51AA

Fund-raising events—contributions

items 7 and 8 of the table in section 30-15

9 Subsection 995-1(1) (paragraph (b) of the definition of apportionable deductions)

Omit “item 1 or 2”, substitute “item 1, 2, 7 or 8”.

10 Subsection 995-1(1)

Insert:

fund-raising event has the meaning given by section 40-165 of the A New Tax System (Goods and Services Tax) Act 1999, as modified by the omission of subparagraph 40-165(1)(b)(i) of that Act.

Income Tax Assessment Act 1936

11 Subsection 6(1) (paragraph (aa) of the definition of apportionable deductions)

Omit “item 1 or 2”, substitute “item 1, 2, 7 or 8”.

12 Paragraph 6AD(3)(c)

Omit “item 1, 2 or 3”, substitute “item 1, 2, 3, 7 or 8”.

Part 2—Application of amendments

13 Application of amendments

The amendments made by this Schedule apply in relation to contributions made on or after 1 July 2004.

Schedule 8—Distributions to certain entities

Part 1—Division 7A amendments

Income Tax Assessment Act 1936

1 Section 109S

Omit “, 109UA and 109UB”, substitute “and 109UA”.

2 Section 109UB

Repeal the section.

3 After Subdivision E of Division 7A of Part III

Insert:

Subdivision EA—Unpaid present entitlements

109XA Payments, loans and debt forgiveness by a trustee in favour of a shareholder etc. of a private company with an unpaid present entitlement

Payments

(1) Section 109XB applies if:

(a) a trustee makes a payment to a shareholder or an associate of a shareholder of a private company (except a shareholder or associate that is a company) (the actual transaction); and

(b) the payment is a discharge of or a reduction in a present entitlement of the shareholder or associate that is wholly or partly attributable to an amount that is an unrealised gain; and

(c) the company is presently entitled to an amount from the net income of the trust estate at the time the actual transaction takes place, and the whole of that amount has not been paid to the company before the earlier of the due date for lodgment and the date of lodgment of the trustee’s return of income for the trust for the year of income of the trust in which the actual transaction takes place.

Loans

(2) Section 109XB applies if:

(a) a trustee makes a loan to a shareholder or an associate of a shareholder of a private company (except a shareholder or associate that is a company) (the actual transaction); and

(b) the company is presently entitled to an amount from the net income of the trust estate at the time the actual transaction takes place, and the whole of that amount has not been paid to the company before the earlier of the due date for lodgment and the date of lodgment of the trustee’s return of income for the trust for the year of income of the trust in which the actual transaction takes place.

Forgiven debts

(3) Section 109XB applies if:

(a) all or part of a debt owed to a trustee by a shareholder or an associate of a shareholder of a private company is forgiven (except where the shareholder or associate is a company) (the actual transaction); and

(b) the company is presently entitled to an amount from the net income of the trust estate at the time the actual transaction takes place, and the whole of that amount has not been paid to the company before the earlier of the due date for lodgment and the date of lodgment of the trustee’s return of income for the trust for the year of income of the trust in which the actual transaction takes place.

Amount involved in the actual transaction

(4) The amount involved in the actual transaction is the lesser of:

(a) the amount actually involved in the actual transaction; and

(b) the amount worked out using the formula:

where:

previous transactions means the sum of:

(a) the amounts that, because of previous applications of section 109UB (as in force before the commencement of this section) have been taken to be loans; and

(b) the amounts that, because of previous applications of this Subdivision, have been included in an entity’s assessable income;

in relation to the unpaid present entitlement.

unpaid present entitlement means:

(a) if the actual transaction is a payment—the amount of the present entitlement referred to in paragraph (1)(c) that remained unpaid on the earlier of the dates mentioned in that paragraph; and

(b) if the actual transaction is a loan—the amount of the present entitlement referred to in paragraph (2)(b) that remained unpaid on the earlier of the dates mentioned in that paragraph; and

(c) if the actual transaction is the forgiveness of a debt—the amount of the present entitlement referred to in paragraph (3)(b) that remained unpaid on the earlier of the dates mentioned in that paragraph.

The amount of the actual transaction where the entitlement is only partly attributable to an unrealised gain

(5) For the purposes of subsection (4), where the actual transaction was a payment and that payment was only partly attributable to an amount that is an unrealised gain, the amount of the actual transaction is taken to be the amount of the payment that was attributable to the amount that is the unrealised gain.

Creation of a present entitlement is not a payment

(6) The creation of a present entitlement to the capital or income of a trust estate is not, of itself, a payment for the purposes of this Subdivision.

Meaning of unrealised gain

(7) In this section:

unrealised gain, in relation to a trust estate and an actual payment, means any unrealised gain, whether of a capital or income nature, but does not include an unrealised gain to the extent that it has been or would be included in the assessable income of the trust, apart from this Division, for:

(a) a year of income before the year in which the actual payment was made; or

(b) the year of income in which the actual payment was made; or

(c) the year of income following the year in which the actual payment was made.

109XB Amounts included in assessable income

(1) An amount is included, as if it were a dividend, in the assessable income of the shareholder or associate referred to in subsection 109XA(1), (2) or (3) if:

(a) had the actual transaction been done by a private company (the notional company); and

(b) had the shareholder or associate been a shareholder of the notional company at the time the actual transaction took place;

an amount (the Division 7A amount) would have been included in the shareholder’s or associate’s assessable income because of a provision of this Division outside this Subdivision.

