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This Digest was prepared for debate. It reflects the legislation as
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CONTENTS
Superannuation Contributions and Termination Payments
Taxes Legislation Amendment Bill 1997
Date Introduced: 2 October 1997
House: House of Representatives
Portfolio: Treasury
Commencement: Royal Assent for the Act and 5 Jun
1997 for schedules 3,5, 9 and items 1 and 2 and 4 to 45 of Schedule
4
To amend various Acts in relation to superannuation
contributions taxes and termination payments taxes.
The reader is referred to the Digest for the Superannuation
Contributions Tax (Members of Constitutionally Protected
Superannuation Funds) Assessment and Collection Bill 1997.
This Bill makes a number of consequential amendments to nine
Acts which are found in the following Schedules:
- Schedule 1 - Amendments of the Income Tax Assessment Act
1936
- Schedule 2 - Amendments of the Income Tax Assessment Act
1997
- Schedule 3 - Amendments of the Superannuation Contributions
Tax (Application to the Commonwealth) Act 1997
- Schedule 4 - Amendments of the Superannuation Contributions
Tax (Assessment and Collection) Act 1997
- Schedule 5 - Amendments of the Superannuation Contributions
Tax (Consequential Amendments) Act 1997
- Schedule 6- Amendments of the Superannuation Industry
(Supervision) Act 1993
- Schedule 7 - Amendments of the Superannuation (Resolution
of Complaints) Act 1993
- Schedule 8 - Amendments of the Taxation (Interest on
Overpayments and Early Payments) Act 1983
- Schedule 9 - Amendments of the Termination Payments Tax
(Assessment and Collection) Act 1997
The amendments to these Acts are required as a consequence of
the introduction of the Superannuation Contributions Tax (Members
of Constitutionally Protected Funds) Assessment and Collection Bill
1997 and the Superannuation Contributions Tax (Members of
Constitutionally Protected Funds) Imposition Bill 1997
.
Schedule 1 - Amendments of the Income Tax Assessment Act
1936
Item 1 amends the definition of 'eligible
termination payment' which includes any payments received
from a complying superannuation fund.The definition is being
amended to ensure that an amount received from the commutation of a
pension from a constitutionally protected superannuation fund
solely to pay a superannuation contributions surcharge is not
included in assessable income.
Item 3 redrafts subsection 202DJ(1) of the 1936
Act to ensure that, where a person has quoted his or her TFN to a
superannuation provider for the purpose of calculating the tax to
be deducted from an Eligible Termination Payment (ETP), that the
TFN will be taken to have also been quoted for the purposes of the
Superannuation Contributions Tax (Members of Constitutionally
Protected Superannuation Funds) Assessment and Collection Act
1997.
Item 4 inserts in subsection 202DJ(2) the
definition of a 'constitutionally protected superannuation fund'
which has the same meaning as the same term in Part IX of the 1936
Act.
Item 5 amends paragraph 214A(2)(f) to include a
reference to section 18 of the Superannuation Contributions Tax
(Members of Constitutionally Protected Superannuation Funds)
Assessment and Collection Act 1997 so that the rate of
interest calculated for the surcharge for protected funds refers to
section 214A of the 1936 Act.
Schedule 2 - Amendments of the Income Tax Assessment Act
1997
Items 1 & 2 ensure that the payment of the
superannuation contributions surcharge is not an allowable
deduction under the Income Tax Assessment Act 1997 (the
1997 Act) in relation to the following Acts:
- Superannuation Contributions Tax (Assessment and
Collection) Act 1997;
- Superannuation Contributions Tax (Members of
Constitutionally Protected Superannuation Funds) Assessment and
Collection Act 1997;
- Termination Payments Tax (Assessment and Collection) Act
1997.
Schedule 3 - Amendments of the Superannuation Contributions
Tax (Application to the Commonwealth) Act 1997
Items 1 & 2 make a technical amendment to
remove any doubt that the Superannuation Contributions Tax
(Assessment and Collection) Act 1997 applies to superannuation
funds administered by the Commonwealth.
Schedule 4 - Amendments of the Superannuation Contributions
Tax (Assessment and Collection) Act 1997
Item 1 clarifies the Superannuation
Contributions Tax (Assessment and Collection) Act 1997 (the
1997 Act) to ensure that for an unfunded defined benefits scheme,
the surcharge is not payable until the benefit becomes payable.
Item 3 amends section 7 to provide that no
surcharge is payable under the 1997 Act where the surcharge is
payable under the Superannuation Contributions Tax (Members of
Constitutionally Protected Superannuation Funds) Assessment and
Collection Act 1997 and ensures that there is no possibility
of double taxation in the unlikely circumstance when both
assessment and collection Acts could apply to a constitutionally
protected fund.
Item 4 amends subsection 8(1) to clarify the
basis of calculation of surchargeable contributions for
accumulation schemes and for defined benefits schemes. Accumulation
schemes are based on the amounts actually paid, defined benefits
schemes are based on annual salaries multiplied by the notional
surchargeable contributions factor.
Items 5 and 6 amend subsection 8(2) which
determines the amount of surchargeable contributions for a member
of an accumulation fund, so that any allocated surplus amount for a
member is included in the member's surchargeable contributions.The
definition of 'allocated surplus amount' is inserted in the
definitions under section 43. (Item 40) Subsection
8(3) determines the amount of surchargeable contributions for a
defined benefits fund based on a 'notional surchargeable
contributions factor' defined in section 43.Item
45 amends the definition for unfunded defined benefits
schemes that do not actually receive any contribution in a
financial year, because, for example, the scheme is on a
contributions holiday.
