Bills Digest 129 1996-97
Termination Payments Surcharge (Assessment and Collection) Bill 1997
WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced
and does not canvass subsequent amendments. This Digest does not have any
official legal status. Other sources should be consulted to determine the
subsequent official status of the Bill.
CONTENTS
Termination Payments Surcharge (Assessment and Collection) Bill 1997
Date Introduced: 13 February 1997
House: House of Representatives
Portfolio: Treasury
Commencement: Royal Assent
To provide for the assessment and collection of a 'surcharge' on termination
payments that will be payable by a taxpayer where there income exceeds
$70 000.
The reader is referred to the Digest for the Superannuation Contributions
Surcharge (Assessment and Collection) Bill 1997.
For termination payments made before 20 August 2001, the surcharge will
apply to the financial year commencing on 1 July 1996. Effectively the
surcharge will apply to termination payments made after 7.30 pm on 20
August 1996 (the time of the Budget announcement)(clause 7).
Transitional arrangements will apply to termination payments made before
20 August 2001, so that only that part of the termination payment relating
to service after the announcement of the surcharge will be liable. For
termination payments made on or after 20 August 2001, the surcharge will
apply to the entire termination payment, including service prior to that
date. It may be argued that this measure as it applies to entitlements
accrued before the announcement is retrospective (clause 9).
The surcharge threshold will be $70 000 for 1996-97 and this amount
will be indexed on the movement of the Australian Statistician's estimate
of full-time adult average weekly ordinary time earnings, rather than
the Consumer Price Index. The indexation factor will be calculated on
such movements from March to March each year (clause 10).
Who is liable to pay the surcharge is dealt with in clause 8.
The surcharge is payable on any termination payments made to or for a
taxpayer. The taxpayer is liable for the surcharge. The surcharge is only
payable if a taxpayer's assessable income and superannuation contributions
for a financial year is greater than the surcharge threshold for that
year. In addition, the surcharge will not be payable by residents, companies
and trustees that reside in a Territory for the purposes of Division 1A
of Part III of the Income Tax Assessment Act 1936(ITAA)
(such Territories are the external Territories and, depending on certain
provisions of the ITAA, are Norfolk Island, the Cocos (Keeling) Islands
and Christmas Island).
The Commissioner of Taxation (the Commissioner) is to assess any amount
of surcharge that is payable in respect of a financial year and the assessment
is to include the total amount of surcharge payable. The surcharge will
generally be payable within 1 months of the assessment being made. Notice
of an assessment is to be given to the taxpayer (clause 11).
If an assessment of surcharge is amended, the assessment of the amount
of surcharge is to be amended to reflect the new assessment of income
(clause 12). If an assessment is amended or a new assessment is
issued and this results in a higher surcharge liability, the person will
also be liable to interest on the difference between the originally assessed
surcharge and the newly assessed surcharge. The rate of interest will
be based on the rate payable under the ITAA (clause 13).
Clause 14 will allow the Commissioner to use a person's TFN that
has been supplied under a law relating to superannuation or taxation for
the administration of the Bill.
The remainder of the Bill deals with administrative, rather than policy,
matters. More important matters relate to:
- the recovery of unpaid surcharge, or advance instalments, and the
imposition of a penalty charge on bodies that fail to comply with the
remittance requirements (clause 16);
- the recovery of unpaid surcharge, which will be considered to be a
debt to the Commonwealth and so recoverable in a civil action (clause
17);
- the review of decisions made by the Commissioner, which, in accordance
with normal legislative provisions, provide for an internal review of
the decision and review by the Administrative Appeals Tribunal (clause
20) (the review of such decisions may also be subject to review
by the Federal and High Courts); and
- the administration of the scheme will be vested in the Commissioner
of Taxation and an annual report on the operation of the proposed Act
is to be delivered (clauses 21 and 22).
Chris Field
Ian Ireland
3 April 1997
Bills Digest Service
Information and Research Services
This Digest does not have any official legal status. Other sources should
be consulted to determine whether the Bill has been enacted and, if so,
whether the subsequent Act reflects further amendments.
IRS staff are available to discuss the paper's contents with Senators
and Members and their staff but not with members of the public.
ISSN 1323-9031
© Commonwealth of Australia 1996
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Published by the Department of the Parliamentary Library, 1997.
This page was prepared by the Parliamentary Library, Commonwealth of
Australia
Last updated: 10 April 1997
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