(2) Subject to section 109Y, the amount that is included under subsection (1) is the Division 7A amount.

Note: There are some modifications of this Division for the purposes of working out the Division 7A amount: see section 109XC.

109XC Modifications

Modifications for this Subdivision only

(1) The modifications in this section have effect for the purposes of the operation of this Subdivision.

General modifications

(2) This Division (but not this Subdivision) applies to an actual transaction done by a trustee of a trust estate with these modifications:

(a) a reference (except in section 109Y) to an amount paid to a private company has effect as a reference to an amount paid to the trustee; and

(b) a reference to a year of income of a private company has effect as a reference to the corresponding year of income of the trust estate; and

(c) a reference to the ordinary course of a private company’s business has effect as a reference to the ordinary course of the trust estate’s business.

Modified operation of section 109E

(3) A loan referred to in this Subdivision that is made during a year of income of a trust estate is taken to have been fully repaid at the end of the year for the purposes of paragraph 109E(3)(a) if it is fully repaid by the earlier of the due date for lodgment and the date of lodgment of the trustee’s return of income for the trust for that year of income of the trust.

Modified operation of section 109J

(4) Section 109J does not apply to a payment to the extent that it is a discharge of or a reduction in a present entitlement.

Modified operation of section 109N

(5) A loan referred to in this Subdivision is taken to have been made under a written agreement for the purposes of paragraph 109N(1)(a) if a written agreement is made in relation to the loan before the earlier of the due date for lodgment and the date of lodgment of the trustee’s return of income for the trust for the year of income of the trust in which the loan was made.

Modified operation of section 109R

(6) For the purposes of applying section 109R to an actual transaction:

(a) a reference in that section to obtaining a loan from a private company has effect as a reference to obtaining a loan from the trustee; and

(b) a reference in that section to property transferred to a private company has effect as a reference to property transferred to the trustee; and

(c) a reference in that section to an amount paid by a private company for a transfer of property has effect as a reference to an amount paid by the trustee for a transfer of property.

Modified operation of section 109Y

(7) Section 109Y applies to the Division 7A amount in this way:

(a) assume that the private company referred to in subsection 109XA(1), (2) or (3) had been taken to have paid a dividend to the shareholder or associate referred to in that subsection equal to the Division 7A amount; and

(b) assume that the dividend was taken to have been paid at the end of the year of income of the company in which the actual transaction took place; and

(c) a reference in that section to a private company’s distributable surplus has effect as a reference to the distributable surplus of the private company referred to in paragraph (a).

Certain provisions do not apply

(8) Subsection 109D(1A), sections 109K, 109NA and 109NB and paragraphs 109R(3)(a), (b) and (ba) do not apply to an actual transaction.

4 Paragraph 109XA(1)(c)

Repeal the paragraph, substitute:

(c) either:

(i) the company is presently entitled to an amount from the net income of the trust estate at the time the actual transaction takes place, and the whole of that amount has not been paid to the company before the earlier of the due date for lodgment and the date of lodgment of the trustee’s return of income for the trust for the year of income of the trust in which the actual transaction takes place; or

(ii) the company becomes presently entitled to an amount from the net income of the trust estate after the actual transaction takes place, but before the earlier of the due date for lodgment and the date of lodgment of the trustee’s return of income for the trust for the year of income of the trust in which the actual transaction takes place, and the whole of the amount has not been paid to the company before the earlier of those dates.

5 Paragraph 109XA(2)(b)

Repeal the paragraph, substitute:

(b) either:

(i) the company is presently entitled to an amount from the net income of the trust estate at the time the actual transaction takes place, and the whole of that amount has not been paid to the company before the earlier of the due date for lodgment and the date of lodgment of the trustee’s return of income for the trust for the year of income of the trust in which the actual transaction takes place; or

(ii) the company becomes presently entitled to an amount from the net income of the trust estate after the actual transaction takes place, but before the earlier of the due date for lodgment and the date of lodgment of the trustee’s return of income for the trust for the year of income of the trust in which the actual transaction takes place, and the whole of the amount has not been paid to the company before the earlier of those dates.

6 Paragraph 109XA(3)(b)

Repeal the paragraph, substitute:

(b) either:

(i) the company is presently entitled to an amount from the net income of the trust estate at the time the actual transaction takes place, and the whole of that amount has not been paid to the company before the earlier of the due date for lodgment and the date of lodgment of the trustee’s return of income for the trust for the year of income of the trust in which the actual transaction takes place; or

(ii) the company becomes presently entitled to an amount from the net income of the trust estate after the actual transaction takes place, but before the earlier of the due date for lodgment and the date of lodgment of the trustee’s return of income for the trust for the year of income of the trust in which the actual transaction takes place, and the whole of the amount has not been paid to the company before the earlier of those dates.

7 Subsection 109XA(4) (definition of unpaid present entitlement)

Repeal the definition, substitute:

unpaid present entitlement means:

(a) in a case mentioned in subparagraph (1)(c)(i), (2)(b)(i) or (3)(b)(i)—the amount of the present entitlement that remained unpaid on the earlier of the dates mentioned in that subparagraph; and

(b) in a case mentioned in subparagraph (1)(c)(ii), (2)(b)(ii) or (3)(b)(ii)—the amount of the present entitlement that remained unpaid on the earlier of the dates mentioned in that subparagraph.

