Supplementary Explanatory Memorandum
(Circulated by the authority of the Acting Treasurer, the Hon J.S. Dawkins, M.P.)GENERAL OUTLINE
The amendments will amend the operation of clause 36 of the Bill to give effect to an announcement by the Acting Treasurer on 22 November 1989.
Clause 36 of the Bill inserts a new Division - Division 1B - in Part VI of the Income Tax Assessment Act 1936 introducing a new system for the collection of tax from companies, superannuation funds and other retirement benefit funds (called "relevant entities").
Amendments (1)-(7) will apply in respect of a relevant entity that has a liability to make an initial payment of tax in respect of income of a year of income, being 85 per cent of notional tax or (if a lesser amount) the estimated total liability, and will change the date by which the entity will be required to make the initial payment from 15 July to 28 July following the end of the relevant year (or the equivalent date for entities with a substituted accounting period).
The second amendment - amendment (8) - is a transitional measure applicable for income tax payable in respect of income of the year of income ending on 30 June 1990, or a substituted accounting period in lieu of that year.
As a consequence of the amendment, a relevant entity which has a notional tax of more than $1,000 but less than $400,000, or which has a notional tax of $400,000 or more but estimates its tax to be in the range $1,000 to $400,000, will be able to elect to make a single final payment on 15 December (or the equivalent date for entities with a substituted accounting period). In the absence of an election, an entity in this situation must make an initial payment of 85 per cent of its notional tax, or estimated liability, on 28 July and pay the balance on 15 March (or the equivalent dates).