Taxation Administration Act 1953

SCHEDULE 1 - COLLECTION AND RECOVERY OF INCOME TAX AND OTHER LIABILITIES  

Note: See section 3AA .

Chapter 2 - Collection, recovery and administration of income tax  

PART 2-10 - PAY AS YOU GO (PAYG) INSTALMENTS  

Division 45 - Instalment payments  

Subdivision 45-R - Special rules for consolidated groups  

Operative provisions

SECTION 45-870   HEAD COMPANY ' S LIABILITY TO GIC ON SHORTFALL IN QUARTERLY INSTALMENT  

Liability for the general interest charge

45-870(1)  
Subject to subsections (3) and (4), the *head company of a *consolidated group is liable to pay the *general interest charge under this section for an *instalment quarter in a *consolidation transitional year for the head company if:


(a) the instalment payable by at least one *member of the group for that quarter is worked out:


(i) under paragraph 45-112(1)(b) or (c) ; or

(ii) by using an instalment rate under section 45-205 ; and


(b) the sum of instalments payable by the members of the group for that quarter, reduced by credits claimed by those members under section 45-215 or 45-420 for that quarter, is less than 17/80 of the head company ' s *benchmark tax for that consolidation transitional year.

Note:

17/80 of the head company ' s benchmark tax represents an amount that is 85% of one quarter of that benchmark tax.

Amount on which the charge is payable

45-870(2)  
Subject to subsections (3) and (4), the *general interest charge is payable on the amount worked out in accordance with the following method statement (if the amount is a positive amount). Method statement


Step 1.

Work out the amount that is 1/4 of the *benchmark tax of the *head company for that *consolidation transitional year of that head company.


Step 2.

Work out the sum of instalments that would have been payable by all the *members of the group for that *instalment quarter of that *head company if none of the members had worked out its instalment for that quarter under paragraph 45-112(1)(b) or (c) or by using an instalment rate under section 45-205 .


Step 3.

Work out the sum of instalments payable by all the *members of the group for that *instalment quarter, reduced by credits claimed by the members under section 45-215 or 45-420 for that quarter.


Step 4.

Reduce the lesser of the results of steps 1 and 2 by the result of step 3. The result of this step is the amount on which the *general interest charge is payable if it is a positive amount. No general interest charge is payable if the result of this step is nil or a negative amount.

Amounts of instalments or credits that are taken into account

45-870(3)  
In working out an amount of instalment or credit for a *subsidiary member of the group for the purposes of any of the following provisions:


(a) paragraph (1)(b);


(b) step 2 or 3 of the method statement;

take into account only an amount of instalment or credit covered by that provision that is reasonably attributable to a period in that *consolidation transitional year of the *head company during which it is a subsidiary member of the group.

Members having different instalment quarters

45-870(4)  
In working out an amount of instalment or credit for a *subsidiary member whose *instalment quarters differ from those of the *head company for the purposes of any of the following provisions:


(a) paragraph (1)(a) or (b);


(b) step 2 or 3 of the method statement;

a reference to an instalment quarter in a *consolidation transitional year of the head company in any of those provisions includes a reference to the last instalment quarter of that subsidiary member ending before the end of that instalment quarter of the head company.

45-870(5)  


Subsections (6) and (7) apply if:


(a) the *head company of the *consolidated group is a *monthly payer at a time in an *instalment month (the current month ); and


(b) any of the other *members of the group (the subsidiary quarterly payers ) are *quarterly payers at a time in the *instalment quarter (the current quarter ) in which the current month starts.

45-870(6)  


Apply the following rules:


(a) treat the reference in subsection (1) to an *instalment quarter as being a reference to the current month;


(b) treat the references in this section to that quarter (or that instalment quarter) as being references to the current month.

45-870(7)  


Also apply the following rules, for the purposes of subsections (1) to (5):


(a) treat the subsidiary quarterly payers as *monthly payers for each *instalment month (a notional instalment month ) that starts (disregarding paragraph (6)(a)) in the current quarter;


(b) apply this section separately in relation to each of those notional instalment months;


(c) treat the amount of instalment or credit for a subsidiary quarterly payer in respect of a notional instalment month as being the extent to which the amount of instalment or credit for the subsidiary quarterly payer for the current quarter is attributable to that notional instalment month.




This information is provided by CCH Australia Limited Link opens in new window. View the disclaimer and notice of copyright.