Part 2—Application

8 Application of items 1, 2 and 3

The amendments made by items 1, 2 and 3 of this Schedule apply to payments or loans made, or debts forgiven, on or after 12 December 2002.

9 Application of items 4, 5, 6 and 7

The amendments made by items 4, 5, 6 and 7 of this Schedule apply to payments or loans made, or debts forgiven, on or after the day on which the Bill for this Act was introduced into the House of Representatives.

Schedule 9—Deductions for dividends on-paid to non-resident owners

Income Tax Assessment Act 1936

1 Subsection 46F(1) (definition of group company)

After “this Act”, insert “as in force immediately before 1 July 2002”.

2 Paragraph 46FA(1)(c)

After “but for”, insert “subsection 46AB(1) or 46AC(2) or”.

3 Subsection 46FA(5)

Repeal the subsection, substitute:

Unfranked amount of flow-on dividend unfrankable

(5) Part 3-6 of the Income Tax Assessment Act 1997 (the imputation system) applies to the unfranked amount of the flow-on dividend as if it were an unfrankable distribution within the meaning of section 202-45 of that Act if a deduction is allowed to the resident company in relation to the flow-on dividend.

4 Subsection 46FA(11) (definition of fully-franked dividend)

Repeal the definition, substitute:

fully-franked dividend means a dividend whose franking percentage (within the meaning of section 203-35 of the Income Tax Assessment Act 1997) is 100%.

5 Subsection 46FA(11) (definition of group company)

After “160AFE”, insert “as in force immediately before 1 July 2002”.

6 Subsection 46FA(11) (definition of unfranked amount)

Repeal the definition, substitute:

unfranked amount of a dividend (including an unfrankable distribution within the meaning of section 202-45 of the Income Tax Assessment Act 1997) means the amount of the dividend less the franked part.

7 Subsection 46FB(6) (definition of group company)

After “160AFE”, insert “as in force immediately before 1 July 2002”.

8 Subsection 46FB(6) (definition of unfranked amount)

Repeal the definition, substitute:

unfranked amount of a dividend (including an unfrankable distribution within the meaning of section 202-45 of the Income Tax Assessment Act 1997) means the amount of the dividend less the franked part.

9 Application

(1) Subject to subitem (2), the amendment made by item 2 of this Schedule applies to dividends paid after 30 June 2003.

(2) For a taxpayer to which section 46AC of the Income Tax Assessment Act 1936 applies, the amendment made by item 2 of this Schedule applies to dividends paid on or after the consolidation day referred to in that section.

(3) The amendments made by items 1, 3, 4, 5, 6, 7 and 8 of this Schedule apply to dividends paid on or after 1 July 2002.

Schedule 10—Endorsement of charities etc.

Part 1—Amendments

A New Tax System (Australian Business Number) Act 1999

1 Subsection 25(2) (note)

Omit “Note”, substitute “Note 1”.

2 At the end of subsection 25(2) (after the note)

Add:

Note 2: Section 426-65 in Schedule 1 to the Taxation Administration Act 1953 also requires the Registrar to make entries in the Australian Business Register about entities that are endorsed in the ways mentioned in that section.

3 After paragraph 26(3)(g)

Insert:

(ga) any statement required to be entered in the ^*Australian Business Register in relation to the entity under section 426-65 in Schedule 1 to the Taxation Administration Act 1953;

A New Tax System (Goods and Services Tax) Act 1999

4 After subsection 29-40(2)

Insert:

(2A) Subsection (2) does not apply in relation to a charitable institution or a trustee of a charitable fund unless the institution or trustee is an ^*endorsed charitable institution or an ^*endorsed trustee of a charitable fund.

Example: Subsection (2) does not apply in relation to an entity that is both a charitable institution and a gift-deductible entity unless the entity is an endorsed charitable institution.

5 Subsection 29-50(5)

Omit “Paragraph (1)(a)”, substitute “Subject to subsection (6), paragraph (1)(a)”.

6 At the end of section 29-50

Add:

(6) Subsection (5) does not apply in relation to a charitable institution or a trustee of a charitable fund unless the institution or trustee is an ^*endorsed charitable institution or an ^*endorsed trustee of a charitable fund.

Example: Subsection (5) does not apply in relation to an entity that is both a charitable institution and a gift-deductible entity unless the entity is an endorsed charitable institution.

7 At the end of section 38-250

Add:

(3) Subsections (1) and (2) do not apply in relation to a charitable institution or a trustee of a charitable fund unless the institution or trustee is an ^*endorsed charitable institution or an ^*endorsed trustee of a charitable fund.

Example: Subsections (1) and (2) do not apply in relation to an entity that is both a charitable institution and a gift-deductible entity unless the entity is an endorsed charitable institution.

8 At the end of section 38-255

Add:

(2) Subsection (1) does not apply in relation to a charitable institution or a trustee of a charitable fund unless the institution or trustee is an ^*endorsed charitable institution or an ^*endorsed trustee of a charitable fund.

Example: Subsection (1) does not apply in relation to an entity that is both a charitable institution and a gift-deductible entity unless the entity is an endorsed charitable institution.

