Christine Milne (Tasmania, Australian Greens) Share this | Hansard source

I move Australian Greens amendment (1) on sheet 7542:

(1) Schedule 1, page 3 (line 1) to page 4 (line 13), omit the Schedule, substitute:

Schedule 1—Quarterly R&D credits

Part 1—Main amendment

Taxation Administration Act 1953

1 After Part 2 -10 in Schedule 1

  Insert:

Part 2 -15—Quarterly credits of refundable tax offsets

Division 48—Quarterly credits

Table of Subdivisions

Guide to Division 48

  48-A Object

  48-B Participating in the quarterly credits system

  48-C Tests for participation

  48-D Working out and paying quarterly credit amounts

  48-E End of year reconciliation

  48-F Ending participation

  48-P Special rules for consolidated groups etc.

  48-T Other matters

Guide to Division 48

48 -1 What this Division is about

You can apply to participate in the quarterly credits system for an income year if you expect to be entitled to refundable tax offsets for the income year that are covered by the system.

Participating gives you quarterly credits towards your likely refund from those tax offsets. These credits will either be based on your refund from a recent income year, or on a varied amount chosen by you after estimating your refund for the current year.

A reconciliation happens when the current year's assessment is made. General interest charge may be payable if you chose to base your credits on a varied amount and they are excessively high.

Subdivision 48 -A—Object

Table of sections

  48-3 Object

   48 -3 Object

     The object of this Division is to benefit the Australian economy by improving entities' cash flow by enabling them to realise the benefit of certain expected refundable tax offsets on a quarterly basis during the income year.

Subdivision 48 -B—Participating in the quarterly credits system

Table of sections

  48-5 Participating in the quarterly credits system

  48-10 Refusing participation

  48-15 Applying to participate

48 -5 Participating in the quarterly credits system

(1) The Commissioner may, on application, allow you to participate in the *quarterly credits system for:

  (a) each of the *instalment quarters in an income year, other than any excluded under subsection (3); and

  (b) one or more specified *tax offsets covered by section 48-100.

Note: If you are dissatisfied with a decision under this subsection, you may object against it in the manner set out in Part IVC (see section 48-800).

(2) The Commissioner must notify you in writing of:

  (a) the Commissioner's decision under subsection (1); and

  (b) the reasons for the decision, if the decision refuses to allow you to participate as set out in your application.

(3) An *instalment quarter is excluded if the Commissioner receives your application after:

  (a) if all or a part of a December falls within the last month of the instalment quarter—the next 14 February after the end of the instalment quarter; or

  (b) otherwise—the 14th day after the end of the instalment quarter.

48 -10 Refusing participation

(1) The Commissioner must, under subsection 48-5(1), refuse to allow you to participate for:

  (a) any of the *instalment quarters, and a specified *tax offset, if the Commissioner is aware that you fail a test in Subdivision 48-C necessary for that participation; or

  (b) a specified instalment quarter, and a specified tax offset, if during that instalment quarter you have already withdrawn under section 48-400 from participating in the *quarterly credits system for that tax offset.

Note 1: The Commissioner may allow you to participate to the extent that paragraph (a) or (b) does not prevent this.

Note 2: This subsection applies separately for each tax offset mentioned in your application.

(2) The Commissioner may, under subsection 48-5(1), refuse to allow you to participate for one or more specified *instalment quarters and *tax offsets if:

  (a) you fail to give the Commissioner, in accordance with section 48-15, information requested under that section; or

  (b) for a tax offset listed in table item 20 (about R&D) in section 48-100—at any time you failed to give *Innovation Australia, in accordance with section 28H of the Industry Research and Development Act 1986, information requested under that section of that Act.

48 -15 Applying to participate

(1) An application to participate in the *quarterly credits system for one or more *instalment quarters in an income year, and one or more *tax offsets, must be given to the Commissioner in the *approved form before:

  (a) if all or a part of a December falls within the last month of the income year—the next 15 February after the end of the income year; or

  (b) otherwise—the 15th day after the end of the income year.

(2) The Commissioner may request you in writing to give specified information to the Commissioner about your application.

(3) The request may be for the information to be given to the Commissioner in the *approved form within:

  (a) 14 days after the request was made; or

  (b) a further period allowed by the Commissioner.

