Bills Digest No. 81  1999-2000 New Business Tax System (Former Subsidiary Tax Imposition) Bill 1999

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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.


Passage History
Main Provisions
Contact Officer and Copyright Details

Passage History

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.

Main Provisions

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).

Contact Officer and Copyright Details

Chris Field
16 November 1999
Bills Digest Service
Information and Research Services

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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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