9 At the end of section 38-270

Add:

(2) Subsection (1) does not apply in relation to a charitable institution or a trustee of a charitable fund unless the institution or trustee is an ^*endorsed charitable institution or an ^*endorsed trustee of a charitable fund.

Example: Subsection (1) does not apply in relation to an entity that is both a charitable institution and a gift-deductible entity unless the entity is an endorsed charitable institution.

10 At the end of section 40-160

Add:

(2) Subsection (1) does not apply in relation to a charitable institution or a trustee of a charitable fund unless the institution or trustee is an ^*endorsed charitable institution or an ^*endorsed trustee of a charitable fund.

Example: Subsection (1) does not apply in relation to an entity that is both a charitable institution and a gift-deductible entity unless the entity is an endorsed charitable institution.

11 After subsection 48-15(1)

Insert:

(1AA) Subparagraph (1)(e)(iii) does not apply in relation to a charitable institution or a trustee of a charitable fund unless the institution or trustee is an ^*endorsed charitable institution or an ^*endorsed trustee of a charitable fund.

Example: Subparagraph (1)(e)(iii) does not apply in relation to an entity that is both a charitable institution and a gift-deductible entity unless the entity is an endorsed charitable institution.

12 At the end of section 63-5

Add:

(3) Paragraph (2)(a) does not apply in relation to a charitable institution or a trustee of a charitable fund unless the institution or trustee is an ^*endorsed charitable institution or an ^*endorsed trustee of a charitable fund.

Example: Paragraph (2)(a) does not apply in relation to an entity that is both a charitable institution and a gift-deductible entity unless the entity is an endorsed charitable institution.

13 At the end of section 111-18

Add:

(2) Subsection (1) does not apply in relation to a charitable institution or a trustee of a charitable fund unless the institution or trustee is an ^*endorsed charitable institution or an ^*endorsed trustee of a charitable fund.

Example: Subsection (1) does not apply in relation to an entity that is both a charitable institution and a gift-deductible entity unless the entity is an endorsed charitable institution.

14 At the end of section 129-45

Add:

(2) Subsection (1) does not apply in relation to a charitable institution or a trustee of a charitable fund unless the institution or trustee is an ^*endorsed charitable institution or an ^*endorsed trustee of a charitable fund.

Example: Subsection (1) does not apply in relation to an entity that is both a charitable institution and a gift-deductible entity unless the entity is an endorsed charitable institution.

15 Before Division 177

Insert:

Division 176—Endorsement of charitable institutions etc.

176-1 Endorsement by Commissioner as charitable institution

(1) The Commissioner must endorse an entity as a charitable institution if:

(a) the entity is entitled to be endorsed as a charitable institution (see subsection (2)); and

(b) the entity has applied for that endorsement in accordance with Division 426 in Schedule 1 to the Taxation Administration Act 1953.

(2) An entity is entitled to be endorsed as a charitable institution if the entity:

(a) is a charitable institution; and

(b) has an ^*ABN.

176-5 Endorsement by Commissioner as trustee of a charitable fund

(1) The Commissioner must endorse an entity as a trustee of a charitable fund if:

(a) the entity is entitled to be endorsed as a trustee of a charitable fund (see subsection (2)); and

(b) the entity has applied for that endorsement in accordance with Division 426 in Schedule 1 to the Taxation Administration Act 1953.

(2) An entity is entitled to be endorsed as a trustee of a charitable fund if the entity:

(a) is a trustee of a charitable fund; and

(b) has an ^*ABN.

16 Section 195-1

Insert:

endorsed charitable institution means a charitable institution that is endorsed under subsection 176-1(1).

17 Section 195-1

Insert:

endorsed trustee of a charitable fund means a trustee of a charitable fund who is endorsed under subsection 176-5(1).

Fringe Benefits Tax Assessment Act 1986

18 Subsection 57A(1)

After “public benevolent institution”, insert “endorsed under subsection 123C(1) or (5)”.

19 Subsection 57A(5)

Repeal the subsection, substitute:

(5) A benefit provided in respect of the employment of an employee is an exempt benefit if:

(a) the employer of the employee is a health promotion charity; and

(b) the health promotion charity is endorsed under subsection 123D(1).

Note: The heading to section 57A is altered by inserting “, health promotion charities” after “public benevolent institutions”.

20 Subsection 65J(1)

Omit “is not a charitable institution described in subsection 57A(5)”, substitute “is not a health promotion charity”.

21 Paragraph 65J(1)(b)

Repeal the paragraph, substitute:

(b) a scientific or public educational institution (other than an institution of the Commonwealth, a State or a Territory);

(baa) a charitable institution that is endorsed under subsection 123E(1);

22 After subsection 65J(1)

Insert:

(1A) Despite subsection (1), if the employer is a charitable institution at any time during the year of tax, the employer is not a rebatable employer for the year of tax unless the employer is endorsed under subsection 123E(1) at that time.

23 After Part X

Insert:

Part XA—Endorsement of charitable institutions etc.

123C Endorsement by Commissioner as public benevolent institution

Endorsement of an entity that is a public benevolent institution

(1) The Commissioner must endorse an entity as a public benevolent institution if:

(a) the entity is entitled to be endorsed as a public benevolent institution (see subsection (2)); and

(b) the entity has applied for that endorsement in accordance with Division 426 in Schedule 1 to the Taxation Administration Act 1953.

