Taxation Laws Amendment Act (No. 3) 1999 (11 of 1999)

Schedule 1   Running balance accounts, general interest charge and related matters

Part 1   Amendments

Taxation Administration Act 1953

351   Before Part III

Insert:

Part IIB - Running balance accounts, application of payments and credits, and related matters

Division 1 - Preliminary

8AAZA Definitions

In this Part, unless the contrary intention appears:

company includes any body or association (whether or not it is incorporated), but does not include a partnership.

deficit , in relation to an RBA, means a balance in favour of the Commissioner, based on tax debts that remain unpaid after they are due for payment.

entity means any of the following:

(a) a company;

(b) a partnership;

(c) a person in a particular capacity of trustee;

(d) a body politic;

(e) a corporation sole;

(f) any other person.

FS assessment debt has the same meaning as in theStudent Assistance Act 1973.

HEC assessment debt has the same meaning as in Chapter 5A of theHigher Education Funding Act 1988.

non-RBA tax debt means a tax debt other than an RBA deficit debt.

primary tax debt means any amount due to the Commonwealth directly under a taxation law, including any such amount that is not yet payable.

RBA means a running balance account established under section 8AAZC.

RBA class means a class of tax debts covered by paragraph 8AAZC(1)(a), (b), (c) or (d).

RBA deficit means a deficit on an RBA.

Note: See also the definition of deficit .

RBA deficit debt means an RBA deficit that is a debt under section 8AAZH.

RBA statement means a statement prepared by the Commissioner under section 8AAZG.

secondary tax debt means an amount that is not a primary tax debt, but is due to the Commonwealth in connection with a primary tax debt.

Note: An example of a secondary tax debt is an amount due to the Commonwealth under an order of a court made in a proceeding for recovery of a primary tax debt.

special priority credit means a credit under section 220AZ, section 221H, section 221YE, subsection 221YHF(1) or section 221YHZK of theIncome Tax Assessment Act 1936.

tax debt means a primary tax debt or a secondary tax debt.

tax debtor means:

(a) in relation to a tax debt - the person or persons who are liable for the tax debt; and

(b) in relation to an RBA - the person or persons who are liable for the tax debts that are allocated to the RBA.

8AAZB Trustee to be treated as separate entity for each capacity

For the purposes of this Part, a person who is a trustee in more than one capacity is to be treated as a separate entity in relation to each of those capacities.

Division 2 - Running balance accounts (or RBAs)

8AAZC Establishment of RBAs

(1) The Commissioner may establish a system of accounts for each of the following 4 classes of primary tax debts:

(a) primary tax debts due under theSales Tax Assessment Act 1992;

(b) primary tax debts due:

(i) under Division 1AA of Part VI of theIncome Tax Assessment Act 1936; or

(ii) under Division 1AAA of that Part in relation to deductions made under Division 1AA of that Part;

(c) primary tax debts due:

(i) under Division 2 of Part VI of theIncome Tax Assessment Act 1936; or

(ii) under Division 1AAA of that Part in relation to deductions made under Division 2 of that Part;

(d) primary tax debts due:

(i) under Division 3A of Part VI of theIncome Tax Assessment Act 1936; or

(ii) under Division 1AAA of that Part in relation to deductions made under Division 3A of that Part.

(2) Each account is to be known as a Running Balance Account (or RBA).

(3) An RBA may be established for any entity.

Note: The sameperson might be part of differententities. For example, a person might have a trustee capacity and also be a partner in a partnership. The person would then be a tax debtor in relation to each of the separate RBAs established for the trustee capacity and the partnership.

(4) Within an RBA class, RBAs for entities may be established on any basis that the Commissioner determines.

(5) Without limiting subsection (4), separate RBAs may be established for:

(a) different businesses or undertakings conducted by the same entity; or

(b) different parts of the same business or undertaking; or

(c) different periods.

8AAZD Allocation of tax debts to RBAs

(1) Each primary tax debt in an RBA class must be allocated as follows:

(a) if there is only one RBA for that class for the tax debtor - the tax debt must be allocated to that RBA;

(b) if there are several RBAs for that class for the tax debtor - the tax debt must be allocated to one of those RBAs, or between 2 or more of those RBAs, in the manner determined by the Commissioner.

Note: Under section 8AAZF, any general interest charge on an RBA deficit is also allocated to an RBA.

(2) In this section:

primary tax debt does not include:

(a) general interest charge; or

(b) an RBA deficit debt; or

(c) a penalty under subsection 220AAW(2) of theIncome Tax Assessment Act 1936.

8AAZE Allocation of payments and credits to RBAs

If a payment or credit is applied under section 8AAZL against:

(a) a tax debt that has been allocated to one or more RBAs; or

(b) general interest charge on a tax debt, where the tax debt has been allocated to one or more RBAs; or

(c) a judgment debt in respect of:

(i) a tax debt that has been allocated to one or more RBAs; or

(ii) general interest charge on a tax debt, where the tax debt has been allocated to one or more RBAs;

then the amount so applied must also be allocated as follows:

(d) if the tax debt was allocated to one RBA - the amount so applied must be allocated to that RBA;

(e) if the tax debt was allocated between 2 or more RBAs - the amount so applied must be allocated between those RBAs in the proportions in which the tax debt was allocated.

