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This is a Bill, not an Act. For current law, see the Acts databases.
Western Australia
Debits Tax Assessment Bill 2001
CONTENTS
Part 1 -- Preliminary
1. Short title 2
2. Commencement 2
3. Relationship with other Acts 2
4. Meaning of terms used in this Act 2
Part 2 -- Liability and assessment
5. Debits tax on debits 3
6. Time for payment of debits tax 5
7. Liability to pay debits tax 5
8. Recovery of debits tax from customer 6
9. Monthly returns by financial institutions 6
Part 3 -- Certificated accounts
10. Application and issue of certificates 8
11. Duration of certification 8
12. Notification of debits that are not exempt or excluded 8
13. Refund of debits tax if certificate commences
retrospectively 9
14. Annual statement of certificated accounts 10
15. Revocation of certificates 10
16. Offences relating to certificates 11
Part 4 -- General
17. Deemed separate debits 12
18. Debits to be expressed in Australian currency 12
19. Exemptions under other written laws 12
20. Financial institution to keep records 13
21. Regulations 13
page i
84--1B
Debits Tax Assessment Bill 2001
Contents
Glossary 14
1. Definitions 14
2. Exempt debit 17
3. Excluded debit 18
page ii
Western Australia
LEGISLATIVE ASSEMBLY
Debits Tax Assessment Bill 2001
A Bill for
An Act relating to the assessment and collection of tax on debits
made to accounts kept with financial institutions.
The Parliament of Western Australia enacts as follows:
page 1
Debits Tax Assessment Bill 2001
Part 1 Preliminary
s. 1
Part 1 -- Preliminary
1. Short title
This Act may be cited as the Debits Tax Assessment Act 2001.
2. Commencement
5 This Act comes into operation on the day on which the Taxation
Administration Act 2001 comes into operation.
3. Relationship with other Acts
The Taxation Administration Act 2001 and the Debits Tax
Act 2001 are to be read with this Act as if they formed a single
10 Act.
4. Meaning of terms used in this Act
The Glossaries at the end of this Act and the Taxation
Administration Act 2001 define or affect the meaning of some
of the words and expressions used in this Act and also affect the
15 operation of other provisions.
page 2
Debits Tax Assessment Bill 2001
Liability and assessment Part 2
s. 5
Part 2 -- Liability and assessment
5. Debits tax on debits
(1) Debits tax is payable on a debit made to an account kept in
Western Australia.
5 (2) Debits tax is payable on a debit made to an account kept outside
Western Australia if --
(a) the account is not the head account in a third party
cheque arrangement;
(b) at the time the debit is made, the person in whose name
10 the account is kept, or if the account is kept in the name
of 2 or more persons any one of them, is a resident;
(c) the Commissioner is satisfied that the account was used
in connection with the transaction that resulted in the
debit for the purpose, or for purposes that included the
15 purpose, of enabling --
(i) the person in whose name the account is kept, or
if the account is kept in the name of 2 or more
persons, any one of them; or
(ii) any other person,
20 to avoid liability for payment of debits tax that would
have been imposed if the debit had been made to an
account kept in Western Australia; and
(d) the person concerned is not liable, in relation to the use
of the account, to pay tax of a similar kind to debits tax
25 under the laws of the place where the account is kept.
(3) Debits tax is payable on a debit made to the head account in a
third party cheque arrangement kept outside Western Australia
if --
(a) at the time the debit is made --
30 (i) institution A is a resident; or
page 3
Debits Tax Assessment Bill 2001
Part 2 Liability and assessment
s. 5
(ii) the customer, or if the customer's account is kept
in the name of 2 or more persons any one of
them, is a resident;
(b) the Commissioner is satisfied that the head account was
5 used in connection with the transaction that resulted in
the debit for the purpose, or for purposes that included
the purpose, of enabling --
(i) institution A;
(ii) the customer, or if the customer's account is kept
10 in the name of 2 or more persons, any one of
them; or
(iii) any other person,
to avoid liability for payment of debits tax that would
have been imposed if the debit had been made to an
15 account kept in Western Australia; and
(c) the person concerned is not liable, in relation to the use
of the account, to pay tax of a similar kind to debits tax
under the laws of the place where the head account is
kept.
