group;

are taken for the purposes of this Division to be parts of the

head

company or

provisional head company of the group (rather than

separate entities).

Note 1:

The entity will continue to have any quarterly credit amount payable

for the instalment quarter in which it joins the group. However, the

group will continue to have any quarterly credit amount payable for

the instalment quarter in which the entity leaves the group.

Note 2:

Each entity that continues to have that quarterly credit amount will

also have an end-of-year debit under section 48-300 that takes account

of that amount.

Note 3:

Despite this single entity rule, a subsidiary member of the group is

jointly and severally liable for a liability under this Division of the

head company (see section 721-10 of the Income Tax Assessment Act

1997).

48-705 Entry rule

(1) This section applies if an entity becomes a

subsidiary member of a

consolidated group or

MEC group during an

instalment quarter

in an income year.

(2) Except as set out in the table, for the purposes of this Division and

future

instalment quarters, everything that happened in relation to

the entity before those future instalment quarters is taken to have

happened instead in relation to the

head company or

provisional

head company of the group.

Things to which the entry rule does not apply

Item

Any of these things that

happened in relation to the entity

before those future instalment

quarters:

is not taken to have happened in

relation to the head company or

provisional head company of the

group for these purposes:

a failure to satisfy a paragraph in

subsection 48-110(1)

whether the

head company or

provisional head company:

(a) satisfies a paragraph in

Quarterly R&D credits Schedule 2

Main amendment Part 1

Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013 29

Things to which the entry rule does not apply

Item

Any of these things that

happened in relation to the entity

before those future instalment

quarters:

is not taken to have happened in

relation to the head company or

provisional head company of the

group for these purposes:

subsection 48-110(1); or

(b) has failed to comply with an

obligation under a

taxation law

participating in the

quarterly

credits system for an

instalment

quarter and a

tax offset

whether the

head company or

provisional head company is

participating in the quarterly credits

system for an instalment quarter and

the tax offset

having

quarterly credit amounts

whether the

head company or

provisional head company has

quarterly credit amounts

becoming entitled to

tax offsets for

a previous income year

working out the

head company's or

provisional head company's

standard amount under

section 48-205

Note:

Table item 1 does not prevent the entity's personnel, past practices

and culture etc. from being relevant for working out, during future

instalment quarters, whether the head company or provisional head

company satisfies paragraph 48-110(1)(d) (about complying with

future tax obligations).

48-710 Exit rule

(1) This section applies if an entity ceases to be a

subsidiary member

of a

consolidated group or

MEC group during an

instalment

quarter in an income year.

(2) Except as set out in the table, for the purposes of this Division and

future

instalment quarters, nothing that happened in relation to the

head company or

provisional head company of the group before

those future instalment quarters, whether:

(a) while the entity was a

subsidiary member of the group; or

(b) because of the application of section 48-705 (about

transferring the entity's earlier history to the group);

is taken to have happened in relation to the entity.

Schedule 2 Quarterly R&D credits

Part 1 Main amendment

30 Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013

Things to which the exit rule does not apply

Item

If the group's history

includes:

then, for the purposes of this Division

and those future instalment quarters:

the

head company or

provisional head company

becoming entitled to a

tax

offset for an income year

the entity is also taken to be entitled to a

tax offset of the same kind for the

income year, but not for the purposes of

working out the entity's standard amount

under section 48-205.

(3) For the

head company or

provisional head company:

(a) any varied amount applying under section 48-210 at the start

of the next

instalment quarter (if any) in the income year;

and

(b) the standard amount worked out under section 48-205;

are taken to be nil for that next instalment quarter and any later

instalment quarters in the income year.

Note:

The head company or provisional head company may, after the start of

that next quarter, choose to notify the Commissioner of further

proposed varied amounts for that quarter and later quarters.

48-715 Effect of choice to continue group after shelf company

becomes new head company

(1) This section applies if:

(a) immediately before a particular time (the completion time), a

company (the original company) is the

head company of a

consolidated group; and

(b) another company (the interposed company) chooses under

subsection 124-380(5) of the Income Tax Assessment Act

1997 that the group is to continue in existence at and after the

completion time.

(2) For the purposes of this Division:

(a) the group is taken not to have ceased to exist under

subsection 703-5(2) of that Act because the original company

ceases to be the

head company of the group; and

(b) the interposed company is taken to have become the head

company of the group at the completion time; and

company at that time.

Quarterly R&D credits Schedule 2

Main amendment Part 1

Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013 31

(3) For the purposes of this Division at and after the completion time,

everything that happened in relation to the original company before

the completion time:

(a) is taken to have happened in relation to the interposed

company instead of in relation to the original company; and

(b) is taken to have happened in relation to the interposed

company instead of what would (apart from this section) be

taken to have happened in relation to the interposed company

before that time;

just as if, at all times before the completion time, the interposed

company had been the original company and the original company

had been the interposed company.

Note:

The original company and the interposed company have in effect

exchanged identities throughout the period before the completion time

for the purposes of the quarterly credits system.