8AAZF General interest charge on RBA deficit

(1) If there is a deficit on an RBA at the end of a day, then general interest charge is payable by the tax debtor on that deficit for that day.

(2) The general interest charge for each day must be allocated to the RBA.

8AAZG RBA statements

The Commissioner may at any time prepare a statement for an RBA, containing such particulars as the Commissioner determines.

8AAZH Recovery of RBA deficit

(1) An RBA deficit:

(a) is a debt due to the Commonwealth by the tax debtor; and

(b) is payable to the Commissioner; and

(c) may be recovered in a court of competent jurisdiction by the Commissioner, or by a Deputy Commissioner, suing in his or her official name.

(2) If there are several tax debtors, their liability for the debt is of the same kind as their liability for the tax debts that were allocated to the RBA.

Example: If the tax debtors are jointly and severally liable for the tax debts that were allocated to the RBA, they will also be jointly and severally liable for the deficit on the RBA.

8AAZI RBA statement to be evidence

(1) The production of an RBA statement:

(a) is prima facie evidence that the RBA was duly kept; and

(b) is prima facie evidence that the amounts and particulars in the statement are correct.

(2) In this section:

RBA statement includes a document that purports to be a copy of an RBA statement and is signed by the Commissioner or a delegate of the Commissioner or by a Second Commissioner or Deputy Commissioner.

8AAZJ Evidentiary certificate about RBA transactions etc.

(1) In proceedings for recovery of an RBA deficit debt, a Commissioner's certificate stating any of the following matters in respect of a specified RBA is prima facie evidence of those matters:

(a) that no tax debts (other than general interest charge on the RBA deficit) were allocated to the RBA after the balance date shown on a specified RBA statement for the RBA;

(b) that general interest charge was allocated to the RBA, as specified in the certificate;

(c) that payments and credits were allocated to the RBA, as specified in the certificate;

(d) that a specified amount was the RBA deficit on the date of the certificate.

(2) In this section:

Commissioner's certificate means a certificate signed by the Commissioner or a delegate of the Commissioner, or by a Second Commissioner or Deputy Commissioner.

8AAZK Effect of judgment in proceedings to recover RBA deficit debt

If:

(a) the Commissioner obtains judgment against a tax debtor in a proceeding to recover an RBA deficit debt; and

(b) an amount (the recovered amount ) is paid or applied in satisfaction of the judgment debt;

then the Commissioner must apply the recovered amount in reduction of the liability of the tax debtor for:

(c) tax debts that were allocated to the RBA; and

(d) general interest charge on tax debts that were allocated to the RBA.

Example: If the Commissioner obtains judgment for $1,000 and $600 is paid in satisfaction of the judgment debt, then the Commissioner must apply a total of $600 in reducing the debts referred to in paragraphs (c) and (d).

Division 3 - Application of payments and credits against tax debts

8AAZL Application of payments and credits against tax debts

(1) Any payment received by the Commissioner in respect of a tax debt or tax debts of a tax debtor must be applied against one or more non-RBA tax debts of that tax debtor, in the manner determined by the Commissioner.

Note: If a payment is applied against a tax debt, it might also be allocated to an RBA under section 8AAZE.

(2) If a tax debtor is entitled to a credit under a taxation law, the Commissioner may apply the credit in reduction of one or more non-RBA tax debts of that tax debtor, in the manner determined by the Commissioner. The Commissioner must refund any amount that is not so applied.

Note: If a credit is applied against a tax debt, it might also be allocated to an RBA under section 8AAZE.

(3) If the credit is a special priority credit, then it must be applied:

(a) firstly against any HEC assessment debt of the tax debtor; and

(b) then against any FS assessment debt of the tax debtor;

before it is applied against other non-RBA tax debts of the tax debtor.

(4) In applying this section, the Commissioner is not required to take account of any instructions of any person in respect of the payment or credit.

Division 4 - Miscellaneous provisions about tax debts

8AAZM When payments are treated as received

For the purposes of taxation laws, a payment in respect of a tax debt is taken not to have been made until it is received by:

(a) the Commissioner; or

(b) a person acting on behalf of the Commissioner.

8AAZN Overpayments made by the Commissioner under taxation laws

(1) An administrative overpayment (the overpaid amount ):

(a) is a debt due to the Commonwealth by the person to whom the overpayment was made (the recipient ); and

(b) is payable to the Commissioner; and

(c) may be recovered in a court of competent jurisdiction by the Commissioner, or by a Deputy Commissioner, suing in his or her official name.

(2) If:

(a) the Commissioner has given a notice to the recipient in respect of the overpaid amount, specifying a due date for payment that is at least 30 days after the notice is given; and

(b) any of the overpaid amount remains unpaid at the end of that due date;

then the recipient is liable to pay the general interest charge on the unpaid amount for each day in the period that:

(c) started at the beginning of that due date; and

(d) finishes at the end of the last day on which, at the end of the day, any of the following remains unpaid:

(i) the overpaid amount;

(ii) general interest charge on any of the overpaid amount.

(3) In this section:

administrative overpayment means an amount that the Commissioner has paid to a person by mistake, being an amount to which the person is not entitled.