Note: A failure to give the information in accordance with this subsection may result in the Commissioner refusing to allow you to participate (see subsection 48-10(2)).

Subdivision 48 -C—Tests for participation

Table of sections

  48-100 Tests for participation

  48-105 Reasonable receipt test

  48-110 Complying taxpayer test

   48 -100 Tests for participation

     To participate in the *quarterly credits system for one or more *instalment quarters in an income year and a *tax offset listed in the table, you must pass each of the following tests:

  (a) the reasonable receipt test in section 48-105;

  (b) the complying taxpayer test in section 48-110;

  (c) any extra test listed in the table for the tax offset.

48 -105 Reasonable receipt test

     It must be reasonable to expect that:

  (a) you will become entitled to the *tax offset for the income year; and

  (b) the tax offset will be subject to the refundable tax offset rules.

48 -110 Complying taxpayer test

(1) You pass the complying taxpayer test if:

  (a) no part of any of your *tax-related liabilities remains unpaid after the time by which that liability is due to be paid; and

  (b) during the current income year, and the 5 most recent income years, you have not been convicted of an offence against:

     (i) a *taxation law; or

     (ii) a law relating to a taxation law; and

(c) you are complying with all of your obligations under taxation laws to provide documents or information to the Commissioner or another entity; and

  (d) it is reasonable to expect that you will comply with your obligations under taxation laws in the future.

(2) However, if this table applies to you, the corresponding entities mentioned in the table (your managing entities) must also satisfy the paragraphs in subsection (1).

Note: This subsection only applies to each of your managing entities when it is in that capacity (see section 960-100 of the Income Tax Assessment Act 1997).

Subdivision 48 -D—Working out and paying quarterly credit amounts

Table of sections

  48-200 Quarterly credit amounts

  48-205 Standard amount

  48-210 Choosing a varied amount

  48-215 Disallowing proposed varied amounts

  48-220 Notifying the Commissioner of proposed varied amounts

  48-225 When quarterly credit amounts are payable to you

  48-230 When quarterly credit amounts are payable by you

  48-235 The amount's quarterly credit due day

   48 -200 Quarterly credit amounts

     If you are participating in the *quarterly credits system for an *instalment quarter in an income year (the present year) and one or more *tax offsets (the present tax offsets), your quarterly credit amount for the instalment quarter and the present tax offsets is:

  (a) any varied amount applying under section 48-210 for the instalment quarter and the present tax offsets; or

  (b) otherwise—the standard amount worked out under section 48-205.

Note: If you recommence participating in the quarterly credits system, paragraph (a) covers any varied amount applying for the instalment quarter under your earlier participation in the system.

48 -205 Standard amount

(1) If:

  (a) for the most recent income year (the reference year) for which the Commissioner has made an assessment of your income tax, you were entitled to *tax offsets of the same kinds as each of the present tax offsets; and

  (b) those reference year tax offsets were subject to the refundable tax offset rules; and

  (c) the reference year is one of the last 2 income years immediately before the present year;

the standard amount worked out under this section is 1/4 of the lesser of:

  (d) the total amount of those reference year tax offsets; and

  (e) the total of your *tax offset refunds (for tax offsets of any kind) for the reference year.

Note: If the instalment quarter is the first in the present year, the reference year will usually be a different year to that for later instalment quarters.

(2) Otherwise, the standard amount worked out under this section is nil.

48 -210 Choosing a varied amount

(1) You can choose to notify the Commissioner under section 48-220 of a proposed varied amount for the *instalment quarter and the present tax offsets.

Note: If you do, your notice must include a proposed varied amount for each later instalment quarter in the income year (see paragraph 48-215(1)(a)). A later notice can propose a replacement varied amount for those later instalment quarters.

(2) An amount you so notify for an *instalment quarter is the varied amount applying under this section for that instalment quarter and the present tax offsets if that amount is the most recent that:

  (a) has been so notified for that instalment quarter; and

  (b) has not been disallowed by the Commissioner.

That amount may be a nil or negative amount.

(3) The Commissioner may disallow a proposed varied amount.