(2) An entity is entitled to be endorsed as a public benevolent institution if the entity:

(a) is a public benevolent institution; and

(b) has an ABN; and

(c) is not an employer in relation to which step 2 of the method statement in subsection 5B(1E) applies.

Endorsement of an entity for the operation of a public benevolent institution

(3) The Commissioner must endorse an entity for the operation of a public benevolent institution if:

(a) the entity is entitled to be endorsed for the operation of a public benevolent institution (see subsection (4)); and

(b) the entity has applied for that endorsement in accordance with Division 426 in Schedule 1 to the Taxation Administration Act 1953.

(4) An entity is entitled to be endorsed for the operation of a public benevolent institution if:

(a) the entity:

(i) includes the public benevolent institution; and

(ii) has an ABN; and

(b) the public benevolent institution is an employer; and

(c) the public benevolent institution is not an employer in relation to which step 2 of the method statement in subsection 5B(1E) applies.

(5) If an entity is endorsed under subsection (3) for the operation of a public benevolent institution, the public benevolent institution is taken to be endorsed under this subsection as a public benevolent institution.

123D Endorsement by Commissioner as health promotion charity

(1) The Commissioner must endorse an entity as a health promotion charity if:

(a) the entity is entitled to be endorsed as a health promotion charity (see subsection (2)); and

(b) the entity has applied for that endorsement in accordance with Division 426 in Schedule 1 to the Taxation Administration Act 1953.

(2) An entity is entitled to be endorsed as a health promotion charity if the entity:

(a) is a health promotion charity; and

(b) has an ABN; and

(c) is not an employer in relation to which step 2 of the method statement in subsection 5B(1E) applies.

123E Endorsement by Commissioner as charitable institution (other than public benevolent institution or health promotion charity)

(1) The Commissioner must endorse an entity as a charitable institution covered by paragraph 65J(1)(baa) if:

(a) the entity is entitled to be endorsed as a charitable institution covered by paragraph 65J(1)(baa) (see subsections (2) and (3)); and

(b) the entity has applied for that endorsement in accordance with Division 426 in Schedule 1 to the Taxation Administration Act 1953.

(2) An entity is entitled to be endorsed as a charitable institution covered by paragraph 65J(1)(baa) if the entity:

(a) is a charitable institution; and

(b) has an ABN.

24 Section 135M

Omit:

Special rules apply for working out the employee’s reportable fringe benefits amount in respect of the employee’s employment if the benefits provided in respect of the employment include exempt benefits under section 57A or 58 (about employment with public benevolent institutions and bodies providing care for sick, elderly or disadvantaged persons) (see section 135Q).

substitute:

Special rules apply for working out the employee’s reportable fringe benefits amount in respect of the employee’s employment if the benefits provided in respect of the employment include exempt benefits under section 57A or 58 (about employment with public benevolent institutions, certain hospitals, health promotion charities and bodies providing care for sick, elderly or disadvantaged persons) (see section 135Q).

25 Subsection 136(1)

Insert:

ABN has the meaning given by the A New Tax System (Australian Business Number) Act 1999.

26 Subsection 136(1)

Insert:

entity has the meaning given by section 960-100 of the Income Tax Assessment Act 1997.

27 Subsection 136(1)

Insert:

health promotion charity means a charitable institution whose principal activity is to promote the prevention or the control of diseases in human beings.

Income Tax Assessment Act 1997

28 Section 30-120

Omit “If an entity applies for it”, substitute “If an entity applies for endorsement in accordance with Division 426 in Schedule 1 to the Taxation Administration Act 1953”.

29 At the end of section 30-120

Add:

Note: For procedural rules relating to endorsement, see Division 426 in Schedule 1 to the Taxation Administration Act 1953.

30 Subsection 30-125(7) (note 2)

Repeal the note, substitute:

Note 2: Section 426-55 in Schedule 1 to the Taxation Administration Act 1953 deals with revocation of endorsement.

31 At the end of section 30-125

Add:

[The next section is section 30-180.]

32 Sections 30-130 to 30-175

Repeal the sections.

33 Subsections 30-180(3) and (4)

Repeal the subsections.

34 Section 30-228 (note)

Omit “section 30-170”, substitute “section 426-55 in Schedule 1 to the Taxation Administration Act 1953”.

35 Subsection 50-52(2)

Repeal the subsection.

36 Subsection 50-52(3) (note)

Omit “(or is prescribed for the purposes of paragraph 50-50(c) or (d))”.

37 Paragraph 50-105(b)

Repeal the paragraph, substitute:

(b) has applied for that endorsement in accordance with Division 426 in Schedule 1 to the Taxation Administration Act 1953.

38 At the end of section 50-105

Add:

Note: For procedural rules relating to endorsement, see Division 426 in Schedule 1 to the Taxation Administration Act 1953.

39 Sections 50-115 to 50-160

Repeal the sections.

Taxation Administration Act 1953

40 Section 425-30 in Schedule 1 (link note)

Repeal the link note.

41 After Part 5-30 in Schedule 1

Insert:

Part 5-35—Registration and similar processes for various taxes

Division 426—Process of endorsing charities and other entities

Table of Subdivisions

Guide to Division 426

426-A Application of Subdivision 426-B to various kinds of endorsement

426-B Process of endorsement etc.

