INCOME TAX RATES ACT 1986 [ARCHIVE]

PART I - PRELIMINARY  

SECTION 3 [ARCHIVE]   INTERPRETATION  

3(1)  

reduced notional income
, in relation to a taxpayer deriving a notional income in the year of income, as specified in:


(a) section 59AB or 86 of the Assessment Act; or


(b) the former section 42-300 of the Income Tax Assessment Act 1997;

means the amount that would be that notional income if that notional income had been calculated by reference to the reduced taxable income instead of by reference to the taxable income.

PART II - RATES OF INCOME TAX PAYABLE UPON INCOMES OTHER THAN INCOMES OF COMPANIES, PRESCRIBED UNIT TRUSTS, SUPERANNUATION FUNDS AND CERTAIN OTHER TRUSTS  

Division 3 - Rates of Tax  

Subdivision B - Rates of Tax and Notional Rates  

SECTION 12 [ARCHIVE]   RATES OF TAX AND NOTIONAL RATES  

12(5)   [Notional income]  

Subject to sections 13 and 15, the rate of tax in respect of a taxable income in any case where section 59AB or 86 of the Assessment Act or the former section 42-295 of the Income Tax Assessment Act 1997 applies is as set out in Schedule 9.

SCHEDULE 9  

Subsection 12(5)


RATES OF TAX BY REFERENCE TO A NOTIONAL INCOME

PART I - RESIDENT TAXPAYERS  

1.  
Subject to clause 2, the rates of tax on the taxable income of a resident taxpayer deriving a notional income as specified by section 59AB or 86 of the Assessment Act or the former section 42-300 of the Income Tax Assessment Act 1997 are as follows:


(a) 38% for the amount (if any) of the EC part of the taxable income that does not exceed the difference between:


(i) the amount that would have been the taxed element of the retained amount of the post-June 83 component of the ETP if the amount of the excessive component of the ETP had been nil; and

(ii) the taxed element of the retained amount of the post-June 83 component of the ETP;
worked out disregarding section 27AAA of the Assessment Act;


(aa) 47% for the remainder (if any) of the EC part of the taxable income;


(b) for every $1 of the ordinary taxable income - the amount worked out using the formula:


Tax at ordinary rates on non-EC notional income
Number of dollars in the non-EC notional income


where:
  • ``Tax at ordinary rates on non-EC notional income'' means the tax that would be payable under clause 1 of Part I of Schedule 7 on an ordinary taxable income equal to the non-EC notional income;
  • ``Number of dollars in the non-EC notional income'' means the number of whole dollars in the non-EC notional income;
  • In this clause, ``non-EC notional income'' means the amount that would have been the notional income as specified by section 59AB or 86 of the Assessment Act or the former section 42-300 of the Income Tax Assessment Act 1997 if that notional income had been calculated by reference to ordinary taxable income instead of by reference to taxable income.

    2.  
    For every $1 of the taxable income of a resident taxpayer-


    (a) who derives a notional income, as specified by section 59AB or 86 of the Assessment Act or the former section 42-300 of the Income Tax Assessment Act 1997; and


    (b) whose taxable income consists of or includes a special income component;

    the rate of tax is the amount ascertained in accordance with the formula


    A+B ,
    C

    where-

    A is the amount of tax that would be payable by the taxpayer under clause 1 on a taxable income equal to the reduced taxable income;

    B is 5 times the difference between-

  • (c) the amount of tax that would be payable by the taxpayer under clause 1 of Part I of Schedule 7 on a taxable income equal to the sum of-
  • (i) the reduced notional income; and
  • (ii) 20% of the special income component of the taxable income; and
  • (d) the amount of tax that would be payable by the taxpayer under clause 1 of Part I of Schedule 7 on a taxable income equal to the reduced notional income; and
  • C is the number of whole dollars in the taxable income.

    In applying the formula, component B is to be worked out on the assumption that the whole of the taxable income is ordinary taxable income.

    PART II - NON-RESIDENT TAXPAYERS  

    1.  
    Subject to clause 2, the rates of tax on the taxable income of a non-resident taxpayer deriving a notional income as specified by section 59AB or 86 of the Assessment Act or the former section 42-300 of the Income Tax Assessment Act 1997 are as follows:


    (a) 38% for the amount (if any) of the EC part of the taxable income that does not exceed the difference between:


    (i) the amount that would have been the taxed element of the retained amount of the post-June 83 component of the ETP if the amount of the excessive component of the ETP had been nil; and

    (ii) the taxed element of the retained amount of the post-June 83 component of the ETP;
    worked out disregarding section 27AAA of the Assessment Act;


    (aa) 47% for the remainder (if any) of the EC part of the taxable income;


    (b) for every $1 of the ordinary taxable income - the amount worked out using the formula:


    Tax at ordinary rates on non-EC notional income
    Number of dollars in the non-EC notional income


    where:
  • ``Tax at ordinary rates on non-EC notional income'' means the tax that would be payable under clause 1 of Part II of Schedule 7 on an ordinary taxable income equal to the non-EC notional income;
  • ``Number of dollars in the non-EC notional income'' means the number of whole dollars in the non-EC notional income;
  • In this clause, ``non-EC notional income'' means the amount that would have been the notional income as specified by section 59AB or 86 of the Assessment Act or the former section 42-300 of the Income Tax Assessment Act 1997 if that notional income had been calculated by reference to ordinary taxable income instead of by reference to taxable income.

    2.  
    For every $1 of the taxable income of a non-resident taxpayer-


    (a) who derives a notional income, as specified by section 59AB or 86 of the Assessment Act or the former section 42-300 of the Income Tax Assessment Act 1997; and


    (b) whose taxable income consists of or includes a special income component;

    the rate of tax is the amount ascertained in accordance with the formula


    A+B ,
    C

    where-

    A is the amount of tax that would be payable by the taxpayer under clause 1 on a taxable income equal to the reduced taxable income;

    B is 5 times the difference between-

  • (c) the amount of tax that would be payable by the taxpayer under clause 1 of Part II of Schedule 7 on a taxable income equal to the sum of-
  • (i) the reduced notional income; and
  • (ii) 20% of the special income component of the taxable income; and
  • (d) the amount of tax that would be payable by the taxpayer under clause 1 of Part II of Schedule 7 on a taxable income equal to the reduced notional income; and
  • C is the number of whole dollars in the taxable income.

    In applying the formula, component B is to be worked out on the assumption that the whole of the taxable income is ordinary taxable income.