INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART VI - COLLECTION AND RECOVERY OF TAX  

Division 1A - Collection by instalments of tax on companies in respect of years of income before the year of income ending on 30 June 1990  

SECTION 221AG   ESTIMATED INCOME TAX  

221AG(1)   [Written estimate required]  

Subject to subsections (2) and (3), a company that has been served with a notice under subsection 221AF(1) may, not later than the date specified in that notice as the date on which the amount of the instalment of tax specified in that notice is due and payable, or within such further period as the Commissioner allows make an estimate of the amount of income tax, if any, that will be payable by the company in respect of its taxable income of the year of income to which the instalment of tax relates and furnish to the Commissioner a statement in writing showing the amount so estimated (in this section referred to as the ``estimated income tax'' ) and the basis on which the estimate has been made.

221AG(1A)   [Assumption re net capital gain]  

Any estimate made for the purposes of this section of the amount of income tax that will be payable by a company in respect of its taxable income of a year of income shall be based on the assumption that the assessable income of the company of that year of income will not include any net capital gain within the meaning of Part IIIA .

221AG(2)   [Instalment based on notional tax]  

A company is not entitled, in relation to an instalment of tax in respect of its income of a year of income, to make an estimate and furnish to the Commissioner a statement in pursuance of subsection (1) if the amount specified in the notice referred to in that subsection as the amount payable by the company as that instalment of tax was calculated by reference to an amount of notional tax ascertained under subsection 221AD(3) .

221AG(3)   [Only one estimate allowed]  

Where, in relation to an instalment of tax in respect of the income of a company of a year of income, the company has made an estimate and furnished to the Commissioner a statement in pursuance of subsection (1), the company is not entitled to make a further estimate and furnish to the Commissioner a further statement in relation to any other instalment of tax in respect of the income of the company of that year of income.

221AG(4)   [Instalment where statement furnished]  

Where a company duly furnishes to the Commissioner, in relation to an instalment of tax, a statement under subsection (1), the amount payable by the company as that instalment is, subject to subsection (5), an amount (in this section and section 221AH referred to as the ``adjusted instalment of tax'' ) equal to one-quarter of the estimated income tax.

221AG(5)   [Estimate by Commissioner]  

Where, having regard to information in returns of income lodged by the company and any other information in his possession, the Commissioner has reason to believe that the amount of income tax that will be payable by the company in respect of its taxable income of the year of income is different from the estimated income tax:


(a) the Commissioner may estimate the amount that, in his opinion, should have been the amount estimated by the company in pursuance of subsection (1) in respect of that year of income; and


(b) the amount payable by the company as the instalment of tax in relation to which the statement was furnished under subsection (1) is:


(i) an amount equal to one-quarter of the amount of income tax so estimated by the Commissioner; or

(ii) the amount of the instalment of tax as specified in the notice referred to in subsection (1);
whichever is the less.

221AG(5A)   [Multiple instalments]  

Where:


(a) 2 or 3 instalments of tax in respect of the income of a company of a year of income are due and payable on the same day;


(b) the same date is shown on each of the notices served on the company under subsection 221AF(1) in respect of those instalments as being the date of issue of the notice; and


(c) the amount payable by the company as one of those instalments of tax is required to be ascertained under subsection (4) or subparagraph (5)(b)(i);

the amount of the other instalment, or each of those other instalments, of tax payable by the company in respect of its income of the year of income is an amount equal to the amount so ascertained.

221AG(6)   [Additional tax]  

If the amount of income tax payable by the company in respect of its taxable income of the year of income exceeds the estimated income tax and that amount of income tax has become due and payable, then additional tax, by way of penalty, in respect of the period that commenced on the day immediately following the date specified in the notice referred to in subsection (1) as the date on which the amount of the instalment of tax specified in that notice was due and payable and ended on the day on which that amount of income tax became due and payable, is due and payable by the company at the rate of 20% per annum on the amount (in subsection (7A) referred to as the ``prescribed amount'' ) by which:


(a) the amount payable as the instalment of tax as specified in the notice referred to in subsection (1); or


(b) an amount equal to one-quarter of the amount of income tax so payable by the company;

whichever is the less, exceeds:


(c) the adjusted instalment of tax; or


(d) in a case to which subsection (5) applies - the amount ascertained in accordance with paragraph (b) of that subsection;

whichever is the greater.

