Taxation Laws Amendment Bill (No. 4) 1994

Supplementary Explanatory Memorandum

Amendments and Requests for Amendment to be Moved on Behalf of the Government

(Circulated by authority of the Treasurer, the Hon Ralph Willis, MP)

General Outline and Financial Impact

Imputation - Early payments of company tax for 1993-94

Amends the provisions of the Bill relating to the transitional arrangement resulting from the reduction in the company tax rate to ensure that, if a company pays a franked dividend during its 1993-94 franking year, and if the imputation credit attached to that dividend arises from an early payment of company tax for that year, then the imputation credit cannot exceed the amount of that tax.

Financial impact: The amendment will preserve the integrity of the original provisions which were expected to prevent a potential loss to revenue of approximately $1 million.

Employee share acquisition schemes

Amends the Bill to alter the value of the section 39FG concession (the deferral concession) and the conditions attached to that concession to provide easier access to the concession for companies that offer employer company shares or rights. Amends the Bill to remove the concessional deduction which was to be allowed under the proposed subsection 76(1) of the Income Tax Assessment Act 1936 in respect of the section 39FG concession (the deferral concession). Other minor changes relating to the valuation of shares or rights quoted on a stock market will also be made to the Bill.

Financial impact: The nature of the amendments are such that a reliable estimate cannot be made.

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