Example: The original company is participating in the quarterly credits system

for all 4 instalment quarters in an income year, but then the

completion time happens during the third quarter. The interposed

company will be paid the quarterly credit amounts for the third and

fourth quarters, and will have a debit under section 48-300 for the

amounts paid for all 4 quarters.

(4) However, while subsection (3) applies to a negative

quarterly

credit amount having a

quarterly credit due day that is before the

completion time, that subsection does not apply to:

(a) the original company's liability to pay that amount; or

(b) any other

tax-related liability arising from this Division

before the completion time.

Example: In the example from subsection (3), if the quarterly credit amount for

the second quarter was a negative amount:

(a) after the completion time, the original company will continue to

be liable under section 48-230 to pay that amount; and

(b) the interposed company's end-of-year debit under section 48-300

will take account of that amount.

48-720 Effect of change of provisional head company of a MEC

group

(1) This section applies if:

(a) a company (the old head company) is the

provisional head

company of a

MEC group just before a

cessation event

happens to the company; and

Schedule 2 Quarterly R&D credits

Part 1 Main amendment

32 Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013

(b) a different company (the new head company) is the

provisional head company of the group at the time (the

transition time) just after that cessation event.

(2) For the purposes of this Division at and after the transition time,

everything that happened in relation to the old head company

before the transition time:

(a) is taken to have happened in relation to the new head

company instead of in relation to the old head company; and

(b) is taken to have happened in relation to the new head

company instead of what would (apart from this section) be

taken to have happened in relation to the new head company

before that time;

just as if, at all times before the transition time, the new head

company had been the old head company and the old head

company had been the new head company.

Note:

The new head company and old head company have in effect

exchanged identities throughout the period before the transition time

for the purposes of the quarterly credits system.

(3) However, while subsection (2) applies to a negative

quarterly

credit amount having a

quarterly credit due day that is before the

transition time, that subsection does not apply to:

(a) the old head company's liability to pay that amount; or

(b) any other

tax-related liability arising from this Division

before the transition time.

Note:

The examples to subsections 48-715(3) and (4) apply in a similar way

to subsections (2) and (3) of this section.

48-725 Conversions--MEC group to consolidated group

(1) This section applies if, at a particular time (the conversion time), a

consolidated group (the new group) is

created from a

MEC

group (the old group).

(2) For the purposes of this Division at and after the conversion time:

(a) the new group is taken to be a continuation of the old group;

and

(b) everything that happened in relation to the

provisional head

company of the old group before the conversion time is taken

Quarterly R&D credits Schedule 2

Main amendment Part 1

Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013 33

instead to have happened in relation to that entity in its role

head company of the new group.

48-730 Conversions--consolidated group to MEC group

(1) This section applies if, at a particular time (the conversion time), a

MEC group (the new group) is created from a consolidated group

(the old group).

(2) For the purposes of this Division at and after the conversion time:

(a) the new group is taken to be a continuation of the old group;

and

(b) everything that happened in relation to the

head company of

the old group before the conversion time is taken instead to

have happened in relation to that entity in its role as

provisional head company of the new group.

48-735 Giving notice if new group comes into existence

(1) The

head company of a

consolidated group, or

provisional head

company of a

MEC group, must notify the Commissioner if:

(a) the group comes into existence on a particular day in an

income year; and

(b) just before that day, an entity that has become a

subsidiary

member of the group was participating in the

quarterly

credits system for one or more

instalment quarters in the

income year.

Note:

The Commissioner must also be notified of other situations where the

entity joins or leaves a group (see sections 703-60 and 719-80 of the

Income Tax Assessment Act 1997).

(2) The notice must be given to the Commissioner in the

approved

form within 28 days after the day the group comes into existence.

(3) This section does not limit section 703-58 or 719-76 (about giving

notice of a new group) of the Income Tax Assessment Act 1997.

Subdivision 48-T--Other matters

Table of sections

48-800

Objecting to decisions

48-820

How amounts are to be paid

Schedule 2 Quarterly R&D credits

Part 1 Main amendment

34 Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013

48-840

Alternative constitutional basis

48-800 Objecting to decisions

A person who is dissatisfied with a decision of the Commissioner

under any of the following provisions may object against it in the

manner set out in Part IVC:

(a) subsection 48-5(1);

(b) subsection 48-210(3);

(d) subsection 48-225(3);

(e) subsection 48-410(2);

(f) subsection 48-420(1);

(g) subsection 48-420(2).

48-820 How amounts are to be paid

(1) Payments under this Division to or by you must be by:

(a) a means of

electronic payment; or

(b) a method applying to you under subsection (2).

Note:

You are liable to an administrative penalty if you fail to comply with

paragraph (a) or (b) when making payments under this Division (see

section 288-20).

(2) The Commissioner may, in writing, approve a method by which

payments under this Division to or by an entity may be made.

Note:

Different methods can be approved for different classes of entities, see

subsection 33(3AB) of the Acts Interpretation Act 1901.

(3) An approval may be expressed to apply from a day before the

approval is made.