426-C Entries on Australian Business Register

Guide to Division 426

426-1 What this Division is about

This Division sets out procedural rules relating to endorsement of charities and other entities (the conditions for entitlement to endorsement are set out in the A New Tax System (Goods and Services Tax) Act 1999, the Fringe Benefits Tax Assessment Act 1986, and the Income Tax Assessment Act 1997). These rules cover matters such as application for and revocation of endorsement, and entry of the details of endorsement on the Australian Business Register.

Subdivision 426-A—Application of Subdivision 426-B to various kinds of endorsement

Table of sections

426-5 Application of Subdivision 426-B to various kinds of endorsement

426-10 How Subdivision 426-B applies to government entities in relation to endorsement under section 30-120 of the Income Tax Assessment Act 1997

426-5 Application of Subdivision 426-B to various kinds of endorsement

Subdivision 426-B applies separately in relation to each of these kinds of endorsement:

(a) endorsement of an entity as a charitable institution under subsection 176-1(1) of the A New Tax System (Goods and Services Tax) Act 1999;

(b) endorsement of an entity as a trustee of a charitable fund under subsection 176-5(1) of the A New Tax System (Goods and Services Tax) Act 1999;

(c) endorsement of an entity as a public benevolent institution under subsection 123C(1) of the Fringe Benefits Tax Assessment Act 1986;

(d) endorsement of an entity for the operation of a public benevolent institution under subsection 123C(3) of the Fringe Benefits Tax Assessment Act 1986;

(e) endorsement of an entity as a health promotion charity under subsection 123D(1) of the Fringe Benefits Tax Assessment Act 1986;

(f) endorsement of an entity under subsection 123E(1) of the Fringe Benefits Tax Assessment Act 1986 as a charitable institution covered by paragraph 65J(1)(baa) of that Act;

(g) endorsement of an entity as a ^*deductible gift recipient, or as a deductible gift recipient for the operation of a fund, authority or institution, under section 30-120 of the Income Tax Assessment Act 1997;

(h) endorsement of an entity as exempt from income tax under section 50-105 of the Income Tax Assessment Act 1997.

426-10 How Subdivision 426-B applies to government entities in relation to endorsement under section 30-120 of the Income Tax Assessment Act 1997

(1) This section applies in relation to endorsement under section 30-120 of the Income Tax Assessment Act 1997.

(2) Subdivision 426-B applies in relation to a ^*government entity in the same way as it applies in relation to an entity.

(3) If, apart from this subsection, section 426-40 or 426-45 (as applied by this section) would impose an obligation on a ^*government entity:

(a) that is an unincorporated association or body; and

(b) for whose management a single person is responsible to persons or bodies outside the government entity;

the obligation is imposed on that person.

(4) Subsection (3) has effect despite:

(a) subsection (2); and

(b) subsection 426-50(2) as it applies because of this section.

Subdivision 426-B—Process of endorsement etc.

Table of sections

426-15 Applying for endorsement

426-20 Dealing with an application for endorsement

426-25 Notifying outcome of application for endorsement

426-30 Date of effect of endorsement

426-35 Review of refusal of endorsement

426-40 Checking entitlement to endorsement

426-45 Telling Commissioner of loss of entitlement to endorsement

426-50 Partnerships and unincorporated bodies

426-55 Revoking endorsement

426-60 Review of revocation of endorsement

426-15 Applying for endorsement

(1) An entity may apply to the Commissioner for endorsement.

(2) The application:

(a) must be in a form approved by the Commissioner; and

(b) may be ^*lodged electronically; and

(c) must be signed for the entity, or include the entity’s ^*electronic signature if the application is lodged electronically; and

(d) must be lodged at, or posted to, an office or facility designated by the Commissioner as a receiving centre for applications of that kind.

Note: The Commissioner could approve a form that is part of an application form for an ABN.

(3) Section 426-5 does not prevent the Commissioner from approving a single form to be used by an entity to make applications for 2 or more kinds of endorsement.

426-20 Dealing with an application for endorsement

Requiring further information or documents

(1) The Commissioner may require an applicant to give the Commissioner specified information, or a specified document, that the Commissioner needs in order to decide whether the applicant is entitled to endorsement.

Treating application as being refused

(2) After the time worked out under subsection (3), the applicant may give the Commissioner written notice that the applicant wishes to treat the application as having been refused, if the Commissioner has not given the applicant before that time written notice that the Commissioner endorses or refuses to endorse the applicant.

Note: Section 426-25 requires the Commissioner to give the applicant written notice if the Commissioner endorses or refuses to endorse the applicant.

(3) The time is the end of the 60th day after the application was made. However, if before that time the Commissioner requires the applicant under subsection (1) to give information or a document, the time is the later of the following (or either of them if they are the same):

(a) the end of the 28th day after the last day on which the applicant gives the Commissioner information or a document he or she has required;

(b) the end of the 60th day after the application was made.

(4) If the applicant gives notice under subsection (2), section 426-35 operates as if the Commissioner had refused the application on the day on which the notice is given.

Note: Section 426-35 lets the applicant object against refusal of an application in the manner set out in Part IVC of this Act. That Part provides for review of the refusal objected against.