Items 5,6,7, and 9 make amendment to ensure
that defined benefit superannuation fund providers, as their
accumulation benefit superannuation counterparts, are required to
report 'surchargeable contributions' for a member.Item
41 makes appropriate amendment to the definition of
'contributed amounts'.
Item 25 amends subsections 17(2) and 17(3)
dealing with credits or refunds of advance instalment and ensures
that the advance instalment is first used to reduce any surcharge
liabilities the provider may have under the 1997 Act before an
amount is refunded to the provider.
Items 26 to 28 deal with amendment of
assessments and allows the Commissioner more scope to make
amendments in certain situations.
Item 29 deals with assessments of additional
surcharge and makes an amendment to ensure that the amount of any
reduction in the surcharge is first used to reduce any surcharge
liabilities the holder may have under the 1997 Act before an amount
is refunded to the provider.
Item 30 deals with late payment under section
25 of the 1997 Act and makes amendmentsfor consistency with other
taxing provisions.The late payment penalty interest will be based
on the rate provided for by section 214A of the Income Tax
Assessment Act 1936, and is based on the 13 week Treasury Bond
rate accruing on a daily basis.The amendment will also provide for
judgment to be made in respect of the debt and the Taxation
Commissioner to sue for the recovery of any unpaid amounts.
Item 33 inserts new proposed section
34A to ensure that the Act does not apply to a person who
is a judge of a Territory at the commencement of the
Superannuation Contributions Tax (Assessment and Collection)
Act 1997.
Item 34amends section 35 so that a
superannuation provider must give the Commissioner a statement
setting out such information required by the regulations, and
provides for a penalty if no information is given.Also, a
new proposed section 35A is inserted which
provides for the Taxation Commissioner to serve a contravention
notice on a provider who has contravened the provisions dealing
with the provision of information.
Item 37 inserts new proposed section
40A which deals with the Commissioner's power to collect
funds held for or on behalf of a holder of surchargeable
contributions to meet a surchargeable liability.
Item 38 substitute new proposed section
42 to provide that the general regulation making power
extends to the manner in which statements are to be provided to the
Taxation Commissioner and allows regulations to prescribe a penalty
for offences against the regulations.
Items 39 to 44 make various amendments to the
definitions.
Schedule 5 - Amendments to the Superannuation Contributions
Tax (Consequential Amendments) Act 1997
Items 1 to 18 simply correct cross-references
in the Act that refer to provisions in the Retirement Savings
Accounts Act 1997.The latter Act was renumbered in the
Parliament and these amendment simply reflect that renumbering.
Schedule 6 - Amendments of the Superannuation Industry
(Supervision) Act 1993
Item 1 is a technical amendment which is made
to this Act to insert an appropriate reference to the
Superannuation Funds (Members of Constitutionally Protected
Superannuation Funds)Assessment and Collection Act 1997 in the
definition of 'Surcharge Acts' in section 299W.
Schedule 7 - Amendments of the Superannuation (Resolution
of Complaints) Act 1993
Items 1 and 3 are amendments of a technical
nature to insert appropriate references to the Superannuation
Funds (Members of Constitutionally Protected Superannuation
Funds)Assessment and Collection Act 1997 in subsection 3(2)
and section 15CA.
Item 2 amends subsection 15CA(1) to remove a
reference to 'contributed amounts' which is no longer
appropriate.
Schedule 8 - Amendments of the Taxation (Interest on
Overpayments and Early Payments) Act 1983
Item 1 inserts new Part IIE into the Act to
enable interest to be paid on overpayments resulting from
amendments to surcharge assessments made under the
Superannuation Funds (Members of Constitutionally Protected
Superannuation Funds)Assessment and Collection Act 1997.The
amendments require the Taxation Commissioner to pay interest where
a person who has paid their surcharge and then the surcharge
liability has been reduced.
Schedule 9 - Amendments of the Termination Payments Tax
(Assessment and Collection) Act 1997
Item 1 deals with amendments of surcharge
assessments and redrafts subsection 12(4) to ensure that :
- an amount can be credited to the taxpayer even where the total
amount previously assessed to be paid has not been paid; and
- any excess amount is to be applied to reduce any surcharge
liability the taxpayer may have under the Act before an amount is
refunded to the taxpayer.
Item 2 deals with late payment penalty under
section 16 of the Act and is amended to make it consistent with
other taxing provisions.The late payment penalty interest will be
based on the rate provided for by section 214A of the Income
Tax Assessment Act 1936, and is based on the 13 week Treasury
Bond rate accruing on a daily basis.The amendment will also provide
for judgment to be made in respect of the debt and for the Taxation
Commissioner to sue for the recovery of any unpaid amounts.
Item 6 inserts new section 28A which deals with
the Commissioner's power to collect funds held for or on behalf of
a holder of surchargeable contributions to meet a surchargeable
liability.
Item 7 provides a technical amendment to the
definition of 'termination payments surcharge or surcharge'.
John Harrison
24 October 1997
Bills Digest Service
Information and Research Services
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ISSN 1328-8091
© Commonwealth of Australia 1997
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Published by the Department of the Parliamentary Library,
1997.
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Last updated: 27 October 1997
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