48-840 Alternative constitutional basis

(1) Without limiting its effect apart from this subsection, this Division

has the effect it would have if:

(a) subsection (2) had not been enacted; and

(b) a

quarterly credit amount could only be worked out for an

entity that:

(i) is a

constitutional corporation; or

Quarterly R&D credits Schedule 2

Main amendment Part 1

Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013 35

(ii) has its registered office (within the meaning of the

Corporations Act 2001) or principal place of business

(within the meaning of that Act) located in a Territory.

(2) Without limiting its effect apart from this subsection, this Division

has the effect it would have if:

(a) subsection (1) had not been enacted; and

(b)

quarterly credit amounts could only be worked out in respect

of activities, or parts of activities, conducted or to be

conducted:

(i) solely in a Territory; or

(ii) solely outside of Australia; or

(iii) solely in a Territory and outside of Australia; or

(iv) for the dominant purpose of supporting

core R&D

activities conducted, or to be conducted, solely in a

Territory.

Schedule 2 Quarterly R&D credits

Part 2 Innovation Australia's role

36 Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013

Part 2

--Innovation Australia's role

Industry Research and Development Act 1986

2 Section 26A

Omit "The R&D entity can seek an advance finding to get", substitute

"The Board may make an advance finding to give".

3 Section 26A

Omit "The R&D entity can seek a", substitute "The Board may make

a".

4 Paragraph 27L(2)(a)

Repeal the paragraph, substitute:

(a) a finding in force under subsection 28A(1) (advance findings

about activities) is about an activity conducted during an

income year and is related to an R&D entity; and

5 Section 28

Omit "An R&D entity can seek" (wherever occurring), substitute "The

Board may make".

6 Section 28A

Repeal the section, substitute:

28A Advance findings about the nature of activities

(1) The Board may make one or more findings to the following effect

about an activity that is related to an R&D entity:

(a) that all or part of the activity is a core R&D activity;

(b) that all or part of the activity is a supporting R&D activity in

relation to one or more specified core R&D activities for

which the entity has been or could be registered under

section 27A for an income year;

(i) a core R&D activity; nor

(ii) a supporting R&D activity of a kind covered by

paragraph (b).

Quarterly R&D credits Schedule 2

Innovation Australia's role Part 2

Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013 37

Note 1:

A finding is reviewable (see Division 5).

Note 2:

A finding binds the Commissioner for the purposes of income tax

assessments and the provision of quarterly credits (see

subsections 355-705(2) and (3) of the Income Tax Assessment Act

1997).

(2) The Board must not make a finding under subsection (1) about an

activity unless the Board is satisfied that the activity:

(a) is being conducted, or has been completed, during the income

year applying under subsection (3); or

(b) is yet to be conducted, but that it is reasonable to expect that

the activity will be conducted in any or all of the following

income years:

(i) the income year applying under subsection (3);

(ii) either of the next 2 income years.

(3) The income year applying under this subsection is either:

(a) the income year in which the process of considering whether

to make the finding starts; or

(b) the previous income year, if this is preferred by the entity

causing this process to start, and clearly stated as such:

(i) in any application or request (see subsection 28AA(1))

causing this process to start; or

(ii) in the Board's reasons for making, or not making, the

finding, if the Board causes this process to start on its

own initiative.

However, paragraph (b) does not apply if this process starts after

the R&D entity has applied to register activities under section 27A

for that previous income year.

Note:

The process of considering whether to make the finding starts when

the application or request is made, or when the Board starts

considering whether to make the finding on its own initiative.

(4) If the Board makes a finding under subsection (1) about an activity

that is being conducted, or has been completed, during the income

year applying under subsection (3), the Board may specify in the

finding the times to which the finding relates.

(5) This section has effect subject to section 32B (findings cannot be

inconsistent with any earlier findings).

Schedule 2 Quarterly R&D credits

Part 2 Innovation Australia's role

38 Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013

7 After section 28A

Insert:

28AA Causing advance findings to be made

(1) If:

(a) an R&D entity applies for one or more findings under

subsection 28A(1) about an activity; or

(b) the Commissioner:

(i) requests one or more findings under subsection 28A(1)

about an activity that is related to an R&D entity; and

(ii) does not later withdraw the request;

the Board must:

part of the activity; or

(d) if justified in accordance with the decision-making

principles--refuse to make a finding under that subsection

about all or part of the activity.

Note 1:

For requirements of applications by R&D entities, see section 28G.

Note 2:

Refusing to make a finding is reviewable (see Division 5).

Note 3:

Section 32A deals with the decision-making principles.

(2) The Board may also make a finding under subsection 28A(1) on its

own initiative in accordance with any applicable decision-making

principles.

Note:

Section 32A deals with the decision-making principles.

8 Subsection 28C(1)

Repeal the subsection, substitute:

(1) The Board may make one or more findings to the following effect

about an activity that is related to an R&D entity:

(a) that all or part of the activity is an activity (the overseas

activity) that meets the conditions in section 28D;

(b) that all or part of the activity is not an activity that meets the

conditions in section 28D.

Note 1:

A finding is reviewable (see Division 5).