20 (4) However, debits tax is not payable on --
(a) an exempt debit; or
(b) an excluded debit made to --
(i) a certificated account; or
(ii) an account kept outside Western Australia.
25 (5) In this section --
"third party cheque arrangement" means an arrangement
under which --
(a) a person (the "customer") keeps an account with a
financial institution ("institution A") (which account
30 is not an account as defined in this Act because the
customer cannot draw cheques on institution A);
page 4
Debits Tax Assessment Bill 2001
Liability and assessment Part 2
s. 6
(b) institution A keeps an account (the "head account")
with another financial institution ("institution B");
and
(c) the terms on which those accounts are kept --
5 (i) allow institution A to deliver to the customer
incomplete cheques drawn by institution A on
institution B;
(ii) allow the customer to complete and use those
cheques;
10 (iii) require institution B to honour those cheques;
(iv) require institution A to pay to institution B the
amounts necessary to enable institution B to
honour the cheques; and
(v) authorise institution A to debit those amounts
15 to the customer's account.
6. Time for payment of debits tax
Debits tax is due for payment within 14 days after the end of the
month in which the debit was made.
7. Liability to pay debits tax
20 (1) Debits tax on a debit is payable by --
(a) the financial institution; and
(b) the customer.
(2) However the financial institution is not liable to pay any debits
tax on a debit made to a certificated account or to an account
25 kept outside Western Australia.
(3) If 2 or more people are liable to pay debits tax on a debit, they
are jointly and severally liable.
(4) A person who is liable to pay debits tax is also liable to pay any
penalties, interest or other amount payable under a debits tax
30 Act in connection with the debits tax.
page 5
Debits Tax Assessment Bill 2001
Part 2 Liability and assessment
s. 8
8. Recovery of debits tax from customer
(1) If a financial institution has paid debits tax on a debit the
customer is liable to pay to the financial institution an amount
equal to the amount of the debits tax minus any amount --
5 (a) that has been refunded to the financial institution under
a debits tax Act in respect of the debit; or
(b) in respect of which an amount has been paid to the
financial institution under section 13.
(2) If 2 or more people are liable to pay the amount to a financial
10 institution, they are jointly and severally liable.
(3) A financial institution may recover an amount due under
subsection (1) --
(a) by debiting the amount to the account;
(b) as a debt due by the customer to the financial institution,
15 by action in a court of competent jurisdiction;
(c) in any other manner agreed between the financial
institution and the customer; or
(d) by any combination of those methods.
9. Monthly returns by financial institutions
20 (1) A financial institution must lodge a monthly return in relation to
all debits made during the month to accounts kept with the
financial institution in Western Australia on which debits tax is
payable by the institution.
Penalty: $5 000.
25 (2) If no such debits are made during a month, the financial
institution is to lodge a nil return for that month.
Penalty: $5 000.
(3) A monthly return must --
(a) be in an approved form; and
page 6
Debits Tax Assessment Bill 2001
Liability and assessment Part 2
s. 9
(b) be lodged with the Commissioner within 14 days after
the end of the month.
(4) The Commissioner may, by notice, permit a financial institution
to lodge separate monthly returns in relation to debits made to
5 accounts kept with a particular branch or branches of the
financial institution.
page 7
Debits Tax Assessment Bill 2001
Part 3 Certificated accounts
s. 10
Part 3 -- Certificated accounts
10. Application and issue of certificates
(1) If, on the application of a customer, the Commissioner is
satisfied that all debits to an account kept in Western Australia
5 are, or are likely to be, exempt debits or excluded debits, the
Commissioner is to issue a certificate for the account.
(2) An application for a certificate is to be in an approved form.
(3) If the Commissioner does not issue a certificate, the
Commissioner must notify the applicant to that effect.
10 11. Duration of certification
(1) The Commissioner must specify in the certificate the date with
effect from which the certificate is to take effect (the "start
date").
(2) The start date --
15 (a) may be before the date on which the certificate is issued;
(b) cannot be more than 5 years before the date on which
the application for the certificate was made; and
(c) must not be earlier than 28 June 1996 unless a certificate
could have been issued for the account before that date.
20 (3) A certificate comes into force with effect from the start date and
remains in force until midnight on the expiry date specified in
the certificate (if any) or until it is revoked.