(5) The notice given by the applicant:

(a) may be ^*lodged electronically; and

(b) must be signed for the applicant, or include the applicant’s ^*electronic signature if the application is ^*lodged electronically.

426-25 Notifying outcome of application for endorsement

(1) The Commissioner must give the applicant written notice if:

(a) the Commissioner endorses the applicant; or

(b) the Commissioner refuses to endorse the applicant.

(2) The Commissioner may give the notice by way of electronic transmission. This does not limit the ways in which the Commissioner may give the notice.

426-30 Date of effect of endorsement

(1) The endorsement has effect from a date specified by the Commissioner.

(2) The date specified may be any date (including a date before the application for endorsement was made and a date before the applicant had an ^*ABN).

426-35 Review of refusal of endorsement

If the applicant is dissatisfied with the Commissioner’s refusal to endorse the applicant in accordance with the application, the applicant may object against the refusal in the manner set out in Part IVC of this Act.

Note: That Part provides for review of the refusal objected against.

426-40 Checking entitlement to endorsement

(1) The Commissioner may require an entity that is endorsed to give the Commissioner information or a document that is relevant to the entity’s entitlement to endorsement. The entity must comply with the requirement.

Note 1: The conditions for an entity to be entitled to be endorsed are set out in:

(a) subsections 176-1(2) and 176-5(2) of the A New Tax System (Goods and Services Tax) Act 1999; and

(b) subsections 123C(2) and (4), 123D(2) and 123E(2) of the Fringe Benefits Tax Assessment Act 1986; and

(c) sections 30-120 and 50-105 of the Income Tax Assessment Act 1997.

Note 2: Failure to comply with this subsection is an offence against section 8C. Also, the Commissioner may revoke the endorsement of the entity under section 426-55 if it fails to comply with this subsection.

Note 3: Section 426-50 modifies the way this subsection operates in relation to partnerships and unincorporated bodies.

(2) The requirement:

(a) is to be made by notice in writing to the entity; and

(b) may ask the entity to give the information in writing; and

(c) must specify:

(i) the information or document the entity is to give; and

(ii) the period within which the entity is to give the information or document.

The period specified under subparagraph (c)(ii) must end at least 28 days after the notice is given.

(3) The Commissioner may give the notice by way of electronic transmission. This does not limit the ways in which the Commissioner may give the notice.

(4) If the requirement is for the entity to give information in writing, the document setting out the information:

(a) must be given to the Commissioner; and

(b) may be ^*lodged electronically; and

(c) must be signed for the entity, or include the entity’s ^*electronic signature if the document is lodged electronically.

426-45 Telling Commissioner of loss of entitlement to endorsement

(1) Before, or as soon as practicable after, an entity that is endorsed ceases to be entitled to be endorsed, the entity must give the Commissioner written notice of the cessation.

Note 1: Failure to comply with this subsection is an offence against section 8C.

Note 2: Section 426-50 modifies the way this subsection operates in relation to partnerships and unincorporated bodies.

(2) The notice:

(a) may be ^*lodged electronically; and

(b) must be signed for the entity, or include the entity’s ^*electronic signature if the document is lodged electronically.

(3) Subsection (1) does not apply to an entitlement to endorsement ceasing because the entity ceases to have an ^*ABN.

426-50 Partnerships and unincorporated bodies

Application to partnerships

(1) If, apart from this subsection, section 426-40 or 426-45 would impose an obligation on a partnership, the obligation is imposed on each partner, but may be discharged by any of the partners.

Application to unincorporated bodies

(2) If, apart from this subsection, section 426-40 or 426-45 would impose an obligation on an unincorporated association or body, the obligation is imposed on each member of the committee of management of the association or body, but may be discharged by any of the members of the committee.

Defences for partners and members of committee of management

(3) In a prosecution of a person for an offence against section 8C of this Act because of subsection (1) or (2), it is a defence if the person proves that the person:

(a) did not aid, abet, counsel or procure the act or omission because of which the offence is taken to have been committed; and

(b) was not in any way, by act or omission, directly or indirectly, knowingly concerned in, or party to, the act or omission because of which the offence is taken to have been committed.

426-55 Revoking endorsement

(1) The Commissioner may revoke the endorsement of an entity if:

(a) the entity is not entitled to be endorsed; or

(b) the Commissioner has required the entity under section 426-40 to provide information or a document that is relevant to its entitlement to endorsement and the entity has not provided the required information or document within the time specified in the requirement; or

(c) in the case of an entity endorsed under section 30-120 of the Income Tax Assessment Act 1997—the entity has contravened Subdivision 30-CA of that Act (which requires the entity to ensure that certain things are stated in any receipts it issues for certain gifts).

Note: The conditions for an entity to be entitled to be endorsed are set out in:

(a) subsections 176-1(2) and 176-5(2) of the A New Tax System (Goods and Services Tax) Act 1999; and

(b) subsections 123C(2) and (4), 123D(2) and 123E(2) of the Fringe Benefits Tax Assessment Act 1986; and

(c) sections 30-120 and 50-105 of the Income Tax Assessment Act 1997.

(2) The revocation has effect from a day specified by the Commissioner (which may be a day before the Commissioner decided to revoke the endorsement).

(3) However, if the Commissioner revokes the endorsement because the entity is not entitled to it, the Commissioner must not specify a day before the day on which the entity first ceased to be entitled.

