INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART I - PRELIMINARY  

SECTION 2   2   REPEAL  
The Acts specified in column 1 of Schedule 1 are repealed to the extent respectively specified in column 2 of that Schedule.

SECTION 3   3   SAVING  
Nothing in this Act shall affect the operation of the Commonwealth Debt Conversion Act 1931 or of subsection 52B(2) of the Commonwealth Inscribed Stock Act 1911-1932 .

SECTION 4   4   TAX PAYABLE ON INTEREST ON CERTAIN TREASURY BILLS  
The application of section 20 of the Commonwealth Debt Conversion Act 1931 shall extend to such Commonwealth Treasury Bills issued to banks in Australia, on or after 31 July 1931, as the Australian Loan Council, constituted in pursuance of the Schedule to the Financial Agreement Validation Act 1929 , determines.

SECTION 6   INTERPRETATION  

6(1)  

adopted child
, in relation to a person, means a person adopted by the first-mentioned person:


(a) under the law of a State or Territory relating to the adoption of children; or


(b) under the law of any other place relating to the adoption of children, if the validity of the adoption would be recognized under the law of any State or Territory.

apportionable deductions
means:


(a) deductions allowed or allowable under section 77F ; or


(aa) deductions allowed or allowable under subsection 78(4) or (5) of this Act or section 30-15 of the Income Tax Assessment Act 1997 (the 1997 Act ) because of item 1, 2, 7 or 8 of the table in that section (except deductions allowed or allowable for gifts of property that is trading stock of the taxpayer to which subsection 36(1) of this Act or section 70-90 of the 1997 Act applies, if the taxpayer has not made, and does not make, an election under subsection 36(3) or section 36AAA of this Act, or Subdivision 385-E of the 1997 Act, in relation to the property); or


(b) deductions allowed or allowable under section 72 , other than deductions allowed or allowable in respect of rates or land tax incurred in gaining or producing assessable income or necessarily incurred in carrying on a business for the purpose of gaining or producing assessable income.

assessable income
has the meaning given by Division 6 of the Income Tax Assessment Act 1997 .

assessable income from petroleum
, in relation to a taxpayer, means assessable income derived by the taxpayer from the sale of petroleum obtained from mining operations carried on by him in Australia or in Papua New Guinea or of the products of petroleum so obtained.

business
includes any profession, trade, employment, vocation or calling, but does not include occupation as an employee.

child
, in relation to a person, includes an adopted child, a step-child or an ex-nuptial child of that person.

Commonwealth country
means:


(a) any of the following countries (other than a country declared by the regulations not to be a Commonwealth country), namely, Barbados, Republic of Botswana, Canada, Ceylon, Republic of Cyprus, Fiji, Republic of The Gambia, Republic of Ghana, Guyana, Republic of India, Jamaica, Republic of Kenya, Kingdom of Lesotho, Republic of Malawi, Malaysia, Malta, Mauritius, Republic of Nauru, New Zealand, Federal Republic of Nigeria, Sierra Leone, Republic of Singapore, Kingdom of Swaziland, United Republic of Tanzania, Independent State of Western Samoa, Kingdom of Tonga, Trinidad and Tobago, Republic of Uganda, United Kingdom of Great Britain and Northern Ireland, Republic of Zambia; and


(b) any other country declared by the regulations to be a Commonwealth country;

and includes:


(c) a colony, overseas territory or protectorate of a country that is a Commonwealth country by virtue of paragraph (a) or (b); and


(d) a territory for the international relations of which a country that is a Commonwealth country by virtue of paragraph (a) or (b) is responsible.

Commonwealth education or training payment
means a payment by the Commonwealth, or in connection with a payment by the Commonwealth, of an allowance or reimbursement:


(a) to or on behalf of a participant in a Commonwealth labour market program; or


(b) to or on behalf of a student under:


(i) (Repealed by No 45 of 1998)

(ii) the scheme known as ABSTUDY; or

(iii) the scheme known as the Assistance for Isolated Children Scheme; or

(iv) the scheme known as the Veteran's Children Education Scheme; or

(iva) the scheme under section 258 of the Military Rehabilitation and Compensation Act 2004 to provide education and training; or

(v) the scheme known as youth allowance; or

(vi) the scheme known as austudy payment;

in respect of a period commencing at a time when the student was at least 16 years old.