12. Notification of debits that are not exempt or excluded
(1) If a debit that is not an exempt debit or an excluded debit is
25 made to a certificated account the customer must notify the
Commissioner within 7 days after the debit is made, unless the
Commissioner was notified in accordance with subsection (2)
before the debit was made.
Penalty: $20 000.
page 8
Debits Tax Assessment Bill 2001
Certificated accounts Part 3
s. 13
(2) If the customer for a certificated account becomes aware that a
debit that is not an exempt debit or an excluded debit will be, or
is likely to be, made to the account within the next 30 days, the
customer must notify the Commissioner within 7 days of
5 becoming aware of it.
Penalty: $20 000.
(3) A notification must be made in an approved form.
(4) If an account is kept in the name of 2 or more persons it is
sufficient compliance with subsection (1) or (2) if one of them
10 notifies the Commissioner in accordance with this section.
13. Refund of debits tax if certificate commences retrospectively
(1) If --
(a) the start date (within the meaning of section 11) for a
certificate is before the date on which the certificate was
15 issued;
(b) debits tax has been paid on a debit made to the account
on or after the start date; and
(c) debits tax would not have been payable on that debit had
the certificate been issued on the start date,
20 then debits tax is to be taken never to have been payable on that
debit and the Commissioner is to make a reassessment
accordingly.
(2) An application for a reassessment may be made --
(a) if the financial institution has recovered the amount of
25 the debits tax from the customer -- by the customer; or
(b) otherwise -- by the financial institution.
(3) Despite section 17 of the Taxation Administration Act 2001, the
Commissioner may make a reassessment under subsection (1)
of the amount of debits tax payable on any debit made to the
30 account after the start date, irrespective of when the original
assessment in relation to that debit was made.
page 9
Debits Tax Assessment Bill 2001
Part 3 Certificated accounts
s. 14
(4) If a customer who is entitled under this section to apply for a
reassessment of the amount of debits tax payable on a debit but
has not done so, presents the certificate referred to in
subsection (1)(a) to the financial institution --
5 (a) the financial institution is to pay to the customer an
amount equal to the amount of the debits tax; and
(b) the financial institution may then apply for a
reassessment instead of the customer.
(5) A financial institution that is entitled under subsection (4) to
10 apply for a reassessment may, instead of applying for a
reassessment, include in its monthly return lodged under
section 9 for the month in which the customer presented the
certificate a credit of an amount equal to the amount of debits
tax.
15 14. Annual statement of certificated accounts
(1) A financial institution with which one or more certificated
accounts are kept during a calendar year must give to the
Commissioner an annual statement in relation to all certificated
accounts kept with the institution during that year.
20 Penalty: $5 000.
(2) An annual statement must --
(a) be in an approved form; and
(b) be given to the Commissioner before 1 March in the
year after the year to which the statement relates (or
25 such later date as the Commissioner allows).
15. Revocation of certificates
(1) The Commissioner may revoke a certificate if the
Commissioner is satisfied that a debit that is not an exempt debit
or an excluded debit has been, or is to be, made to the account.
30 (2) Subsection (1) applies whether or not the Commissioner has
been notified under section 12.
page 10
Debits Tax Assessment Bill 2001
Certificated accounts Part 3
s. 16
(3) A revocation must be served on --
(a) the customer, or if the account is kept in the name of 2
or more persons, each of them; and
(b) the financial institution with which the account is kept.
5 (4) A revocation takes effect on the day, and at the time, it is served
on the financial institution.
16. Offences relating to certificates
A person must not --
(a) forge a certificate;
10 (b) utter a certificate that the person knows is forged;
(c) alter or sign a certificate without lawful authority;
(d) knowingly represent that a document is a certificate if it
is not; or
(e) knowingly represent that a certificate applies to an
15 account other than the account for which it was issued.
Penalty: $20 000.
page 11
Debits Tax Assessment Bill 2001
Part 4 General
s. 17
Part 4 -- General
17. Deemed separate debits
(1) A debit that would, but for this section, be a single debit made
to an account in respect of 2 or more transactions is taken to be
5 separate debits in relation to each of those transactions.
(2) Subsection (1) does not apply to a debit that is, or is in a class of
debits that are, prescribed for the purposes of this section.
(3) In this section --
"transaction" means the payment of a cheque, or the doing of
10 any other thing, that will result in the making of a debit to
an account.
