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Tax Laws Amendment (2008 Measures No. 1) Bill 2008

Schedule 1 Political contributions and gifts

   

Income Tax Assessment Act 1936

1  Subsections 78A(2), (3) and (4)

Omit “fund, authority, institution or person” (wherever occurring), substitute “fund, authority or institution”.

Income Tax Assessment Act 1997

2  Section 12-5 (table item headed “political parties”)

Repeal the item, substitute:

political contributions and gifts

 

deductions for ..........................................................................

26-22

3  After section 26-20

Insert:

26-22   Political contributions and gifts

You cannot deduct political contributions or gifts

             (1)  You cannot deduct under this Act:

                     (a)  a contribution (including a membership fee) or gift to a political party that is registered under Part XI of the Commonwealth Electoral Act 1918 or under corresponding State or Territory legislation; or

                     (b)  a contribution or gift to an individual when the individual is a candidate in an election for members of:

                              (i)  an * Australian legislature; or

                             (ii)  a * local governing body; or

                     (c)  a contribution or gift to an individual who is a member of:

                              (i)  an Australian legislature; or

                             (ii)  a local governing body.

Exception for employees and office holders

             (2)  However, subsection (1) does not apply to a loss or outgoing incurred in gaining or producing assessable income from which an amount is required to be withheld under section 12-35 or 12-45 in Schedule 1 to the Taxation Administration Act 1953 .

Note:          These provisions of the Taxation Administration Act 1953 require amounts to be withheld from income of employees and office holders.

Starting and stopping being a candidate

             (3)  For the purposes of this section, an individual:

                     (a)  starts being a candidate when the individual’s intention to be or to attempt to be a candidate for the election is publicly available; and

                     (b)  stops being a candidate at the earlier of:

                              (i)  the time when the result of the election is declared or otherwise publicly announced by an entity (an electoral official ) authorised under the relevant electoral legislation; and

                             (ii)  the time (if any) when the individual’s intention to no longer be a candidate for the election is publicly available.

Starting being a member

             (4)  An individual who becomes a member as a result of an election (including an election that is later declared void) is taken to start being a member when the individual’s election as a member is declared or otherwise publicly announced by an electoral official.

4  Subsection 30-5(1)

Omit “a contribution or gift to a political party, independent candidate or member, or”.

5  Subsection 30-5(1) (note 1)

Omit “Note 1”, substitute “Note”.

6  Subsection 30-5(1) (note 2)

Repeal the note.

7  Subsection 30-15(2) (note 1)

Omit “Note 1”, substitute “Note”.

8  Subsection 30-15(2) (note 2)

Repeal the note.

9  Subdivision 30-DA

Repeal the Subdivision.

10  Subsection 30-315(2) (table item 87)

Repeal the item.

11  At the end of section 110-38

Add:

             (6)  Expenditure does not form part of any element of the cost base to the extent that section 26-22 prevents it being deducted.

Note:          Section 26-22 denies deductions for political contributions and gifts.

12  After subsection 110-55(9E)

Insert:

           (9F)  Expenditure does not form part of the reduced cost base to the extent that section 26-22 prevents it being deducted.

Note:          Section 26-22 denies deductions for political contributions and gifts.

13  Subsection 995-1(1) (definition of independent candidate )

Repeal the definition.

14  Subsection 995-1(1) (definition of independent member )

Repeal the definition.

15  Application

The amendments made by this Schedule apply in relation to contributions or gifts made on or after 1 July 2008.