Commonwealth labour market program
means a program administered by the Commonwealth under which:


(a) unemployed persons are given training in skills to improve their employment prospects; or


(b) unemployed persons are assisted in obtaining employment or to become self-employed; or


(c) employed persons are given training in skills and other assistance to aid them in continuing to be employed by their current employer or in obtaining other employment.

company
includes all bodies or associations corporate or unincorporate, but does not include partnerships or non-entity joint ventures.

electronic signature
, in relation to a person, means a unique identification in an electronic form that is approved by the Commissioner.

exempt income from petroleum
, in relation to a taxpayer, means exempt income derived from sources out of Australia by the taxpayer from the sale of petroleum obtained from mining operations carried on by him in Australia or in Papua New Guinea or of the products of petroleum so obtained.

failure to notify penalty
means the penalty worked out under Division 2 of Part IIA of the Taxation Administration Act 1953 .

firearms surrender arrangements
means:


(a) Commonwealth, State or Territory legislation; or


(b) administrative arrangements of a State or a Territory;

implementing the agreement arising from the meeting of the Police Ministers held on 10 May 1996 concerning the surrender of prohibited firearms.

fishing operations
means:


(a) operations relating directly to the taking or catching of fish, turtles, dugong, crustacea or oysters or other shellfish; or


(b) pearling operations;

and includes oyster farming, but does not include whaling and also does not include operations conducted otherwise than for the purposes of a business.

forest operations
means the planting or tending in a plantation or forest of trees intended for felling or the felling of trees in a plantation or forest, and includes the transport by a person who has felled trees in a plantation or forest of those trees or parts of those trees from the plantation or forest to a place where they are to be first subjected to milling or processing (including processing for the production of posts, poles or railway sleepers) or to a place from which they are to be transported to such a place, but does not include operations conducted otherwise than in the course of, or for the purposes of, a business.

friendly society
means:


(a) the body that is a friendly society for the purposes of the Life Insurance Act 1995 ; or


(b) a body that is registered or incorporated as a friendly society under a law of a State or Territory; or


(c) a body that is permitted, by a law of a State or Territory, to assume or use the expression ``friendly society''; or


(d) a body that, immediately before the date that is the transfer date for the purposes of the Financial Sector Reform (Amendments and Transitional Provisions) Act (No. 1) 1999 , was registered or incorporated as a friendly society under a law of a State or Territory.

general partner
means a partner of a limited partnership whose liability in relation to the partnership is not limited.

horticulture
includes:


(a) propagation as well as cultivation; or


(b) propagation or cultivation of seeds, bulbs, spores or similar things; or


(c) propagation or cultivation of fungi; or


(d) propagation or cultivation in environments other than soil, whether natural or artificial;

but does not include the doing of any thing other than in the course of, or for the purposes of, a business.

income from petroleum
means assessable income from petroleum or exempt income from petroleum.

income tax laws of Papua New Guinea
means the laws in force in Papua New Guinea (other than laws of the Commonwealth) relating to taxes on income.

late reconciliation statement penalty
means the penalty worked out under Division 3 of Part IIA of the Taxation Administration Act 1953 .

minerals
includes petroleum.

natural resource
means minerals or any other non-living resource of the land, sea-bed or sea.

paid-up share capital
of a company means the amount standing to the credit of the company's share capital account reduced by:


(a) the amount (if any) that represents amounts unpaid on shares; and


(b) the tainting amount (if any).

Papua New Guinea
means:


(a) in relation to a time before the establishment of an independent sovereign state in the territories that constituted the Territory of Papua and the Territory of New Guinea - those Territories; or


(b) in relation to a later time - that independent sovereign state.