Note 2:

An effect of a finding under paragraph (a) is that a tax offset may be

available for expenditure incurred on the overseas activity after the

Quarterly R&D credits Schedule 2

Innovation Australia's role Part 2

Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013 39

finding comes into force (see Division 355 of the Income Tax

Assessment Act 1997, in particular paragraphs 355-210(1)(d) and (e)

of that Act).

9 At the end of Subdivision C of Division 3 of Part III

Add:

28DA Causing overseas activity findings to be made

(1) If:

(a) an R&D entity applies for one or more findings under

subsection 28C(1) about an activity; or

(b) the Commissioner:

(i) requests one or more findings under subsection 28C(1)

about an activity that is related to an R&D entity; and

(ii) does not later withdraw the request;

the Board must:

part of the activity; or

(d) if justified in accordance with the decision-making

principles--refuse to make a finding under that subsection

about all or part of the activity.

Note 1:

For requirements of applications by R&D entities, see section 28G.

Note 2:

Refusing to make a finding is reviewable (see Division 5).

Note 3:

Section 32A deals with the decision-making principles.

(2) The Board may also make a finding under subsection 28C(1) on its

own initiative in accordance with any applicable decision-making

principles.

Note:

Section 32A deals with the decision-making principles.

10 Subsection 28E(1)

Repeal the subsection, substitute:

(1) If an R&D entity has acquired, or has acquired the right to use,

particular technology wholly or partly for the purposes of one or

more R&D activities conducted, or to be conducted, during one or

more income years, the Board may make a finding to the effect:

(a) that the technology is core technology for the R&D activities;

Schedule 2 Quarterly R&D credits

Part 2 Innovation Australia's role

40 Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013

(b) that the technology is not core technology for the R&D

activities.

Note 1:

A finding is reviewable (see Division 5).

Note 2:

A finding under paragraph (a) means that a tax offset will not be

available for expenditure incurred in acquiring, or in acquiring the

right to use, the technology for the R&D activities (see

subsection 355-225(2) of the Income Tax Assessment Act 1997).

11 Subsections 28E(3) and (4)

Repeal the subsections.

12 At the end of Subdivision D of Division 3 of Part III

Add:

28EA Causing core technology findings to be made

(1) If:

(a) an R&D entity applies for a finding under subsection 28E(1)

about the R&D entity, one or more R&D activities and

particular technology; or

(b) the Commissioner:

(i) requests a finding under subsection 28E(1) about one or

more R&D activities, and particular technology, that are

related to an R&D entity; and

(ii) does not later withdraw the request;

the Board must:

activities and the technology; or

(d) if justified in accordance with the decision-making

principles--refuse to make a finding under that subsection

about the R&D activities and the technology.

Note 1:

For requirements of applications by R&D entities, see section 28G.

Note 2:

Refusing to make a finding is reviewable (see Division 5).

Note 3:

Section 32A deals with the decision-making principles.

(2) The Board may also make a finding under subsection 28E(1) on its

own initiative in accordance with any applicable decision-making

principles.

Note:

Section 32A deals with the decision-making principles.

Quarterly R&D credits Schedule 2

Innovation Australia's role Part 2

Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013 41

13 Section 28F (heading)

Repeal the heading, substitute:

28F Notice of findings or of decisions refusing to make findings

14 Subsections 28F(1) and (2)

Repeal the subsections, substitute:

(1) The Board must notify an R&D entity in writing of any findings,

and of any decisions refusing to make findings, under this Division

that are related to the R&D entity.

15 Subsection 28F(3)

Omit "or (2)".

16 Subsection 28F(3) (note)

Omit "applicant's", substitute "R&D entity's".

17 Subsection 28F(4)

Omit "the notice if the notice includes one or more certificates",

substitute "each notice under subsection (1) of a finding".

18 Subsection 28G(1) (heading)

Repeal the heading, substitute:

Applications by R&D entities for findings

19 Subsection 28G(2)

Omit "An", substitute "However, an".

20 Subsection 28H(1)

Repeal the subsection, substitute:

(1) The Board may request an R&D entity in writing to give such

specified information, or specified kinds of information, to the

Board as the Board believes could be relevant to the making of a

finding under this Division that is related to the R&D entity.

(1A) However, if as described in section 28B another entity applied for

the finding on behalf of the R&D entity, the Board must first

Schedule 2 Quarterly R&D credits

Part 2 Innovation Australia's role

42 Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013

request in writing the information or kinds of information from that

other entity.

21 Subsection 28H(2)

Omit "The request", substitute "A request under subsection (1) or

(1A)".

22 Subsection 28H(2) (note 3)

Repeal the note, substitute:

Note 3:

A failure to give the information may result in a refusal to make a

finding.

23 Subsection 28H(3)

Omit "The request", substitute "A request under subsection (1) or

(1A)".

24 Subsection 28H(4)

After "subsection (1)", insert "or (1A)".

25 Section 30A (table items 11 to 13)

Repeal the items, substitute:

An advance finding about the nature of

an activity

Subsection 28A(1)

11A

Refusing to make an advance finding

about the nature of an activity

Paragraph 28AA(1)(d)

A finding about an activity to be

conducted outside Australia

Subsection 28C(1)

12A

Refusing to make a finding about an

activity to be conducted outside

Australia

Paragraph 28DA(1)(d)

A finding about particular technology

Subsection 28E(1)

13A

Refusing to make a finding about

particular technology

Paragraph 28EA(1)(d)

26 Subsection 30B(2) (note)

Omit "or 11", substitute ", 11, 12 or 13".