221AG(7)   [Additional tax where notional tax amount]  

Where:


(a) an amount payable by the company as an instalment of tax in respect of its income of the year of income was calculated under subsection 221AE(1) by reference to an amount of notional tax ascertained under subsection 221AD(2B) ;


(b) the amount of income tax payable by the company in respect of its taxable income of the year of income exceeds the estimated income tax; and


(c) the amount of income tax referred to in paragraph (b) has become due and payable;

then additional tax, by way of penalty, in respect of the period that commenced on the day immediately following the date specified in the notice in respect of that instalment of tax served on the company in accordance with section 221AF as the date on which the amount payable as that instalment of tax was due and payable and ended on the day on which the amount of income tax referred to in paragraph (b) became due and payable, is due and payable by the company at the rate of 20% per annum on the amount by which:


(d) the amount that, but for the operation of subsection 221AD(2B) , would have been payable as that instalment of tax under subsection 221AE(1) ; or


(e) an amount equal to one-quarter of the amount of income tax referred to in paragraph (b);

whichever is the less, exceeds:


(f) the adjusted instalment of tax; or


(g) the amount that was payable by the company as that instalment of tax;

whichever is the greater.

221AG(7A)   [Additional tax where income underestimated]  

Where:


(a) but for the operation of subsection 221AD(2B) or subsections 221AD(2B) and 221AE(1A) , a company would have been liable to pay an instalment of tax, or 2 instalments of tax, in respect of its income of a year of income;


(b) the estimated income tax is:


(i) nil; or

(ii) an amount less than:

(A) $1,000; or

(B) if the Commissioner has made a determination under subsection 221AE(1B) in relation to the year of income, 4 times the amount determined by the Commissioner under that subsection in relation to the year of income; and


(c) additional tax under subsection (6) is due and payable by the company in respect of the year of income;

then, additional tax, by way of penalty, in respect of the instalment of tax or each instalment of tax, as the case may be, in respect of the period:


(d) commencing on:


(i) 16 November in the relevant year of tax; or

(ii) 16 February in the relevant year of tax;
whichever is the earliest day on which, but for the operation of subsection 221AD(2B) or subsections 221AD(2B) and 221AE(1A) , as the case may be, the instalment of tax would have been due and payable by the company if a notice under subsection 221AF(1) had been duly served on the company in relation to the instalment of tax not later than 30 days before that day; and


(e) ending on the day on which the amount of income tax payable by the company in respect of its taxable income of the year of income became due and payable;

is due and payable by the company at the rate of 20% per annum on an amount equal to the prescribed amount.

221AG(7B)   [Amount of additional tax where underestimate]  

Where:


(a) subsection (5A) applies in relation to instalments of tax in respect of the income of a company of a year of income; and


(b) additional tax under subsection (6) is due and payable by the company in respect of the year of income;

additional tax, by way of penalty, equal to:


(c) in a case where subsection (5A) applies in relation to 3 instalments of tax - double the amount of additional tax referred to in paragraph (b) of this subsection; or


(d) in a case where subsection (5A) applies in relation to 2 instalments of tax - the amount of additional tax referred to in paragraph (b) of this subsection;

is due and payable by the company.

221AG(7C)   [Remission of additional tax]  

Where the Commissioner is satisfied that there are special circumstances by reason 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 company under subsection (6), (7), (7A) or (7B).

221AG(8)   [Deduction for credits and franking deficit tax offset]  

A reference in this section to the amount of income tax that is or will be payable by a company in respect of its taxable income of a year of income shall be read as a reference to the amount of the income tax that is or will be so payable after deducting:


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


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

(ii) the International Tax Agreements Act 1953 ; and


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

221AG(9)   [Sec 206 disregarded]  

In determining for the purposes of this section whether an amount of income tax has become due and payable by a company and, if an amount of income tax has become due and payable by a company, the day on which that amount became due and payable, the operation of section 206 shall be disregarded.


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