18. Debits to be expressed in Australian currency
For the purposes of this Act the amount of a debit that is made
in a currency other than Australian currency, is the amount of
15 the debit converted to Australian currency as at the time the
debit was made.
19. Exemptions under other written laws
(1) A written law passed before 1 January 1991 that purports to
exempt a person from liability to pay a tax which could be taken
20 to include debits tax does not exempt that person from liability
to pay debits tax.
(2) A written law passed on or after 1 January 1991 that purports to
exempt a person from liability --
(a) to pay taxes under the laws of Western Australia; or
25 (b) to pay certain taxes under those laws that include debits
tax,
other than a law that expressly exempts a person from liability
to pay debits tax, does not exempt the person from liability to
pay debits tax.
page 12
Debits Tax Assessment Bill 2001
General Part 4
s. 20
20. Financial institution to keep records
A financial institution must make and retain sufficient records
(including any prescribed records) to enable its liability for
debits tax to be assessed by the Commissioner.
5 21. Regulations
(1) The Governor may make regulations prescribing all matters that
are required or permitted by a debits tax Act to be prescribed or
are necessary or convenient to be prescribed to give effect to a
debits tax Act.
10 (2) Regulations may create offences and provide, in respect of an
offence so created, for the imposition of a fine not exceeding
$5 000.
page 13
Debits Tax Assessment Bill 2001
Glossary
[s. 4]
1. Definitions
(1) Unless the contrary intention appears --
5 "account" means an account --
(a) kept with a financial institution (including an account kept
by way of withdrawable share capital in, or money
deposited with, a financial institution that is not a bank);
and
10 (b) to which payments may be debited by the institution in
respect of cheques drawn on the institution by the
customer;
"activity in the nature of a business" --
(a) includes the supplying of goods or services (other than
15 goods or services that are, or are in a class of goods or
services that are, prescribed for the purposes of this
paragraph) to the public for payment;
(b) does not include the carrying on of an activity that forms a
minor or insignificant part of the functions of the body
20 carrying it on; and
(c) need not be an activity carried on for profit;
"banking business" includes a business carried on by a financial
institution in the course of which the institution keeps accounts
for its customers;
25 "certificate" means a certificate issued under section 10;
"certificated account" means an account in respect of which a
certificate is in force;
"charitable organisation" means --
(a) a public benevolent or religious institution;
30 (b) a public hospital or a hospital carried on by an association
or other body of persons otherwise than for purposes of
profit or gain to the individual members of that association
or body;
page 14
Debits Tax Assessment Bill 2001
Glossary
(c) a university;
(d) a government college, a government school, or a college
or school carried on by an association or other body of
persons otherwise than for purposes of profit or gain to the
5 individual members of that association or body;
(e) a trust the moneys of which may be applied only for
charitable purposes;
(f) an institution established for any other charitable purpose;
(g) a society, institution or organisation established, and
10 carried on, solely for the purpose of raising money for, or
otherwise promoting the interests of an entity that is a
charitable organisation under paragraphs (a) to (f);
"cheque" has the same meaning as it has in the Cheques Act 1986 of
the Commonwealth;
15 "clause" means a clause in this Glossary;
"customer" means a person in whose name an account is kept;
"debit" means a debit to an account;
"debits tax" means the tax imposed by the Debits Tax Act 2001;
"debits tax Act" means any one or more of the following --
20 (a) the Debits Tax Act 2001;
(b) the Debits Tax Assessment Act 2001;
(c) the Taxation Administration Act 2001;
"excluded debit" means a debit that is excluded under clause 3;
"exempt debit" means a debit that is exempt under clause 2;
25 "financial institution" means a financial institution within the
meaning of the Cheques Act 1986 of the Commonwealth;
"government body" means --
(a) a department of the government of the Commonwealth or
of a State or Territory;
30 (b) an authority of the Commonwealth or of a State or
Territory; or
(c) a local government;
page 15
Debits Tax Assessment Bill 2001
Glossary
"incomplete", in relation to a cheque, means wanting in a material
particular necessary for the cheque to be, on its face, a complete
cheque;
"resident" means --
5 (a) an individual who --
(i) resides in Western Australia; or
(ii) is domiciled in Western Australia, unless the
Commissioner is satisfied that the person's
permanent place of residence is outside Western
10 Australia;
(b) a body corporate registered under the Corporations
Act 2001 of the Commonwealth that --
(i) is taken to be incorporated in Western Australia;
or
15 (ii) carries on business in Western Australia and
either --
(I) has its central management and control in
Western Australia; or
(II) has its voting power controlled by
20 shareholders who are residents of
Western Australia;
(c) a body corporate that is not registered under the
Corporations Act 2001 of the Commonwealth that --
(i) is incorporated in Western Australia; or
25 (ii) carries on business in Western Australia and
either --
(I) has its central management and control in
Western Australia; or
(II) has its voting power controlled by
30 shareholders who are residents of
Western Australia;
(d) a partnership or other unincorporated association or body
of persons, any member of which is a resident.