27 At the end of section 32A

Add:

Quarterly R&D credits Schedule 2

Innovation Australia's role Part 2

Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013 43

; (d) whether making a finding under Division 3 on its own

initiative is justified.

28 Paragraph 47(2A)(c)

Omit "or the Income Tax Assessment Act 1997", substitute ", the

Income Tax Assessment Act 1997 or Division 48 in Schedule 1 to the

Taxation Administration Act 1953".

29 At the end of subsection 47(2A)

Add:

Note:

Division 48 in Schedule 1 to the Taxation Administration Act 1953 is

about crediting the R&D tax offset on a quarterly basis.

Schedule 2 Quarterly R&D credits

Part 3 Other amendments

44 Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013

Part 3

Other amendments

Income Tax Assessment Act 1936

30 After subsection 262A(2AAE)

Insert:

(2AAF) Subsection (1) applies to an entity for whom a varied amount

applies under section 48-210 in Schedule 1 to the Taxation

Administration Act 1953 even if the entity is not carrying on a

business.

Income Tax Assessment Act 1997

31 Subparagraph 355-705(1)(a)(iii)

Omit "about", substitute "relating to".

32 Subsection 355-705(1)

Omit all the words after "the finding binds the Commissioner",

substitute:

for the purposes of:

(as appropriate); and

(d) for a finding under section 28E of that Act--the R&D

entity's participation in the

quarterly credits system for the

instalment quarters in the income years.

33 Subsections 355-705(2) and (3)

Repeal the subsections, substitute:

Advance findings about activities yet to be completed

(2) If:

(a)

Innovation Australia makes a finding under

subsection 28A(1) of the Industry Research and Development

Act 1986 relating to an

R&D entity and all or part of an

activity; and

Quarterly R&D credits Schedule 2

Other amendments Part 3

Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013 45

(b) Innovation Australia gives the Commissioner a certificate

under that Act setting out the finding; and

during the income year applying under subsection 28A(3) of

that Act for the finding;

the finding binds the Commissioner for the purposes of:

(d) assessments of the R&D entity for the income year and the

next 2 income years; and

(e) the R&D entity's participation in the

quarterly credits

system for the

instalment quarters in the income year or in

the next 2 income years.

Advance findings about completed activities

(3) However, if that activity is completed during the income year

applying under subsection 28A(3) of that Act for that finding, that

finding binds the Commissioner for the purposes of:

(a) assessments of the

R&D entity for the income year; and

(b) the R&D entity's participation in the

quarterly credits

system for the

instalment quarters in the income year.

34 Subparagraph 355-710(1)(a)(iii)

Repeal the subparagraph, substitute:

(iii) a finding under section 28A or 28C of that Act relating

to an R&D entity and all or part of an activity conducted

or to be conducted during one or more income years; or

35 Subparagraph 355-710(1)(a)(iv)

Omit "about", substitute "relating to".

36 Subsection 721-10(2) (after table item 60)

Insert:

section 48-230 in Schedule 1 to the

Taxation Administration Act 1953

(negative quarterly credit amounts)

the

instalment quarter to

which the negative

quarterly

credit amount relates

62A

section 48-300 in Schedule 1 to the

Taxation Administration Act 1953 (debit

equal to total quarterly credit amounts

paid)

the income year to which the

debit relates

Schedule 2 Quarterly R&D credits

Part 3 Other amendments

46 Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013

62B

section 48-350 in Schedule 1 to the

Taxation Administration Act 1953

(general interest charge on excess

quarterly credits)

the

instalment quarter to

which the general interest

charge relates

62C

section 48-425 in Schedule 1 to the

Taxation Administration Act 1953

(quarterly credit amounts for quarters for

which you no longer participate)

the

instalment quarters for

which you no longer

participate

37 Subsection 995-1(1)

Insert:

managing entity, in relation to you, is an entity set out in a table

item in subsection 48-110(2) in Schedule 1 to the Taxation

Administration Act 1953 that applies to you.

38 Subsection 995-1(1)

Insert:

quarterly credit amount has the meaning given by section 48-200

in Schedule 1 to the Taxation Administration Act 1953.

39 Subsection 995-1(1)

Insert:

quarterly credit due day has the meaning given by section 48-235

in Schedule 1 to the Taxation Administration Act 1953.

40 Subsection 995-1(1)

Insert:

quarterly credits system means the system described in

Division 48 in Schedule 1 to the Taxation Administration Act 1953

for providing quarterly credits during an income year for certain

tax offsets to which entities expect to be entitled for the income

year.

Taxation Administration Act 1953

41 Subsection 8AAB(4) (after table item 44)

Insert:

Quarterly R&D credits Schedule 2

Other amendments Part 3

Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013 47

44A

48-230 in

Schedule 1

Taxation Administration

Act 1953

negative quarterly

credit amounts

44B

48-305 in

Schedule 1

Taxation Administration

Act 1953

part of debit exceeding

total tax offset refunds

44C

48-350 in

Schedule 1

Taxation Administration

Act 1953

excess quarterly credit

amount worked out

using varied amounts

44D

48-425 in

Schedule 1

Taxation Administration

Act 1953

quarterly credit

amounts for quarters

for which you no

longer participate

42 Subsection 250-10(2) in Schedule 1 (after table item 135)

Insert:

135A

negative quarterly

credit amounts

48-230 in

Schedule 1

Taxation Administration Act 1953

135B

debit equal to total

quarterly credit

amounts paid

48-300 in

Schedule 1

Taxation Administration Act 1953

135C

quarterly credit

amounts for quarters

for which you no

longer participate

48-425 in

Schedule 1

Taxation Administration Act 1953

43 Subsection 286-75(2) in Schedule 1

After "these Acts", insert "or provisions".

44 At the end of subsection 286-75(2) in Schedule 1

Add:

; or (d) subsection 48-405(1) in this Schedule.

45 Paragraph 288-20(b) in Schedule 1

Omit "electronically;", substitute "electronically; or".

46 After paragraph 288-20(b) in Schedule 1

Insert:

pay an amount electronically or by an approved method;

Schedule 2 Quarterly R&D credits

Part 3 Other amendments

48 Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013

47 Paragraph 298-5(c) in Schedule 1

After "Division 16", insert "or 48".

48 Subsection 355-65(4) in Schedule 1 (table item 6)

Repeal the item, substitute:

Innovation Australia

is for the purpose of administering any

Commonwealth law relating to:

(a) venture capital; or

(b) research and development (including

related tax incentives).

49 Subsections 444-120(1) and (6) in Schedule 1

Before "the

MRRT law", insert "Division 48 or".

Taxation (Interest on Overpayments and Early Payments)

Act 1983

50 After Part IIIAA

Insert:

Part IIIAB--Interest on delayed payments under

quarterly credits system

12BA Definitions

In this Part:

assessment day means the day the Commissioner makes an

assessment (within the meaning of the Income Tax Assessment Act

1997):

(a) of the total of the entity's tax offset refunds (within the

meaning of the Income Tax Assessment Act 1997) for the

year of income for which the quarterly credits system amount

is payable; or

(b) that the entity can get no such refunds for that year of

income.

Quarterly R&D credits Schedule 2

Other amendments Part 3

Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013 49

instalment quarter has the same meaning as in the Income Tax

Assessment Act 1997.

interest start day has the meaning given by section 12BB.

quarterly credits system amount means:

(a) a quarterly credit amount (within the meaning of the Income

Tax Assessment Act 1997); or

(b) an amount repayable under subsection 48-430(1) in

Schedule 1 to the Taxation Administration Act 1953.

RBA has the same meaning as in section 8AAZA of the Taxation

Administration Act 1953.

RBA surplus has the same meaning as in section 8AAZA of the

Taxation Administration Act 1953.

12BB Meaning of interest start day

(1) The interest start day, for a quarterly credits system amount, is:

(a) if the amount is a quarterly credit amount (within the

meaning of the Income Tax Assessment Act 1997)--the

amount's quarterly credit due day (within the meaning of that

Act); or

(b) if the amount is an amount repayable under

subsection 48-430(1) in Schedule 1 to the Taxation

Administration Act 1953--the last day the amount is

repayable under that subsection.

(2) However, if on that day your circumstances do not enable the

amount to be paid to you in accordance with subsection 48-820(1)

in Schedule 1 to the Taxation Administration Act 1953, the

amount's interest start day is the 14th day after the day the

Commissioner becomes aware that your circumstances have

changed to enable the amount to be paid to you in accordance with

that subsection.

Note:

Subsection 48-820(1) in Schedule 1 to the Taxation Administration

Act 1953 is about electronic payments etc.

Schedule 2 Quarterly R&D credits

Part 3 Other amendments

50 Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013

12BC Interest for late refunds of RBA surpluses after amounts

become payable

(1) If:

(a) disregarding subsections 48-225(2) and (3) in Schedule 1 to

the Taxation Administration Act 1953:

(i) a quarterly credits system amount is payable to an

entity; and

(ii) that amount is to be allocated to an RBA of the entity;

and

(iii) on that amount's interest start day, the Commissioner is

required under subsection 8AAZLF(1) of the Taxation

Administration Act 1953 to refund to the entity an RBA

surplus for that RBA; and

(b) all or part of the refund takes place after that interest start

day;

then interest is payable by the Commissioner to the entity on so

much of the refund as takes place after that interest start day.

(2) Interest under this Part is payable for the period:

(a) starting on the day after that interest start day; and

(b) ending at the earlier of:

(i) the day the refund finishes taking place; and

(ii) the assessment day.

