House of Representatives

Income Tax and Social Services Contribution 1951

Income Tax and Social Services Contribution Assessment Act 1951

Explanatory Note

(Amendment to be proposed by Sir Arthur Fadden (Treasurer) to the motion moved by him in the Committee of Ways and Means on 11th October, 1951.)

Ed. Note

The original document included both the explanatory notes and the text of the related legislation. In the electronic copy, only the explanatory notes and headings of the related legislation have been retained.


Paragraph 10 of the Resolution before the Committee proposes the imposition of an additional rate of tax of 2s. in the Pd1 upon the taxable income of public companies.

Certain exemptions from this special levy are proposed and have been explained in the explanatory memorandum circulated to Honourable Members. The amendment set out above will exempt companies resident outside Australia from the special levy of 2s. in the Pd1 in respect of dividends included in the taxable income. The omission to provide for this exemption in the Resolution was due to inadvertence.

The dividends which the amendment proposes to exempt from the special levy will generally be paid out of profits subjected to that levy, and it would be inappropriate to impose the levy a second time when dividends are paid. Moreover, the severity of the total burden of tax on the profits and on the dividends paid out of those profits would be a serious deterrent to the investment of overseas capital by means of subsidiary companies operating in this country.

A corresponding freedom from the special levy in the case of dividends paid to companies resident in Australia is achieved through the allowance of the tax rebate already provided by the Income Tax law. The amendment now proposed will establish uniformity in this regard as between resident and non-resident companies.