Papua New Guinea independence day
means the date of establishment of an independent sovereign state in the territories that constituted the Territory of Papua and the Territory of New Guinea.

pearling operations
means operations relating directly to the taking of pearl shell or the culture of pearls or pearl shell, and includes operations relating directly to the taking or catching of trochus, beche-de-mer or green snails, but does not include operations conducted otherwise than for the purposes of a business.

petroleum
means:


(a) any naturally occurring hydrocarbon, whether in a gaseous, liquid or solid state;


(b) any naturally occurring mixture of hydrocarbons, whether in a gaseous, liquid or solid state; or


(c) any naturally occurring mixture of one or more hydrocarbons, whether in a gaseous, liquid or solid state, andone or more of the following, that is to say, hydrogen sulphide, nitrogen, helium and carbon dioxide;

and includes any petroleum as defined by paragraph (a), (b) or (c) that has been returned to a natural reservoir.

petroleum prospecting or mining information
means geological, geophysical or technical information, being information that relates to the presence, absence or extent of deposits of petroleum in an area or is likely to be of assistance in determining the presence, absence or extent of such deposits in an area, and has been obtained from prospecting or mining for petroleum.

petroleum prospecting or mining right
means an authority, licence, permit or right under a law of the Commonwealth, a State or a Territory to prospect, explore or mine for petroleum in a particular area, or a lease under such a law by virtue of which the lessee is entitled to prospect, explore or mine for petroleum on land included in the lease, and includes an interest in such an authority, licence, permit, right or lease.

previous Act
means the Income Tax Assessment Act 1922 , and when considered in relation to any time means that Act, or, if it has been amended, that Act as amended as in force at that time.

primary production
means production resulting directly from:


(a) the cultivation of land;


(b) the maintenance of animals or poultry for the purpose of selling them or their bodily produce, including natural increase;


(c) fishing operations;


(d) forest operations; or


(e) horticulture;

and includes the manufacture of dairy produce by the person who produced the raw material used in that manufacture.

public securities
means:


(a) Commonwealth securities;


(b) bonds, debentures, stock or other securities issued by:


(i) a State;

(ii) a Territory; or

(iii) a municipal corporation, other local governing body or public authority constituted byor under an Act or by or under a law of a State or Territory; and


(c) securities issued in respect of a loan to a company the principal business of which is the supply and distribution, by a system of reticulation, in Australia or in a Territory, of water, gas or electricity;

but does not include:


(d) securities referred to in paragraph (b) (not being securities to which paragraph (e) applies) issued in respect of a loan raised outside Australia and the Territories unless there is in force a declaration by the Treasurer, published in the Gazette , that those securities shall be public securities for the purposes of this Act; or


(e) securities issued after 12 April 1976 by a bank.

relative
, in relation to any person, means any of the following, namely:


(a) the parent, grandparent, brother, sister, uncle, aunt, nephew, niece, lineal descendant or adopted child of that person or of his or her spouse; and


(b) the spouse of that person or of any other person specified in paragraph (a).

reportable fringe benefits amount
for a year of income in respect of an employee's employment by an employer has the same meaning as in the Fringe Benefits Tax Assessment Act 1986 (as it applies of its own force or because of the Fringe Benefits Tax (Application to the Commonwealth) Act 1986 ).

shares
, in relation to a company, means shares in the capital of the company, and includes stock.

spouse
, in relation to a person, includes another person who, although not legally married to the person, lives with the person on a bona fide domestic basis as the husband or wife of the person.

tainting amount
has the same meaning as in the Income Tax Assessment Act 1997 ..

year of income
means:


(a) in relation to a company (except a company in the capacity of a trustee) - the financial year next preceding the year of tax, or the accounting period, if any, adopted under this Act in lieu of that financial year; and


(b) in relation to any other person:


(i) the financial year for which income tax is levied; or

(ii) if an accounting period is adopted under this Act in lieu of that financial year and subparagraph (iii) does not apply - that accounting period; or

(iii) an accounting period that commences or ends under section 18A , if that accounting period would (but for that section) have formed part of the financial year referred to in subparagraph (i) or the accounting period referred to in subparagraph (ii).

6(1B)   [References to benefit or fringe benefit]  

A reference in this Act to a benefit, or a fringe benefit, within the meaning of the Fringe Benefits Tax Assessment Act 1986 , includes a reference to a matter or thing that would be a benefit, or a fringe benefit, as the case may be, within the meaning of that Act, if paragraphs (d) and (e) of the definition of employer in subsection 136(1) of that Act were omitted.

