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A New Tax System (Tax Administration) Bill (No. 1) 2000
Schedule 2 Fringe benefits tax instalments

   

Fringe Benefits Tax Assessment Act 1986

1  Section 105

Repeal the section, substitute:

105   Credit for instalments payable

             (1)  An employer is entitled to a credit when the Commissioner:

                     (a)  makes an assessment of the tax payable by the employer for a year of tax; or

                     (b)  determines that no tax is payable.

Note:          The employer’s first return for the year of tax is treated as an assessment: see section 72.

             (2)  The credit is equal to:

                        •  the total of each instalment (if any) payable by the employer for the year of tax;

reduced by:

                        •  the total of any credits the employer has claimed under section 112A because of one or more instalments of tax for the year of tax.

Note:          An employer can claim a credit under section 112A in some cases where the amount by reference to which an instalment is worked out reduces during the year of tax.

             (3)  The making of the assessment or determination, and the resulting credit entitlement, do not affect the liability to pay an instalment.

Note:          How the credit is applied is set out in Division 3 of Part IIB of the Taxation Administration Act 1953 .

2  Subsections 110(1), (2) and (3)

Repeal the subsections, substitute:

             (1)  An employer’s notional tax amount for a year of tax (the current year ) as at a particular time (the test time ) is worked out using the table, except as provided in subsections (3), (4) and (5).

 

Working out an employer’s notional tax amount

Item

In this case:

The notional tax amount is:

1

No other item applies

the amount of the employer’s tax for the most recent year of tax (the base year ) for which the Commissioner has made an assessment before the test time.

2

Before the test time, the Commissioner has determined that no tax is payable by the employer for a year of tax, and there is no later year of tax for which the Commissioner has made an assessment of the employer’s tax before the test time

nil

3

There is no year of tax for which the Commissioner has, before the test time, made an assessment of the employer’s tax or determined that no tax is payable by the employer

nil

4

The notional tax amount would otherwise be worked out under item 1 and:

(a) the rate of tax declared by the Parliament for the current year is different from the rate declared for the base year; and

(b) the regulations provide for varying the notional tax amount of employers for the current year

if the test time is before the prescribed day—the notional tax amount worked out under item 1; or

if the test time is on and after the prescribed day—that amount as varied in accordance with the regulations.

Note:          The employer’s first return for the year of tax is treated as an assessment: see section 72.

             (3)  The Commissioner may determine that the employer’s notional tax amount for the current year is such amount as the Commissioner estimates will be the tax payable by the employer for that year, if the Commissioner has reason to believe that that tax will exceed:

                     (a)  if the notional tax amount would otherwise be worked out under item 1 or 4 of the table in subsection (1)—the amount of the employer’s tax for the base year; or

                     (b)  if the notional tax amount would otherwise be worked out under item 2 or 3 of the table in subsection (1)—nil.

3  Subsection 111(1)

Repeal the subsection, substitute:

             (1)  The amount of an instalment of tax of an employer for a year of tax that becomes due and payable on the 21st day after the end of a quarter is the amount worked out using this formula, if the amount is positive:

Otherwise, the amount of the instalment is nil.

Note:          If the notional tax amount is too small, the instalment may not be payable: see subsection (2).

          (1A)  For the purposes of the formula in subsection (1):

notional tax amount means the employer’s notional tax amount for the year of tax, as at the end of the last day of that quarter.

previous credits means the total of any credits the employer has claimed under section 112A because of one or more instalments of tax for the same year of tax that became due and payable before that day.

previous instalments means the total of any instalments of tax for the same year of tax that became due and payable by the employer before that day.

4  Subsection 111(2)

After “year of tax” (first occurring), insert “that would otherwise become due and payable by an employer on the 21st day after the end of a quarter”.

5  Paragraph 111(2)(a)

Omit “or (2)”.

6  At the end of subsection 111(2)

Add:

             ; and (c)  unless that quarter is the first quarter in the year of tax—because of one or more previous applications of this subsection, the instalment that would otherwise have become due and payable by the employer on the 21st day after the end of the previous quarter is not payable.

7  Subsections 112(4), (4A) and (5)

Repeal the subsections.

8  After section 112

Insert:

112A   Credit in certain cases where amount of instalment is nil

             (1)  If an amount worked out using the formula in subsection 111(1) is negative, the employer is entitled to claim a credit equal to that amount, expressed as a positive amount.

Note:          This will happen if the notional tax amount has reduced since the end of an earlier quarter because, for example, the employer has made an estimate under section 112 of its tax for the current year.

             (2)  A claim for a credit must be made in the approved form on or before the 21st day after the end of the quarter.

Note:          How the credit is applied is set out in Division 3 of Part IIB of the Taxation Administration Act 1953 .

112B   Liability to GIC on shortfall in quarterly instalment worked out on the basis of estimated tax

             (1)  An employer is liable to pay the general interest charge under this section if:

                     (a)  in order to determine the amount of an instalment of tax (the underpaid instalment ) of the employer for a year of tax, an amount (whether positive, negative or nil) (the actual amount ) was worked out using the formula in subsection 111(1); and

                     (b)  because of subsection 110(5), the notional tax amount used in working out the actual amount was an estimate by the employer under subsection 112(1); and

                     (c)  that notional tax amount is less than 90% of the employer’s tax assessed for the year of tax; and

                     (d)  that assessed tax has become due and payable.

Note:          Paragraph (1)(b) is not satisfied if the notional tax amount used in working out the actual amount was estimated tax worked out under subsection 112(3) because the Commissioner disagrees with the employer’s estimate.

             (2)  The employer is liable to pay the charge, for each day in the GIC period, on the amount (if any) by which the actual amount is less than the amount (whether positive, negative or nil) worked out using the formula:

             (3)  For the purposes of the formula in subsection (2):

minimum tax amount means the lesser of:

                     (a)  the amount that, apart from subsection 110(5), would have been the notional tax amount used in working out the actual amount; and

                     (b)  the employer’s tax assessed for the year of tax.

previous credits means the total of any credits the employer has claimed under section 112A because of one or more instalments of tax for the same year of tax that became due and payable before that day.

previous instalments means the total of any instalments of tax for the same year of tax that became due and payable by the employer before the day on which the underpaid instalment became due and payable (or would have become due and payable if the actual amount had been positive).

             (4)  The amount of the general interest charge is taken to be additional tax payable under this section.

9  Subsection 112A(1) (note)

Repeal the note, substitute:

Note:          This will happen if the notional tax amount has reduced since the end of an earlier quarter because, for example:

·        the employer has made an estimate under section 112 of its tax for the current year; or

·        an assessment has been made for a more recent year of tax before the current year.

10  Subsection 136(1)

Insert:

notional tax amount has the meaning given by section 110.

11  Application of amendments

(1)        The amendments made by this Schedule (except items 2, 5, 9 and 10) apply in relation to instalments of tax for the year of tax starting on 1 April 2000 and all later years of tax.

(2)       The amendments made by items 2, 5, 9 and 10 apply in relation to instalments of tax for the year of tax starting on 1 April 2001 and all later years of tax.

Taxation Administration Act 1953

12  Subsection 8AAB(5) (table item 2)

Omit “112”, substitute “112B”.