Note: If you are dissatisfied with a decision under this subsection, you may object against it in the manner set out in Part IVC (see section 48-800).

(4) The Commissioner must notify you in writing of:

  (a) a decision under subsection (3) to disallow a proposed varied amount; and

  (b) the reasons for the decision.

48 -215 Disallowing proposed varied amounts

(1) The Commissioner must, under subsection 48-210(3), disallow each proposed varied amount included in your notice given under section 48-220 if:

  (a) that notice does not include a proposed varied amount for each of the following *instalment quarters in the present year for which you are participating in the *quarterly credits system:

     (i) an instalment quarter that is yet to end when you gave that notice;

     (ii) an instalment quarter for which the last month included all or a part of a December, if you gave that notice before the next 15 February;

     (iii) an instalment quarter that ended less than 15 days before you gave that notice; or

  (b) for any of the proposed varied amounts included in that notice (the test amount), the sum of:

     (i) the test amount; and

     (ii) any of the other proposed varied amounts that are for earlier instalment quarters in the present year; and

     (iii) your *quarterly credit amounts payable for any earlier instalment quarters in the present year;

     is less than nil or exceeds the amount worked out under subsection (2).

(2) Work out the amount from the following formula:

where:

  estimated end of year amount means the lesser of:

  (a) the likely total of the present tax offsets and any other *tax offsets for which you are participating in the *quarterly credits system for an earlier *instalment quarter in the present year; and

  (b) the likely total of your *tax offset refunds (for tax offsets of any kind) for the present year.

  number of instalment quarters so far means the number of *instalment quarters in the income year, up to (and including) the instalment quarter for which the test amount is proposed, for which you are participating in the *quarterly credits system.

(3) The Commissioner may, under subsection 48-210(3), disallow each proposed varied amount included in your notice under section 48-220 if you fail to give the Commissioner, in accordance with that section, information requested under that section.

(4) The Commissioner must not, under subsection 48-210(3), disallow the proposed varied amounts included in your notice under section 48-220 if:

  (a) none of the following provisions applies:

     (i) paragraph (1)(a) or subsection (3);

     (ii) paragraph (1)(b), if the sum in that paragraph is less than nil; and

(b) each of those proposed varied amounts is less than or equal to the amount that would otherwise be your *quarterly credit amount for the relevant *instalment quarter and the present tax offsets.

48 -220 Notifying the Commissioner of proposed varied amounts

(1) A notice of one or more proposed varied amounts must be given to the Commissioner in the *approved form before:

  (a) if all or a part of a December falls within the last month of the earliest of the *instalment quarters to which the amounts relate—the next 15 February after the end of that instalment quarter; or

  (b) otherwise—the 15th day after the end of the earliest of the instalment quarters to which the amounts relate.

Note: You must keep records in relation to the varied amount (see section 262A of the Income Tax Assessment Act 1936).

(2) The Commissioner may request you in writing to give specified information to the Commissioner about the notice.

(3) The request may be for the information to be given to the Commissioner in the *approved form within:

  (a) 14 days after the request was made; or

  (b) a further period allowed by the Commissioner.

Note: A failure by you to give the information in accordance with this subsection may result in the Commissioner refusing to allow the proposed varied amounts (see subsection 48-215(3)).

48 -225 When quarterly credit amounts are payable to you

General rule

(1) The Commissioner must, on behalf of the Commonwealth, pay you your *quarterly credit amount for an *instalment quarter and the present tax offsets on or before this day:

  (a) the 28th day of the calendar month after the end of the instalment quarter; or

  (b) if all or a part of a December falls within the last month of the instalment quarter—the next 28 February.

Delayed payment—varied amount under examination

(2) Despite subsection (1), if:

  (a) your *quarterly credit amount is a varied amount applying under section 48-210 that exceeds the amount otherwise payable to you; and

  (b) the Commissioner is examining whether to disallow that varied amount;

the Commissioner may, until the examination ends, delay paying you so much of that varied amount as is equal to the excess.

Note 1: If you are dissatisfied with a decision under this subsection to delay payment of the excess, you may object against it in the manner set out in Part IVC (see section 48-800).

Note 2: Interest accrues under Part IIIAB of the Taxation (Interest on Overpayments and Early Payments) Act 1983 while the Commissioner delays payment of the excess.