12BD Interest for late payments of amounts

(1) If:

(a) disregarding subsections 48-225(2) and (3) in Schedule 1 to

the Taxation Administration Act 1953:

(i) a quarterly credits system amount is payable to an

entity; and

(ii) that amount is not allocated to an RBA of the entity; and

(b) the Commissioner pays all or part of that amount to the entity

after that amount's interest start day;

then interest is payable by the Commissioner to the entity on so

much of that amount as is paid after that interest start day.

(2) Interest under this Part is payable for the period:

(a) starting on the day after that interest start day; and

Quarterly R&D credits Schedule 2

Other amendments Part 3

Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013 51

(b) ending at the earlier of:

(i) the day that amount is completely paid to the entity; and

(ii) the assessment day.

12BE Rate of interest

Interest under this Part is payable at the base interest rate (within

the meaning of the Income Tax Assessment Act 1997).

Tax Laws Amendment (Research and Development) Act 2011

51 Subsection 2(1) (table item 7)

Omit "Schedules 3A and 4", substitute "Schedule 4".

52 Schedule 3A

Repeal the Schedule.

Schedule 2 Quarterly R&D credits

Part 4 Application and transitional provisions

52 Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013

Part 4

Application and transitional provisions

53 Application of amendments

(1)

The amendments made by Parts 1 and 3 of this Schedule apply in

relation to instalment quarters starting on or after 1 January 2014.

(2)

The amendments made by Part 2 of this Schedule apply in relation to

processes for making findings that start on or after the commencement

of that Part.

Note:

Part 2 relates to findings under Division 3 of Part III of the Industry Research and

Development Act 1986.

54 Transitional

current findings of Innovation Australia

(1)

This item applies to a finding of the Board if:

(a) the finding was made under subsection 28A(1), 28C(1) or

28E(1) of the Industry Research and Development Act 1986;

and

(b) the finding was in force immediately before the

commencement of this item.

(2)

The finding has effect, after the commencement of this item, as if it had

been made under that subsection as amended by this Schedule.

Refunding excess GST Schedule 3

Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013 53

Schedule 3

Refunding excess GST

A New Tax System (Goods and Services Tax) Act 1999

1 Section 9-99 (at the end of the table)

Add:

Excess GST

Division 142

2 Subsection 17-5(1) (note)

Repeal the note, substitute:

Note 1:

For the basic rules on what is attributable to a particular period, see

Division 29.

Note 2:

For further rules if you have excess GST for the period, see

Division 142.

3 Section 19-99 (after table item 1AA)

Insert:

1AB

Excess GST and cancelled supplies

Division 142

4 Subsection 35-5(1) (note 1)

Omit ", and section 105-65 in Schedule 1 to,".

5 Section 35-99 (after table item 1)

Insert:

Excess GST

Division 142

6 Section 35-99 (note)

Repeal the note.

7 Section 37-1 (after table item 10A)

Insert:

10B

Excess GST

Division 142

8 Section 51-60 (note 1)

Omit ", and section 105-65 in Schedule 1 to,".

Schedule 3 Refunding excess GST

54 Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013

9 Section 54-65 (note 1)

Omit ", and section 105-65 in Schedule 1 to,".

10 At the end of Part 4-4

Add:

Division 142--Excess GST

Table of Subdivisions

142-A Excess GST unrelated to adjustments

142-B GST related to cancelled supplies

142-C Passed-on GST

142-1 What this Division is about

Excess GST is not to be refunded if this would give an entity a

windfall gain.

Note:

Refunding excess GST to a supplier will give it a windfall gain if it

has already passed on the excess GST in the price of the supply (and

not reimbursed the recipient).

Subdivision 142-A--Excess GST unrelated to adjustments

142-5 When this Subdivision applies

(1) This Subdivision applies if, after disregarding any amounts

covered by subsection (2), your

assessed net amount for a tax

period takes into account an amount of GST exceeding that which

is payable.

Note:

This Subdivision applies whether or not you have paid, or been

refunded, the assessed net amount.

Example: Sunny Co mistakenly reports a negative net amount of $4,000 made

up of GST of $10,000 less input tax credits of $14,000. In fact, Sunny

Co's GST should have been $8,000 making its negative net amount

$6,000. Sunny Co has excess GST of $2,000.

(2) Disregard the following amounts:

Refunding excess GST Schedule 3

Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013 55

(a) an amount of GST that was correctly payable and attributable

to the tax period, but which later becomes the subject of a

decreasing adjustment;

(b) an amount of GST that is payable, but is correctly attributable

to a different tax period.

142-10 Refunding the excess GST

For the purposes of each

taxation law, so much of the excess from

subsection 142-5(1) (the excess GST) as you have

passed on to

another entity is taken to have always been:

(a) payable; and

(b) on a

taxable supply;

until you reimburse the other entity for the passed-on GST.

Note 1:

If you reimburse the passed-on GST so that this section ceases to

apply there will be an adjustment event under paragraph 19-10(1)(b)

or (c). You will have a decreasing adjustment (see section 19-55) and

the other entity may have an increasing adjustment (see

section 19-80).

Note 2:

The rest of the excess GST will be refunded as described in

section 155-75 in Schedule 1 to the Taxation Administration Act 1953.

Note 3:

While this section applies, paragraph 11-5(b) (about taxable supplies)

is satisfied for the corresponding acquisition by the other entity.

