Income tax: is a refund notice an 'assessment' for the purposes of the Income Tax Assessment Act 1936 when a taxpayer has a taxable income above the tax-free threshold but is entitled to franking rebates in excess of the amount of tax otherwise payable and a refund notice issues to refund existing PAYE credits to the taxpayer?
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FOI status:may be releasedFOI number: I 1215852
|This Determination, to the extent that it is capable of being a 'public ruling' in terms of Part IVAAA of the Taxation Administration Act 1953 , is a public ruling for the purposes of that Part. Taxation Ruling TR 92/1 explains when a Determination is a public ruling and how it is binding on the Commissioner. Unless otherwise stated, this Determination applies to years commencing both before and after its date of issue. However, this Determination does not apply to taxpayers to the extent that it conflicts with the terms of a settlement of a dispute agreed to before the date of issue of the Determination (see paragraphs 21 and 22 of Taxation Ruling TR 92/20).|
2. No tax is payable under the refund notice because the taxpayer's rebate entitlements (under section 160AQU) exceed the tax which would otherwise be payable by the taxpayer on the taxable income. Such a refund notice does not impose any tax liability (Case W69 89 ATC 618 at 626; AAT Case 5237 (1988-89) 20 ATR 3806 at 3814). It is not an assessment for the purposes of the Act.
4. If, at a later date, the Commissioner issues an assessment to increase the taxpayer's taxable income, that assessment would be an original assessment and not an amended assessment. It would not be subject to the time limitations contained in section 170.
A taxpayer's return of income for the year ended 30 June 1992 discloses the following:
Salary & wages
(PAYE deductions of $150.00)
Dividends: franked amount
Commissioner of Taxation
NO BXH 0025
Batagol v FC of T
(1963) 109 CLR 243
DFC of T v Sheehan
86 ATC 4718
(1987) 18 ATR 194
89 ATC 618
AAT Case 5237
(1988-89) 20 ATR 3806