Note 3: The excess (and the interest) is not payable if the examination results in the varied amount being disallowed.

Delayed payment—participation under examination

(3) Despite subsection (1), the Commissioner may delay paying you your *quarterly credit amount if and while:

  (a) the Commissioner is examining whether your participation should be revoked; or

  (b) the Commissioner is aware that a regulator mentioned in the table is examining a matter relevant to whether your participation should be revoked.

Note 1: If you are dissatisfied with a decision under this subsection to delay your payment, you may object against it in the manner set out in Part IVC (see section 48-800).

Note 2: Interest accrues under Part IIIAB of the Taxation (Interest on Overpayments and Early Payments) Act 1983 while the Commissioner delays your payment.

Note 3: Your payment (and the interest) is not payable if the examination results in your participation being revoked.

Delayed payment—you cannot receive electronic payments etc.

(4) Despite subsection (1), the Commissioner must delay paying you your *quarterly credit amount if and while the Commissioner is aware that your circumstances do not enable payments to be made to you in accordance with subsection 48-820(1) (about electronic payments etc.).

Note: Interest accrues under Part IIIAB of the Taxation (Interest on Overpayments and Early Payments) Act 1983 if the Commissioner delays your payment more than 14 days after becoming aware that electronic payments can now be made to you.

Matters relevant to delayed payments

(5) The Commissioner must notify you in writing of:

  (a) a decision under subsection (2), (3) or (4) to delay your payment; and

  (b) the reasons for the decision.

Payments cannot be made on or after assessment

(6) Despite subsection (1), your *quarterly credit amount for an *instalment quarter and the present tax offsets must not be paid to you on or after the assessment day (see paragraph 48-300(1)(b)) for the present year.

48 -230 When quarterly credit amounts are payable by you

(1) However, if your *quarterly credit amount for the *instalment quarter and the present tax offsets is a negative amount, you are liable to pay the Commonwealth that amount (expressed as a positive amount).

Note: The amount will only be a negative amount if you choose a varied amount that is a negative amount.

(2) That amount is due and payable on the *quarterly credit amount's *quarterly credit due day.

Note: For provisions about collection and recovery of the amount, see Part 4-15.

(3) If any of that amount (the varied amount) remains unpaid after the *quarterly credit amount's *quarterly credit due day, you are liable to pay the *general interest charge on the unpaid amount for each day in the period that:

  (a) starts on the day after that due day; and

  (b) ends on the last day any of the following remains unpaid:

     (i) the varied amount;

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

(4) This section does not apply if the *quarterly credit amount's *quarterly credit due day is on or after the assessment day (see paragraph 48-300(1)(b)) for the present year.

48 -235 The amount ' s quarterly credit due day

     The quarterly credit due day for a *quarterly credit amount is:

  (a) if that amount is a positive amount—the day referred to in subsection 48-225(1); or

  (b) if that amount is a nil or negative amount—the day that would have been the day referred to in subsection 48-225(1) were that amount a positive amount.

Subdivision 48 -E—End of year reconciliation

Table of sections

48-300 Debit equal to the total quarterly credits paid

48-305 When the debit is due

48-350 Liability to GIC on excess quarterly credits worked out using varied amounts

48-355 Benchmark amount for the variation quarter

48 -300 Debit equal to the total quarterly credits paid

(1) You are liable to pay the Commonwealth an amount (a debit) under this section if:

  (a) you are participating in the *quarterly credits system for one or more *instalment quarters in an income year and one or more *tax offsets; and

  (b) on a particular day (the assessment day), the Commissioner makes an assessment:

     (i) of the total of your *tax offset refunds for the income year; or

     (ii) that you can get no such refunds for the income year.

Note: The debit will be offset by a credit equal to the total of your tax offset refunds.

(2) The debit is equal to the sum of your *quarterly credit amounts for those *instalment quarters and those *tax offsets, disregarding so much of any of those amounts as:

  (a) is a positive amount not paid before the assessment day; or

  (b) is a negative amount with a *quarterly credit due day that is on or after the assessment day.