page 16
Debits Tax Assessment Bill 2001
Glossary
(2) In relation to a debit --
(a) a reference to "the account" is a reference to the account to
which the debit is made;
(b) a reference to "the customer" is a reference to the customer in
5 whose name the account is kept; and
(c) a reference to "the financial institution" is a reference to the
financial institution with which the account is kept.
2. Exempt debit
(1) A debit is exempt if it is made for the purpose of --
10 (a) reversing a credit previously made to an account;
(b) deducting an amount under section 221YHZC(1A) of the
Income Tax Assessment Act 1936 of the Commonwealth; or
(c) recovering from the customer an amount equal to the amount
of debits tax paid or payable by the financial institution.
15 (2) If, as a result of --
(a) the closure of a branch, or the amalgamation of branches, of a
financial institution;
(b) the conversion, updating or relocating of a financial
institution's data processing systems; or
20 (c) the loss by the customer of an electronic banking card issued
by a financial institution,
the financial institution --
(d) debits or credits an amount to an account solely for the
purpose of closing that account; and
25 (e) credits or debits the same amount to a new account kept with
the financial institution for the same customer,
then the debit referred to in paragraph (d) or (e) is exempt.
(3) A debit is exempt if it is, or is in a class of debits that are, prescribed
for the purposes of this subclause.
30 (4) If a debit made to an account is subsequently reversed, the debit is to
be taken to be, and to have always been, exempt.
page 17
Debits Tax Assessment Bill 2001
Glossary
3. Excluded debit
(1) A debit is excluded if the customer is --
(a) the Governor-General or the Governor of a State;
(b) the government of a country other than Australia.
5 (2) A debit is excluded if --
(a) the customer is a person who would, but for section 19, be
entitled to an exemption from debits tax by virtue of a written
law other than a debits tax Act; and
(b) the debit is made in relation to a transaction carried out by or
10 on behalf of the customer solely for the purpose of --
(i) in the case of an individual -- his or her private or
domestic affairs (which does not include the carrying
on by the individual of a business in Australia); or
(ii) in the case of an organisation -- engaging in its
15 official activities.
(3) A debit is excluded if --
(a) the customer is a charitable organisation; and
(b) the debit is made in relation to a transaction carried out by or
on behalf of the organisation solely in furtherance of its
20 objects.
(4) A debit is excluded if --
(a) the customer is a government body other than a body the sole
or principal function of which is to carry on an activity in the
nature of a business; and
25 (b) the debit is made in relation to a transaction entered into by or
on behalf of the government body that is not in connection
with the carrying on by that body of an activity in the nature
of a business.
(5) A debit is excluded if --
30 (a) the customer is a financial institution (other than the
institution with which the account is kept);
page 18
Debits Tax Assessment Bill 2001
Glossary
(b) either --
(i) the business carried on by the customer in Western
Australia consists wholly or principally of banking
business; or
5 (ii) all debits made, or to be made, to the account are in
connection with banking business carried on by the
customer in Western Australia;
and
(c) the account is not the head account in a third party cheque
10 arrangement (as defined in section 5).
(6) A debit is excluded if the debits tax that would be payable on the debit
if it were not excluded cannot be recovered from the customer by the
financial institution.
(7) A debit is excluded if it is, or is in a class of debits that are, prescribed
15 for the purposes of this subclause.
(8) A debit is excluded if the customer is an authority of the
Commonwealth, or of a State or Territory, that is, or is of a class of
authorities that are, prescribed for the purposes of this subclause.
(9) If an account is kept in the name of 2 or more persons, a reference in
20 this clause to "the customer" is a reference to all of them.
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