6(7)   [Foreign superannuation fund - PNG]  

In determining, in relation to the year of income in which Papua New Guinea independence day occurs or any subsequent year of income, whether a provident, benefit, superannuation or retirement fund was a foreign superannuation fund within the definition of that expression in subsection (1):


(a) the reference in that definition to a country outside Australia shall be deemed to include a reference to Papua New Guinea;


(b) references in that definition to a Territory shall be deemed not to include references to Papua New Guinea; and


(c) the reference in that definition to an amount having been set aside for, or having been paid to, a fund shall be deemed not to include a reference to an amount set aside for, or paid to, a fund established in Papua New Guinea where the amount was set aside or paid before Papua New Guinea independence day.

6(7A)   [Pensions paid out from fund]  

A provident, benefit, superannuation or retirement fund does not fail to meet the requirement set out in paragraph (b) of the definition of foreign superannuation fund in subsection (1) merely because pensions are paid out of the fund to residents of Australia or of a Territory.

6(8)   [Public securities - PNG]  

The establishment of an independent sovereign state in the territories that constituted the Territory of Papua and the Territory of New Guinea shall not be taken to affect the operation of the definition of public securities in subsection (1) in relation to securities issued before Papua New Guinea independence day but securities issued on or after that day shall not be taken to be public securities by reason that they are issued by a municipal corporation, other local governing body or public authority that was constituted before that day by or under the law of Papua New Guinea.

SECTION 6AA   CERTAIN SEA INSTALLATIONS AND OFFSHORE AREAS TO BE TREATED AS PART OF AUSTRALIA  

6AA(3)   [Income derived before 18 October 1968]  

This section does not operate so as to include in the assessable income of a person any income derived before 18 October 1968 that would not otherwise have been so included.

6AA(3A)   [Income derived before 18 September 1974]  

This section does not operate so as to include in the assessable income of a person any income derived before 18 September 1974 that would not have been so included if section 4 of the Income Tax Assessment Act (No. 2) 1974 had not been enacted.

6AA(3B)   [Income derived before 15 October 1987]  

Subject to subsection (3C), this section does not operate so as to include in the assessable income of a person any income derived before 15 October 1987 that would not have been so included if section 9 of the Taxation Laws Amendment Act 1988 had not come into operation.

6AA(3C)   [Application of section]  

This section shall be taken to have applied as if the reference in paragraph (4)(a) of this section, as in force during the period commencing when the Petroleum (Submerged Lands) Amendment Act 1980 came into operation and ending immediately before this subsection came into operation, to the Petroleum (Submerged Lands) Act 1967-1974 had instead been a reference to the Petroleum (Submerged Lands) Act 1967 as in force immediately before the Petroleum (Submerged Lands) Amendment Act 1980 came into operation.

6AA(4)  


(d) Papua New Guinea offshore area means the sea-bed and subsoil beneath, and the space above, the waters within the areas that were specified in Schedule 2 to the Petroleum (Submerged Lands) Act 1967-1974 as being adjacent, respectively, to the Territory of Papua and to the Territory of New Guinea, to the extent only that those waters are territorial waters or superjacent waters of the continental shelf; and

SECTION 6G   ACCRUED LEAVE TRANSFER PAYMENTS  

6G(1)   Meaning of ``accrued leave transfer payment''.  

For the purposes of this Act, a payment made by a taxpayer ( ``payer'' ) to another taxpayer ( ``payee'' ) is an accrued leave transfer payment if:


(a) the payment is in respect of long service leave, annual leave, sick leave or other leave; and


(b) the whole or a part of the leave accrued when the person to whom the leave relates was an employee of the payer; and


(c) at the time the payment is made, the person to whom the leave relates:


(i) has ceased, or is about to cease, to be an employee of the payer; and

(ii) has become, or is about to become, an employee of the payee; and


(d) the payment is made under, or for the purposes of facilitating the provisions of:


(i) a law of the Commonwealth, a State or a Territory; or

(ii) an award, order, determination or industrial agreement in force under any such law.

6G(2)   Extended meaning of ``employee''.  

In subsection (1):

"employee"
includes a person who:


(a) holds an office, appointment or position; or


(b) performs functions or duties; or


(c) engages in any work; or


(d) does any other acts or things;

where the person accrues long service leave, annual leave, sick leave or other leave because of:


(e) the holding of that office, appointment or position; or


(f) the performance of those functions or duties; or


(g) the engaging in of that work; or


(h) the doing of those other acts or things;

as the case requires.