Note: This debit only includes your quarterly credit amounts for those instalment quarters for which you are participating in the quarterly credits system. It does not include quarterly credit amounts for instalment quarters for which you (under Subdivision 48-F) have ceased to participate.

(3) The Commissioner must give you notice of the debit, unless subsection 166A(3) of the Income Tax Assessment Act 1936 applies to you for the income year.

Note 1: This could be done by including the debit in the notice of your assessment referred to in paragraph (1)(b).

Note 2: The debit is the debit as amended. So, if a previously notified debit is incorrect, notice of the debit (as amended) must also be given for this subsection to be satisfied.

48 -305 When the debit is due

(1) Parts of the debit may be due on different days.

(2) So much of the debit as does not exceed the total of your *tax offset refunds for the income year is due and payable on the assessment day.

Note: This part of the debit will be offset by the credit equal to the total of your tax offset refunds.

(3) So much of the debit (if any) as exceeds the total of your *tax offset refunds for the income year is due and payable on the day your income tax for the income year:

  (a) is due and payable; or

  (b) would have been due and payable if you were liable to pay income tax for the income year.

Note 1: For the day income tax is due, see section 5-5 of the Income Tax Assessment Act 1997.

Note 2: For provisions about collection and recovery of this excess, see Part 4-15.

(4) If so much of the debit as is covered by subsection (3) (the excess) remains unpaid after the time by which it is due to be paid, you are liable to pay the *general interest charge on the unpaid amount for each day in the period that:

  (a) starts on the day after the excess was due to be paid; and

  (b) ends on the last day any of the following remains unpaid:

     (i) the excess;

     (ii) general interest charge on any of the excess.

48 -350 Liability to GIC on excess quarterly credits worked out using varied amounts

(1) You are liable to pay the *general interest charge under this section if:

  (a) you are participating in the *quarterly credits system for an *instalment quarter (the variation quarter) in an income year and one or more *tax offsets; and

  (b) this is the case:

     Benchmark amount ˂ 85% of your total credits

     where:

     benchmark amount means the amount worked out under section 48-355 for the variation quarter and those tax offsets.

     your total credits means the sum of your *quarterly credit amounts for the variation quarter and any earlier instalment quarters in the income year, disregarding so much of any of those amounts as:

     (i) is a positive amount not paid before the assessment day (see paragraph 48-300(1)(b)) for the income year; or

     (ii) is a negative amount with a *quarterly credit due day that is on or after that assessment day.

Note: You will not be liable for this charge if your quarterly credit amounts have never been varied above the standard amounts, as your total credits will never exceed the benchmark amount (see section 48-355).

(2) You are liable to pay the *general interest charge on the difference between your total credits and the benchmark amount.

(3) You are liable to pay the charge for each day in the period:

  (a) starting on the *quarterly credit due day for your *quarterly credit amount for the variation quarter; and

  (b) ending on the earlier of:

     (i) if you have a quarterly credit amount for one or more later *instalment quarters in the income year—the quarterly credit due day for the first of those later quarterly credit amounts; and

     (ii) the assessment day (see paragraph 48-300(1)(b)) for the income year.

Note: Subparagraph (b)(i) includes the case where you have a nil or negative quarterly credit amount for a later instalment quarter.

(4) The Commissioner must give you written notice of the *general interest charge to which you are liable under subsection (2). You must pay the charge within 14 days after you are given that notice.

Note: The Commissioner may remit the charge (see section 8AAG).

(5) If any of the *general interest charge to which you are liable under subsection (2) (the original GIC) remains unpaid at the end of the 14 days referred to in subsection (4), you are also liable to pay the general interest charge on the unpaid amount for each day in the period that:

  (a) starts on the day after those 14 days; and

  (b) ends on the last day any of the following remains unpaid:

     (i) the original GIC;

     (ii) general interest charge on any of the original GIC.

48 -355 Benchmark amount for the variation quarter

(1) The amount worked out under this section for the variation quarter and those *tax offsets is the greater of:

  (a) the sum of the standard amounts worked out under section 48-205 for:

     (i) the variation quarter; and

     (ii) any earlier *instalment quarters in the income year for which you are participating in the *quarterly credits system; and

(b) the amount applying under subsection (2).

(2) The amount applying under this subsection is as follows: