TAXATION (ADMINISTRATION) AMENDMENT BILL 2005

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This is a Bill, not an Act. For current law, see the Acts databases.

TAXATION (ADMINISTRATION) AMENDMENT BILL 2005

Taxation (Administration) Amendment Bill 2005
Mr Stirling

A BILL
for
AN ACT

to amend the Taxation (Administration) Act

NORTHERN TERRITORY OF AUSTRALIA

TAXATION (ADMINISTRATION) AMENDMENT ACT 2005

____________________

Act No. [ ] of 2005
____________________

TABLE OF PROVISIONS

Section

PART 1 – PRELIMINARY MATTERS

1. Short title
2. Commencement
3. Principal Act amended

PART 2 – AMENDMENTS RELATING TO EXEMPTION FROM DUTY FOR CERTAIN LAND-OWNING CORPORATIONS

4. Amendment of section 56C (Interpretation)

PART 3 – AMENDMENT RELATING TO EXTENSIONS OF PERIODS OR TIMES

5. Repeal and substitution of section 117

117.

Commissioner may extend specified periods or times

PART 4 – AMENDMENTS RELATING TO ABOLITION OF ELECTRONIC DEBIT TRANSACTION DUTY

6. Amendment of section 4 (Interpretation)
7. Repeal of Part III, Division 3B
8. Amendment of section 81 (Assessment)
9. Amendment of section 123A (Regulatory offences)
10. Amendment of section 126 (Books, accounts etc.)
11. New Part X

PART X – TRANSITIONAL MATTERS FOR TAXATION (ADMINISTRATION) AMENDMENT ACT 2005

136. Application of Act to certain electronic debit transactions made before 1 July 2005

PART 5 – AMENDMENT RELATING TO ASSESSMENTS OF DUTY IF CONTINGENT CONSIDERATION NOT PAID

12. New section 97A

97A.

Amendment of assessments if contingent consideration not paid

NORTHERN TERRITORY OF AUSTRALIA
____________________

Act No. [ ] of 2005
____________________

AN ACT

to amend the Taxation (Administration) Act

[Assented to [ ] 2005]
[Second reading [ ] 2005]

The Legislative Assembly of the Northern Territory enacts as follows:

PART 1 – PRELIMINARY MATTERS

1. Short title
This Act may be cited as the Taxation (Administration) Amendment Act 2005.

2. Commencement
(1) The provisions of this Part (except section 3) come into operation on the day on which the Administrator's assent to this Act is declared.

(2) Section 3 and Parts 2 and 3 are taken to have come into operation on 3 May 2005.

(3) Parts 4 and 5 come into operation on 1 July 2005.

3. Principal Act amended
This Act amends the Taxation (Administration) Act.

PART 2 – AMENDMENTS RELATING TO EXEMPTION FROM DUTY FOR CERTAIN LAND-OWNING CORPORATIONS

4. Amendment of section 56C (Interpretation)
(1) Section 56C(9), definition of "land", paragraphs (a), (b) and (c) –

omit, substitute

(a) an interest that is a relevant acquisition in a corporation entitled to prescribed property is acquired by virtue of a transaction that would be in accordance with section 8E of the Stamp Duty Act if the transaction was a conveyance of prescribed property within the meaning of section 8E(1) of that Act;

(2) Section 56C(9), definition of "land", paragraph (d) –

omit

of the family members

substitute

person

(3) Section 56C(9), definition of "land", paragraph (d), after "used" –

insert

solely or principally

PART 3 – AMENDMENT RELATING TO EXTENSIONS OF PERIODS OR TIMES

5. Repeal and substitution of section 117
Section 117 –

repeal, substitute

117. Commissioner may extend specified periods or times

(1) If this Act requires a person to take an action in respect of a specified period or within a specified time, the Commissioner may extend the period or time before or after its expiry.

(2) The extension of the period or time must be by written notice, directed to a particular person or to a class of persons, and may include conditions.

(3) If the notice is directed to a particular person, the Commissioner must serve the notice on the person.

(4) If the notice is directed to a class of persons, the Commissioner must publish the notice in the manner the Commissioner considers appropriate.

(5) A person required to take an action to which a notice of an extension of a period or time relates must do so in accordance with the notice.

PART 4 – AMENDMENTS RELATING TO ABOLITION OF ELECTRONIC DEBIT TRANSACTION DUTY

6. Amendment of section 4 (Interpretation)
Section 4(1), definition of "return" –

omit

29N, 42, 48,

substitute

42, 48

7. Repeal of Part III, Division 3B
Part III, Division 3B –

repeal

8. Amendment of section 81 (Assessment)
Section 81(1) –

omit

substitute

9. Amendment of section 123A (Regulatory offences)
Section 123A –

omit

29J, 29N,

10. Amendment of section 126 (Books, accounts etc.)
Section 126(1) –

omit

Divisions 3B, 6, 7 and 13 of Part III

substitute

Part III, Division 6, 7 or 13

11. New Part X
After section 135 –

insert

PART X – TRANSITIONAL MATTERS FOR TAXATION (ADMINISTRATION) AMENDMENT ACT 2005

136. Application of Act to certain electronic debit transactions made before 1 July 2005

Despite the amendments effected by Part 4 of the Taxation (Administration) Amendment Act 2005, this Act as in force immediately before 1 July 2005 continues to apply in relation to a liable debit transaction if the debit was entered in the liable account as a result of a withdrawal made before 1 July 2005.

PART 5 – AMENDMENT RELATING TO ASSESSMENTS OF DUTY IF CONTINGENT CONSIDERATION NOT PAID

12. New section 97A
After section 97 –

insert

97A. Amendment of assessments if contingent consideration not paid

(1) This section applies if payment of any part of the consideration

(the "contingent consideration") in respect of which a conveyance of dutiable property or marketable securities was charged with ad valorem duty is contingent on the occurrence of a future event and, on an application under subsection (3), it is shown to the satisfaction of the Commissioner that –

(a) the instrument effecting the conveyance was executed on or after 1 July 2005;

(b) the contingent consideration has not been paid;

(d) either –

(i) the event cannot occur in the future; or

(ii) the time for the occurrence of the event, as specified in the instrument, has passed or expired and cannot be extended.

(2) The contingent consideration is taken not to be, and never to have been, part of the consideration in respect of which the instrument is chargeable and the Commissioner must amend the assessment of the duty payable on the instrument accordingly.

(3) The application for amendment of the assessment must be made –

(a) in an approved form by the person liable to pay the duty; and

(b) within 3 years after the date of the assessment.

(4) In amending the assessment, the Commissioner must assess duty on whichever of the following is the greater:

(a) the consideration, calculated by subtracting the contingent consideration from the consideration in respect of which the conveyance was charged with ad valorem duty;

(b) the unencumbered value of the dutiable property or marketable securities.

(5) In subsection (1), a reference to the occurrence of an event includes a reference to an event not occurring.

____________________________
__________________

ALTERATION TO SECTION HEADING

On the day on which the Taxation (Administration) Act is amended by Part 5 of this Act, in addition to any alteration to section headings indicated in the text of this Act, the heading to section 97 of the Taxation (Administration) Act is altered by omitting "assessment" and substituting "assessments generally".

____________________________
__________________

EXPLANATORY STATEMENT

GENERAL OUTLINE

The purpose of this Bill is to put in place several revenue measures announced as part of the 2005-06 Budget. The Bill provides for:

� abolishing electronic debit transaction duty for transactions that occur after 30 June 2005, as well as for transitional matters;

� a refund where stamp duty has been assessed and paid on the basis of contingent consideration included in a contract executed on or after 1 July 2005, if the full amount of that consideration is not subsequently paid and will not be paid; and

� amendments consequential to the broadening of the family farm exemption by the Stamp Duty Amendment Bill 2005 and to the Commissioner of Taxes granting general extensions of time to classes of people for lodging and paying duty on conditional contracts.

NOTES ON CLAUSES

PART 1 – PRELIMINARY MATTERS

Clause 1. Short Title

This is a formal clause which provides for the citation of the Bill. The Bill when passed may be cited as the Taxation (Administration) Amendment Act 2005.

Clause 2. Commencement

This clause provides for various Parts of the Bill commencing at different times.

Subclause (1) provides that Part 1 of the Bill (containing the preliminary provisions), except section 3, commences on the Administrator’s assent being declared.

Subclause (2) provides that Parts 2 and 3 (relating respectively to family farms and conditional contracts) and section 3 are taken to have commenced on 3 May 2005.

Subclause (3) provides that Parts 4 and 5 (relating respectively to the abolition of duty on electronic debit transactions and assessments if contingent consideration is not paid) commence on 1 July 2005.

Clause 3. Principal Act amended

This clause provides that this Bill amends the Taxation (Administration) Act.

PART 2 – AMENDMENTS RELATING TO EXEMPTION FROM DUTY FOR CERTAIN LAND-OWNING CORPORATIONS

Clause 4. Amendment of section 56C (Interpretation)

This clause makes a consequential amendment to section 56C of the Taxation (Administration) Act as a result of clause 6 of the Stamp Duty Amendment Bill 2005. Clause 6 of the Stamp Duty Amendment Bill 2005:

� extends the existing exemption for the transfer of pastoral property between family members to primary production property generally; and

� broadens the exemption by allowing it to be claimed where this property is transferred either to or from certain closely held family companies and trusts.

PART 3 – AMENDMENT RELATING TO VARIATIONS OR EXTENSIONS OF PERIODS OR TIMES

Clause 5. Repeal and substitution of section 117

This clause repeals section 117 of the Taxation (Administration) Act and inserts a new section 117. The new section 117 removes the requirement for the Commissioner to serve a notice on a taxpayer in order to extend the time for that taxpayer to do an act. However, written notice is still required.

The effect of this provision is to allow the Commissioner to exercise the power generally in respect of a group or class of persons without the need to serve instruments on each person. For example, the Commissioner may issue a notice providing that in respect of all contracts that contain conditions, the time for lodging the instrument and paying stamp duty is extended from 60 days after execution until 60 days after the contract becomes unconditional.

PART 4 – AMENDMENTS RELATING TO ABOLITION OF DUTY ON ELECTRONIC DEBIT TRANSACTIONS

Clause 6. Amendment of section 4 (Interpretation)

This clause makes a consequential amendment to the definition of “return” as a result of clause 7 repealing Part III, Division 3B of the Taxation (Administration) Act. No further electronic debit transaction duty returns will be required after the June 2005 return for transactions that occur on or after 1 July 2005.

Clause 7. Repeal of Part III, Division 3B

This clause provides for the abolition of duty on electronic debit transactions by repealing Part III, Division 3B of the Taxation (Administration) Act.

Clause 8. Amendment of section 81 (Assessment)

This clause makes a consequential amendment to section 81 of the Taxation (Administration) Act as a result of clause 7 repealing Part III, Division 3B of the Taxation (Administration) Act.

Clause 9. Amendment of section 123A (Regulatory offences)

This clause makes a consequential amendment to section 123A of the Taxation (Administration) Act by omitting the references to sections 29J and 29N. This amendment is necessary because clause 7 repeals Part III, Division 3B of the Taxation (Administration) Act, including sections 29J and 29N. With the abolition of duty on electronic debit transactions, offences for a financial institution not registering or not lodging a return or for the non-payment of this duty are no longer required for transactions that occur on or after 1 July 2005.

Clause 10. Amendment of section 126 (Books, accounts etc.)

This clause makes a consequential amendment to section 126 of the Taxation (Administration) Act by omitting the reference to Part III, Division 3B. This amendment is necessary because clause 7 of the Bill repeals Part III, Division 3B of the Taxation (Administration) Act. With the abolition of duty on electronic debit transactions, documents relating to debit transactions made after 1 July 2005 will not be required to be kept for the purposes of Division 3B.

Clause 11. New Part X

This clause inserts a new Part X into the Taxation (Administration) Act entitled “PART X – TRANSITIONAL MATTERS FOR TAXATION (ADMINISTRATION) AMENDMENT ACT 2005”.

A new section 136 entitled “Definition” is inserted that defines the term “amendment Act” to mean this Bill. This term is used in new proposed section 137.

A new section 137 entitled “Application of Act to certain electronic debit transactions made before 1 July 2005” is inserted. New section 137 ensures that the Taxation (Administration) Act as in force immediately before 1 July 2005 continues to apply to any transactions liable to electronic debit transaction duty (that is transactions before 1 July 2005).

PART 5 – AMENDMENT RELATING TO ASSESSMENTS OF DUTY IF CONTINGENT CONSIDERATION NOT PAID

Clause 12. New section 97A

This clause inserts a new section 97A into the Taxation (Administration) Act entitled “Amendment of assessments if contingent consideration not paid”. New section 97A(1) provides that this section applies to an instrument executed on or after 1 July 2005 where consideration contingent on the occurrence of a future event has not and will not be paid.

New section 97A(2) requires the Commissioner to amend the assessment by disregarding the contingent consideration not paid. As a result, the Commissioner will refund any overpaid duty to the taxpayer.

New section 97A(3) requires the taxpayer to apply to the Commissioner for the amendment of the assessment, in an approved form, within 3 years after the date of the assessment. The 3-year period is consistent with section 97 of the Taxation (Administration) Act, which provides for amended assessments generally.

ALTERATION OF SECTION HEADING

This provision alters the heading of section 97 of the Taxation (Administration) Act by replacing the word “assessment” with “assessments generally”.

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