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CONTENTS
Passage History
Purpose
Background
Main Provisions
Contact Officer and Copyright Details
New Business Tax System (Former Subsidiary Tax
Imposition) Bill 1999
Date Introduced: 21 October 1999
House: House of Representatives
Portfolio: Treasury
Commencement: Royal Assent
To impose
formally a tax on the former owners of certain subsidiary companies
disposed of as part of a tax minimisation scheme.
This Bill is necessary to satisfy the
requirements of section 55 of the Constitution which states, in
part:
Laws imposing taxation shall deal only with the
imposition of taxation, and any provision therein dealing with any
other matter shall be of no effect.
To meet this requirement, it is necessary to
have a separate Bill imposing formally a tax, while the assessment
and administration of the tax is dealt with in another Bill.
For further information on the tax on former
subsidiaries imposed by this Bill refer to the Digest for the New
Business Tax System (Integrity and Other Measures) Bill 1999 under
Integrity - Disposal of Leases and Leased Plant.
Clause 3 will impose a tax
relating to former subsidiaries in a company group liable to pay
tax under proposed section 45-25 of the Income Tax Assessment
Act 1997, which is introduced by the New Business Tax System
(Integrity and Other Measures) Bill 1999. The proposed section
provides that members of the same company group as the subsidiary
prior to its disposal will be jointly and severably liable to pay
the tax owed by a former subsidiary where the disposal of certain
leases through the subsidiary, or the disposal of the subsidiary,
has been used for tax minimisation
The amount of tax payable is calculated by
reference to the New Business Tax System (Integrity and Other
Measures) Bill 1999, and will be the lesser of the amount payable
by the subsidiary under that Bill and the remaining amount payable
by the group of companies involved (clause 4).
Chris Field
16 November 1999
Bills Digest Service
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ISSN 1328-8091
© Commonwealth of Australia 1999
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Published by the Department of the Parliamentary Library,
1999.
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