INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART VI - COLLECTION AND RECOVERY OF TAX  

Division 1B - Collection of tax on companies and trustees of certain funds  

SECTION 221AZE   ADDITIONAL TAX IF ESTIMATE INCORRECT  

221AZE(1)   [Operation of section]  

If:

(a) a relevant entity gives a notice under paragraph 221AQ(1)(a) in respect of a year of income (in this section called the ``relevant year of income'' ); and

(b) the amount (in this paragraph called the ``relevant amount'' ) that is the lesser of whichever of the following amounts are applicable to the entity:

(i) in the case of:

(A) a relevant entity other than a company; or

(B) a relevant entity being a company whose assessable income of the relevant year of income did not include a net capital gain within the meaning of Part IIIA ;

the amount specified by the entity in a return in accordance with section 221AZD to be the income tax that is payable in respect of its taxable income of the relevant year of income;

(ii) in the case of a relevant entity being a company whose assessable income of the relevant year of income included a net capital gain within the meaning of Part IIIA - the amount calculated by the Commissioner under subsection (2) in relation to the entity in respect of the relevant year of income;

(iii) in the case of any relevant entity - the entity's notional tax in respect of the relevant year of income;

exceeds either of the following amounts:

(iv) the amount estimated by the entity under paragraph 221AQ(1)(a) to be the income tax that would be payable by the entity in respect of its taxable income of the relevant year of income;

(v) if the entity made a revised estimate under subsection 221AR(1) of the amount referred to in subparagraph (iv) - the amount of the revised estimate;

by more than 10% of the relevant amount; and

(c) income tax has become due and payable by the entity in respect of its taxable income of the relevant year of income;

the following provisions of this section have effect.

221AZE(2)   [Amount to be calculated by Commissioner]  

For the purposes of subparagraph (1)(b)(ii), the Commissioner must calculate:

(a) in the case of a company other than a life assurance company or a registered organisation - the amount of income tax (if any) that would be payable in respect of the amount that would have been its taxable income of the relevant year of income if the net capital gain referred to in that subparagraph had not been included; or

(b) in the case of a life assurance company - the sum of:

(i) the amount of income tax (if any) that is payable in respect of the CS/RA component of its taxable income of the relevant year of income; and

(ii) in relation to each of the NCS component, the general fund component (if any) and the AD/RLA component of its taxable income of the relevant year of income:

(A) if the part of its assessable income of that year of income to which that component relates included a net capital gain within the meaning of Part IIIA - the amount of income tax (if any) that would be payable in respect of the amount that would have been that component if that net capital gain had not been included; or

(B) otherwise - the amount of income tax (if any) that is payable in respect of that component; and

(c) in the case of a registered organisation - the sum of:

(i) the amount of income tax (if any) that is payable in respect of the CS/RA component of its taxable income of the relevant year of income; and

(ii) in relation to each of the NCS component, the RSA combined component (if any)and the EIB component of its taxable income of the relevant year of income:

(A) if the part of its assessable income of that year of income to which that component relates included a net capital gain within the meaning of Part IIIA - the amount of income tax (if any) that would be payable in respect of the amount that would have been that component if that net capital gain had not been included; or

(B) otherwise - the amount of income tax (if any) that is payable in respect of that component.

221AZE(3)   [Period additional tax payable]  

Additional tax, by way of penalty, in respect of each day (in this subsection called the ``day concerned'' ) during the period that:

(a) commenced on the day by which the entity was required to make an initial payment of tax in respect of the relevant year of income or the earliest day on which the entity made an estimate or revised estimate that resulted in an excess referred to in paragraph (1)(b), whichever is the later; and

(b) ended on the day on which the entity makes the payment that it is required by section 221AZD to make in respect of the relevant year of income;

is due and payable by the entity, at the rate of 16% per annum, on the amount by which 85% of the relevant amount exceeds the amount, or the total of the amounts, paid by the entity on or before the day concerned in respect of that initial payment of tax.

221AZE(4)   [Where entity received refund]  

Where the entity received a refund in respect of an amount paid as an initial payment of tax in respect of its taxable income of the relevant year of income under this Division:

(a) subject to paragraph (b), the amount, or the total of the amounts, paid by the entity in respect of that initial payment of tax is to be taken, for the purposes of this section, to have been reduced, on and after the date of receipt of the refund, by the amount of the refund; or

(b) if the entity received the refund because a determination under section 221AV or 221AW reduced the amount of the initial payment that the entity was liable to make in respect of its taxable income of the relevant year of income - paragraph (a) does not apply in respect of the refund and subsection (3) has effect as if the entity had not received the refund.

221AZE(5)   [Remission of additional tax]  

Where the Commissioner is satisfied that there are special circumstances because of which it would be fair and reasonable to do so, the Commissioner may remit the whole or any part of any additional tax payable by the entity under subsection (3).

221AZE(6)   [Income tax payable]  

For the purposes of this section, the income tax that is or would be payable by the entity in respect of its taxable income of the relevant year of income is the income tax that is or would be so payable after deducting:

(a) any credits to which the entity is or will be entitled under:

(i) subsection 98A(2) , Division 18 of Part III or Division 1AA or 3A of this Part; or

(ii) the International Tax Agreements Act 1953 ; and

(b) any offset to which the entity is or will be entitled under section 160AQK .