Commonwealth Numbered Acts

TAXATION LAWS AMENDMENT ACT 1987No. 61, 1987 - SECT 16

16. After section 221YB of the Principal Act the following section is
inserted: Liability to pay instalments of provisional tax

"221YBA. (1) This section applies in relation to the year of income commencing
on 1 July 1987 and all subsequent years of income.

"(2) Nothing in this section requires the payment of instalments of
provisional tax by a taxpayer in respect of income of a year of income, being:

   (a)  the actual taxable income from primary production of the taxpayer of
        the year of income, as defined in section 156; or

   (b)  the abnormal income, as defined in section 158C, of a taxpayer to whom
        Division 16A applies.

"(3) Subject to this section, where, but for sub-section (5) of this section,
a taxpayer would be liable under section 221YB to pay provisional tax in
respect of the income of a year of income, the taxpayer is liable to pay, in
respect of that income -

   (a)  where the year of income is the year of income commencing on 1 July
        1987 and paragraph (c) does not apply - 3 instalments of provisional
        tax;

   (b)  where the year of income is a subsequent year of income and paragraph
        (c) does not apply - 4 instalments of provisional tax; or

   (c)  where the taxpayer satisfies the Commissioner that more than 75% of
        the taxpayer's assessable income of the year of income will be derived
        after 1 December in the year of income - 2 instalments of provisional
        tax.

"(4) An instalment of provisional tax is not payable unless the Commissioner
has served an instalment notice in respect of the instalment.

"(5) Where instalments of provisional tax are payable by a taxpayer in respect
of the income of a year of income, provisional tax is not payable by the
taxpayer in respect of that income under section 221YB.

"(6) Where -

   (a)  an instalment notice is served on a taxpayer in respect of an
        instalment (in this sub-section referred to as the 'superseded
        instalment') of provisional tax for a year of income;

   (b)  paragraph (3) (c) did not apply as at the instalment notice date; and

   (c)  the Commissioner becomes satisfied as mentioned in paragraph (3) (c)
        at a time after the instalment notice date, the following provisions
        have effect:

   (d)  subject to paragraph (g), the superseded instalment shall be deemed
        never to have been payable;

   (e)  the taxpayer is not liable to pay instalments as mentioned in
        paragraph (3) (a) or (b);

   (f)  the taxpayer is liable to pay instalments as mentioned in paragraph
        (3) (c);

   (g)  if the day on which the first instalment payable by the taxpayer as
        mentioned in paragraph (3) (c) is due and payable (in this paragraph
        referred to as the 'new instalment day') is a later day than whichever
        day (in this paragraph referred to as the 'previous instalment day')
        is the later of the following days:

        (i)    1 February in the year of income;

        (ii)   the day on which the superseded instalment was due and payable,
               or would, but for paragraph (d), have been due and payable,
               section 207 applies as if -

        (iii)  the superseded instalment had become due and payable on the
               previous instalment day; and

        (iv)   so much of the superseded instalment as remained unpaid on the
               new instalment day had been paid on the new instalment day;

   (h)  if the taxpayer has paid an amount in respect of the superseded
        instalment, the Commissioner shall credit the amount so paid
        successively to -

        (i)    the payment of any instalment of provisional tax payable by the
               taxpayer for the year of income; and

        (ii)   the payment of any income tax payable by the taxpayer in
               respect of the income of any year of income, and shall refund
               to the taxpayer any part of that amount not so credited.

"(7) For the purposes of paragraph (3) (c) -

   (a)  'assessable income' does not include -

        (i)    salary or wages;

        (ii)   a prescribed payment from which a deduction has been, or in the
               opinion of the Commissioner will be, made under Division 3A; or

        (iii)  any amount included in assessable income under section 160ZO;
               and

   (b)  an amount that -

        (i)    is included in the assessable income of a taxpayer of a year of
               income under sub-section 92 (1) or Division 6 of Part III;

        (ii)   is derived by a taxpayer during, but not at a particular time
               during, a year of income; or

        (iii)  is income from property (not being income to which subparagraph
               (i) applies) derived by a taxpayer during a year of income from
               an associate of the taxpayer, shall be taken to have been
               derived by the taxpayer at such time, or at such times and in
               such proportions, as the Commissioner considers reasonable
               having regard to -

        (iv)   where sub-paragraph (i) applies in respect of a partnership or
               a trust estate - the time, or the times, when income was
               derived by the partnership or by the trustee of the trust
               estate, as the case may be;

        (v)    where sub-paragraph (iii) applies - the time, or the times,
               when income was derived by the associate; and

        (vi)   in any case - any relevant matters.

"(8) For the purposes of the application of sub-paragraph (7) (b) (iv) and
this sub-section in relation to a taxpayer in relation to a partnership or a
trust estate -

   (a)  where -

        (i)    the partnership or the trustee of the trust estate, as the case
               may be, derives income directly or indirectly under or as a
               result of an arrangement (whether entered into or carried out
               before or after the commencement of this section); and

        (ii)   the Commissioner is of the opinion that the person, or one of
               the persons, who entered into or carried out the arrangement or
               any part of the arrangement did so for the purpose of securing
               the application of paragraph (3) (c) in relation to the
               taxpayer or in relation to the taxpayer and another taxpayer or
               other taxpayers (whether or not that person who entered into or
               carried out the arrangement or any part of the arrangement is
               the taxpayer or is the other taxpayer or one of the other
               taxpayers), the Commissioner may treat the income as having
               been derived at such time, or at such times and in such
               proportions, as the Commissioner considers would have been, or
               might reasonably be expected to have been, the case if the
               arrangement had not been entered into or carried out; and

   (b)  income from property that was derived by the partnership or the
        trustee of the trust estate, as the case may be, during a year of
        income from an associate of the partnership or of the trustee shall be
        taken to have been derived by the partnership or trustee at such time,
        or at such times and in such proportions, as the Commissioner
        considers reasonable having regard to -

        (i)    the time, or the times, when income was derived by the
               associate; and

        (ii)   any other relevant matters.

"(9) For the purposes of sub-section (8) -

   (a)  'arrangement' means -

        (i)    any agreement, arrangement, understanding, promise or
               undertaking, whether express or implied, and whether or not
               enforceable, or intended to be enforceable, by legal
               proceedings; and

        (ii)   any scheme, plan, proposal, action, course of action or course
               of conduct, whether unilateral or otherwise;

   (b)  a reference to the carrying out of an arrangement by a person includes
        a reference to the carrying out of an arrangement by a person together
        with another person or other persons; and

   (c)  a reference to an arrangement or a part of an arrangement being
        entered into or carried out by a person for a particular purpose shall
        be read as including a reference to the arrangement or the part of the
        arrangement being entered into or carried out by the person for 2 or
        more purposes of which that particular purpose is the dominant
        purpose.

"(10) In this section, 'associate' has the same meaning as in section 26AAB.

"(11) For the purpose only of determining whether a person is an associate of
another person within the meaning of this section, the definition of
'relative' in sub-section 6 (1) applies as if a reference in that definition
to the spouse of a person included a reference to another person who, although
not legally married to the person, lives with the person on a bona fide
domestic basis as the husband or wife of the person.".