(4) The Commissioner must give the entity written notice if the Commissioner revokes its endorsement.

(5) The Commissioner may give the notice by way of electronic transmission. This does not limit the ways in which the Commissioner may give the notice.

426-60 Review of revocation of endorsement

If the entity is dissatisfied with the revocation of its endorsement, the entity may object against the revocation in the manner set out in Part IVC of this Act.

Note: That Part provides for review of the revocation objected against.

Subdivision 426-C—Entries on Australian Business Register

Table of sections

426-65 Entries on Australian Business Register

426-65 Entries on Australian Business Register

(1) If an entity that is endorsed in any of these ways:

(a) as a charitable institution under subsection 176-1(1) of the A New Tax System (Goods and Services Tax) Act 1999;

(b) as a trustee of a charitable fund under subsection 176-5(1) of the A New Tax System (Goods and Services Tax) Act 1999;

(c) as a public benevolent institution under subsection 123C(1) of the Fringe Benefits Tax Assessment Act 1986;

(d) for the operation of a public benevolent institution under subsection 123C(3) of the Fringe Benefits Tax Assessment Act 1986;

(e) as a health promotion charity under subsection 123D(1) of the Fringe Benefits Tax Assessment Act 1986;

(f) as a charitable institution covered by paragraph 65J(1)(baa) of the Fringe Benefits Tax Assessment Act 1986 under subsection 123E(1) of that Act;

(g) as exempt from income tax under section 50-105 of the Income Tax Assessment Act 1997;

the ^*Australian Business Registrar must enter in the ^*Australian Business Register a statement that the entity is so endorsed for a specified period.

Note 1: An entry (or lack of entry) of a statement required by this section does not affect concessions available to the entity under the Act for the purposes of which it is endorsed.

Note 2: For entities and government entities that are endorsed under section 30-120 of the Income Tax Assessment Act 1997, see section 30-229 of that Act.

(2) The ^*Australian Business Registrar may remove the statement from the ^*Australian Business Register after the end of the period.

(3) The ^*Australian Business Registrar must take reasonable steps to ensure that a statement appearing in the ^*Australian Business Register under this section is true. For this purpose, the Registrar may:

(a) change the statement; or

(b) remove the statement from the Register if the statement is not true; or

(c) remove the statement from the Register and enter another statement in the Register under this section.

(4) Making, changing or removing an entry in the ^*Australian Business Register as required or permitted by this section does not contravene section 16 of the Income Tax Assessment Act 1936 (Officers to observe secrecy).

[The next Division is Division 444.]

Part 2—Application and transitional provisions

42 Application of GST amendments

The amendments of the A New Tax System (Goods and Services Tax) Act 1999 made by this Schedule apply in relation to net amounts for tax periods starting on or after 1 July 2004.

43 Application of FBT amendments

The amendments of the Fringe Benefits Tax Assessment Act 1986 made by this Schedule apply in relation to benefits provided on or after 1 July 2004.

44 Transitional—GST and FBT endorsements

(1) This item applies in relation to an entity if:

(a) immediately before 1 July 2004, the entity was endorsed under section 30-120 or section 50-105 of the Income Tax Assessment Act 1997; and

(b) the entity failed to notify the Commissioner in writing before 1 July 2004 that it chose not to have this item apply to it.

(2) The entity is taken to have made an application to the Commissioner under section 426-15 in Schedule 1 to the Taxation Administration Act 1953 for whichever of these kinds of endorsement is most appropriate for the entity:

(a) endorsement as a charitable institution under subsection 176-1(1) of the A New Tax System (Goods and Services Tax) Act 1999;

(b) endorsement as a trustee of a charitable fund under subsection 176-5(1) of the A New Tax System (Goods and Services Tax) Act 1999.

(3) The entity is taken to have made an application to the Commissioner under section 426-15 in Schedule 1 to the Taxation Administration Act 1953 for whichever of these kinds of endorsement is most appropriate for the entity:

(a) endorsement as a public benevolent institution under subsection 123C(1) of the Fringe Benefits Tax Assessment Act 1986;

(b) endorsement for the operation of a public benevolent institution under subsection 123C(3) of the Fringe Benefits Tax Assessment Act 1986;

(c) endorsement as a health promotion charity under subsection 123D(1) of the Fringe Benefits Tax Assessment Act 1986;

(d) endorsement under subsection 123E(1) of the Fringe Benefits Tax Assessment Act 1986 as a charitable institution covered by paragraph 65J(1)(baa) of that Act.

45 Transitional—acts or things done before commencement under repealed endorsement provisions

(1) In this item:

repealed provision means any of these provisions (as in force immediately before the commencement of this item):

(a) sections 30-30 to 30-175 of the Income Tax Assessment Act 1997;

(b) sections 50-115 to 50-160 of that Act.

(2) This item applies to an act or thing if:

(a) the act or thing was done before the commencement of this item; and

(b) the act or thing was done under, or for the purposes of, a repealed provision.

(3) The act or thing has effect, after the commencement of this item, as if it had been done under, or for the purposes of, the corresponding provision of the Taxation Administration Act 1953 (as in force on and after the commencement of this item).

Schedule 11—Specific gift recipients

Income Tax Assessment Act 1997

1 Subsection 30-25(2) (at the end of the table)

Add: