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Wednesday, 11 November 1964

Senator HENTY - The Treasurer has supplied the following answers to the honorable senator's questions - 1.I have no knowledge of the affairs of the credit union mentioned by the honorable senator but it is correct that the rates of tax payable by a credit union not qualifying as a private company arc the same as those payable by a public company.

2.   It is understood that neither the United States of America nor Canada grants a comprehensive exemption from tax of the income of credit unions. In the United States, the income of a credit union is exempt from tax only if it has no share capital and is organised and operated for mutual purposes and without profit. The Canadian income tax law contains a special provision that, upon conditions mentioned below, exempts the income of companies and associations incorporated or organised as credit unions, but the available information docs not indicate the circumstances in which incorporation or organisation as a credit union may occur. Where appropriate incorporation or organisation has occurred, exemption from income tax is conditional upon the credit union restricting its operations to one province and investing funds in prescribed ways. I am not aware of the number of credit unions that qualify for exemption from tax under the laws of the two countries.

3.   The basis upon which tax is payable by certain credit unions is the subject of appeals to the High Court of Australia. The suggestion made by the honorable senator will be considered in the light of the decisions of the High Court in these cases.

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