142-15 When section 142-10 does not apply

Commissioner satisfied is inappropriate for that section to apply

(1) Treat section 142-10 as never having applied to the extent that the

Commissioner, on request, is satisfied that its application would be

inconsistent with the principle that excess GST is not to be

refunded if this would give an entity a windfall gain.

Note:

Refusing to make the requested decision is a reviewable GST decision

(see Subdivision 110-F in Schedule 1 to the Taxation Administration

Act 1953).

(2) A request for a decision under subsection (1) must be made in the

approved form.

If there never was a supply

(3) Treat section 142-10 as never having applied to the extent that:

Schedule 3 Refunding excess GST

56 Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013

(a) you treated the excess GST as payable on a supply, but in

fact there never was a supply; and

(b) you reimburse the other entity for the

passed-on GST.

Note:

If you reimburse the passed-on GST, you will be refunded an

equivalent amount as described in section 155-75 in Schedule 1 to the

Taxation Administration Act 1953.

So far as it relates to your creditable acquisitions

(4) Section 142-10 does not apply for the purposes of applying

subsection 11-15(2) (about creditable purpose) to you.

If the recipient knows you have not paid the excess GST

(5) Section 142-10 does not apply for the purposes of applying a

taxation law to the other entity if, and while, that other entity

knows, or could reasonably be expected to have known, that you

have not paid the excess GST to the Commissioner.

Note:

Section 142-10 still applies for the purposes of applying taxation laws

to you.

Subdivision 142-B--GST related to cancelled supplies

142-20 Refunding GST relating to cancelled supplies

(1) This section applies If:

(a) your

assessed net amount for a tax period takes into account

an amount of GST on a supply; and

(b) you have a

decreasing adjustment attributable to a later tax

period as a result of the cancellation of the supply.

(2) Reduce:

(a) your

decreasing adjustment; and

(b) if the

recipient of the supply has a corresponding

increasing

adjustment--the recipient's increasing adjustment;

to the extent that you have

passed on that GST to the recipient, but

not reimbursed the recipient for the passed-on GST.

(3) This section has effect despite sections 19-55 (about decreasing

adjustments for supplies) and 19-80 (about increasing adjustments

for acquisitions).

Refunding excess GST Schedule 3

Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013 57

Subdivision 142-C--Passed-on GST

142-25 Working out if GST has been passed on

(1) Some or all of an amount of GST may have been passed on to

another entity even if:

(a) a

tax invoice is not issued to or by that other entity; or

(b) a tax invoice issued to or by that other entity relates to that

GST, but does not contain enough information to enable that

GST to be clearly ascertained.

(2) If:

(a) a

tax invoice is issued to or by another entity; and

(b) it contains enough information to enable some or all of an

amount of GST to be clearly ascertained;

the tax invoice is prima facie evidence of that part of that GST

having

passed on to that other entity.

11 Section 195-1

Insert:

passed on has a meaning affected by section 142-25.

12 Section 195-1 (note at the end of the definition of taxable

supply)

Omit "and 113-5", substitute ", 113-5 and 142-10".

Income Tax Assessment Act 1936

13 Subsection 98A(2) (note)

Omit ", and section 105-65 in Schedule 1 to,".

14 Subsection 98B(4) (note)

Omit ", and section 105-65 in Schedule 1 to,".

Taxation Administration Act 1953

15 Section 105-65 in Schedule 1

Repeal the section.

Schedule 3 Refunding excess GST

58 Tax Laws Amendment (2013 Measures No. 4) Bill 2013 No. , 2013

16 Subsection 110-50(2) in Schedule 1 (after table item 53)

Insert:

53A

refusing to make requested decision about excess

GST

subsection 142-15(1)

17 Application of amendments

General rule

(1)

The amendments made by this Schedule apply in relation to working

out your net amount for a tax period starting on or after 17 August

2012.

Exception for refunds claimed before the introduction day

(2)

Despite subitem (1), those amendments do not apply in relation to

working out your net amount for a tax period as part of an amendment

of an assessment if:

(a) the amendment is made, or applied for, before the

introduction day; and

(b) the amendment results, or (if made) would result, in the

assessment of that net amount no longer taking into account

all or part of an amount of GST exceeding that which is

payable.

Note:

This subitem does not apply to a later amendment applied for on or after the

introduction day. The amendments made by this Schedule will apply for working out

your net amount as part of that later amendment.

(3)

Despite subitem (1), those amendments do not apply in relation to

working out your net amount for a tax period as part of an objection

against an assessment if:

(a) you make that objection before the introduction day and in

the manner set out in Part IVC of the Taxation

Administration Act 1953; and

(b) the objection results, or (if allowed) would result, in the

assessment of that net amount no longer taking into account

all or part of an amount of GST exceeding that which is

payable.

Note:

This subitem does not apply to a later objection made on or after the introduction day.

The amendments made by this Schedule will apply for working out your net amount as

part of that later objection.

Commonwealth of Australia Bills

TAX LAWS AMENDMENT (2013 MEASURES NO. 4) BILL 2013