ATO National Tax Equivalent Regime

PART 1: THE NATIONAL TAX EQUIVALENT REGIME

NTER is an administrative arrangement

6. The NTER is an administrative arrangement under which relevant taxation laws will be applied notionally to the NTER entities as if they were subject to those laws.

7. Each NTER entity will be assessed annually as to its income tax equivalent liability and will be required to pay instalments of the (expected) liability to the Treasury or Revenue Office of the state or territory to which the NTER entity belongs. However, NTER entities do not become subject directly to the income tax laws as a result of their participation in the NTER.

[ History: Paragraph 7 amended April 2014 (Version 9), with effect from the instalment month and instalment quarter starting on 1 January 2014, by deleting reference to 'quarterly'. ]

Objective of the NTER

8. The primary objective of the NTER is to promote competitive neutrality, through a uniform application of income tax laws, between the NTER entities and their privately held counterparts.

Relevant taxation laws

9. The relevant taxation laws constitute the technical and administrative rules of the NTER, and consist of these 2 elements:

(i)

the federal income tax laws listed at Attachment 4; and

(ii)

modifications to the federal income tax laws as set out in this Manual.

10. The modifications to the federal income tax laws are considered necessary to take into account the NTER entities' tax history, ownership by state or territory governments and activities which may be regarded as unique to public sector enterprises.

Relationship with state and territory tax equivalent regimes

11. The NTER represents an evolution of the concepts and practices of the state and territory-based tax equivalent regimes (TERs) which have been established for a number of years. An entity commencing in the NTER between 1 July 2001 and 1 July 2002 will have been subject to a TER during the period immediately preceding its commencement in the NTER.

Version history

Prior versions of the ATO National Tax Equivalent Regime, from Version 6, can be requested from atolawsupport@ato.gov.au , if required.