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Title

TAXATION LAWS AMENDMENT BILL (NO. 3) 2002

Consideration in Detail

Database

House Hansard

Date

26-09-2002

Source

House of Reps

Parl No.

40

Electorate

Fisher

Interjector

 

Main Committee/Federation Chamber

 

Page

7352

Party

LP

Presenter

 

Status

Final

Question No.

 

Questioner

 

Responder

 

Speaker

Slipper, Peter, MP

Stage

Consideration in Detail

Type

 

Context

Miscellaneous

System Id

chamber/hansardr/2002-09-26/0052


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Thursday, 26 September 2002
Page: 7352


Mr SLIPPER (Parliamentary Secretary to the Minister for Finance and Administration) (12:13 PM) —by leave—I present a supplementary explanatory memorandum and correction to the explanatory memorandum to this bill and move government amendments (1) to (17) together.

(1) Schedule 1, item 11, page 9 (lines 18 to 26), omit subsection (1), substitute:

(1) A supply is not a *taxable supply if the supply is:

(a) the transfer of a *tax loss in accordance with Subdivision 170-A of the *ITAA 1997; or

(b) the transfer of a *net capital loss in accordance with Subdivision 170-B of the ITAA 1997.

(2) Schedule 1, item 11, page 10 (lines 4 to 14), omit subsection (1), substitute:

(1) A supply is not a *taxable supply if:

(a) the supply is the transfer of an initial excess credit, or an opening excess credit balance, referred to in paragraph 160AFE(1D)(c) of the *ITAA 1936; and

(b) the transfer is in accordance with section 160AFE of the ITAA 1936.

(3) Schedule 1, item 12, page 10 (lines 17 to 20), omit the item.

(4) Schedule 1, item 13, page 10 (lines 21 to 24), omit the item.

(5) Schedule 1, item 17, page 11 (lines 5 to 8), omit the item.

(6) Schedule 1, item 18, page 11 (lines 9 to 12), omit the item.

(7) Schedule 1, item 19, page 11 (line 16), omit “1 December 2001”, substitute “1 July 2000”.

(8) Schedule 2, item 9, page 16 (line 8), after “applied,”, insert “to assessments”.

(9) Schedule 2, item 9, page 16 (line 30), after “applied,”, insert “to assessments”.

(10) Schedule 2, item 9, page 18 (line 25), after “income”, insert “(the current year of income)”.

(11) Schedule 2, item 9, page 19 (lines 16 and 17), omit “the year of income”, substitute “the current year of income or an earlier year of income”.

(12) Schedule 2, item 9, page 19 (line 26), omit “the year of income”, substitute “the current year of income or an earlier year of income”.

(13) Schedule 2, item 9, page 20 (line 2), after “applies”, insert “to assessments”.

(14) Schedule 2, item 9, page 21 (line 26), omit “This Subdivision applies, and is taken to have applied,”, substitute “This Division applies, and is taken to have applied, to assessments”.

(15) Schedule 2, page 21 (after line 28), before item 10, insert:

9A Section 10-5 (after table item headed “franked dividends”)

Insert:

General insurance

gross premiums

321-45 of Schedule 2J

reduction in value of outstanding claims liability

321-10 and 323-5 of Schedule 2J

reduction in value of unearned premium reserve

321-50 of Schedule 2J

(16) Schedule 2, page 21, after proposed item 9A, insert:

9B Section 12-5 (after table item headed “fringe benefits”)

Insert:

General insurance

claims paid

321-25 and 323-20 of Schedule 2 J

increase in value of outstanding claims liability

321-15 and 323-10 of Schedule 2J

increase in value of unearned premium reserve

321-55 of Schedule 2J

(17) Schedule 2, item 10, page 22 (lines 1 and 2), omit “that is authorised under the Insurance Act 1973 to carry on”, substitute “that carries on”.

Amendments (1) to (7) amend the measure relating to income related transactions. The bill currently applies to transfers of certain income tax amounts made by a member of a wholly owned group to another member of the wholly owned group. However, in some circumstances a transfer may occur in relation to the 2001-02 income year between companies that satisfy the transfer requirements within the income tax legislation but are no longer members of the same wholly owned group at the time the transfer agreement is entered into and the supply occurs. In these situations, the transfer would inadvertently be subject to GST. The amendments will ensure that entities are able to transfer tax losses, net capital losses and excess foreign tax credits without attracting GST, even where they are no longer members of the same wholly owned group at the time of the transfer. Further, following representations from industry, the bill is being amended to apply the measure from 1 July 2000.

Amendments (8) to (17) of schedule 2 to the bill remove concerns that the bill does not appropriately spread net premium income if a single up-front premium is paid in respect of a general insurance policy that covers a period of risk extending over several years. This situation typically arises, for example, in the case of mortgage insurance policies and credit insurance policies. The amendments ensure that, in these circumstances, net premium income is effectively spread over the relevant period of risk. The amendments also ensure that the measures in schedule 2 to the bill apply to all companies that carry on general insurance activities. I commend the amendments to the House.

Question agreed to.

Bill, as amended, agreed to.