Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
2010-2011-2012
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
TAX LAWS AMENDMENT (MANAGED INVESTMENT TRUST
WITHHOLDING TAX) BILL 2012
INCOME TAX (MANAGED INVESTMENT TRUST WITHHOLDING TAX)
AMENDMENT BILL 2012
EXPLANATORY MEMORANDUM
(Circulated by the authority of the
Deputy Prime Minister and Treasurer, the Hon Wayne Swan MP)
Table of contents
Glossary .................................................................................................. 1
General outline and financial impact ....................................................... 3
Chapter 1 Change to managed investment trust final
withholding tax rate ....................................................... 5
Chapter 2 Statement of Compatibility with Human Rights .............. 7
Index ....................................................................................................... 9
Glossary
The following abbreviations and acronyms are used throughout this
explanatory memorandum.
Abbreviation Definition
MIT Managed investment trust
1
General outline and financial impact
Managed Investment Trust final withholding tax rate
The Income Tax (Managed Investment Trust Withholding Tax)
Amendment Bill 2012 amends the Income Tax (Managed Investment
Trust Withholding Tax) Act 2008 to increase the Managed Investment
Trust (MIT) final withholding tax from 7.5 per cent to 15 per cent on fund
payments made in relation to income years that commence on or after
1 July 2012.
Schedule 1 to Tax Laws Amendment (Managed Investment Trust
Withholding Tax) Bill 2012 makes consequential amendments to the
Taxation Administration Act 1953 to give effect to the increase in the
concessional MIT final withholding tax rate imposed by the Income Tax
(Managed Investment Trust Withholding Tax) Amendment Bill 2012.
Date of effect: The amendments apply from 1 July 2012.
Proposal announced: The measure was announced as part of the
2012-2013 Budget.
Financial impact: Expected to generate approximately $260 million, in
revenue, over the forward estimates.
2012-13 2013-14 2014-15 2015-16
$50m $65m $70m $75m
Human rights implications: This Schedule does not raise any human
rights issue. See Statement of Compatibility with Human Rights --
Chapter 2, paragraphs 2.1 to 2.4
Compliance cost impact: Low.
3
Change to managed investment trust final
withholding tax rate
Outline of chapter
1.1 The Income Tax (Managed Investment Trust Withholding Tax)
Amendment Bill 2012 amends the Income Tax (Managed Investment
Trust Withholding Tax) Act 2008 to increase the managed investment trust
(MIT) final withholding tax from 7.5 per cent to 15 per cent on fund
payments made in relation to income years that commence on or after
1 July 2012.
1.2 Schedule 1 to Tax Laws Amendment (Managed Investment
Trust Withholding Tax) Bill 2012 makes consequential amendments to
the Taxation Administration Act 1953 to give effect to the increase in the
MIT final withholding tax rate imposed by the Income Tax (Managed
Investment Trust Withholding Tax) Amendment Bill 2012.
Context of amendments
1.3 This amendment will increase the MIT final withholding tax
from 7.5 per cent to 15 per cent on fund payments made in relation to
income years that commence on or after 1 July 2012.
Summary of new law
1.4 The amendment will increase the MIT final withholding tax rate
from 7.5 per cent to 15 per cent. The MIT final withholding tax rate of
15 per cent will apply to fund payments made in relation to income years
that commence on or after 1 July 2012.
5
Tax Laws Amendment (Managed Investment Trust Withholding Tax) Bill 2012
Income Tax (Managed Investment Trust Withholding Tax) Amendment Bill 2012
Comparison of key features of new law and current law
New law Current law
The MIT final withholding tax rate of The tax rate of MIT final withholding
15 per cent applies to fund payments is 7.5 per cent.
made in relation to income years that
commence on or after 1 July 2012.
Detailed explanation of new law
1.5 The rate of MIT final withholding tax is prescribed in
subparagraph 4(1)(a)(ii) of the Income Tax (Managed Investment Trust
Withholding Tax) Act 2008.
1.6 The Income Tax (Managed Investment Trust Withholding Tax)
Amendment Bill 2012 will amend subparagraph 4(1)(a)(ii) to increase the
MIT final withholding tax rate from 7.5 per cent to 15 per cent on fund
payments made in relation to income years that commence on or after
1 July 2012. [Schedule 1 to the Income Tax (Managed Investment Trust Withholding
Tax) Amendment Bill 2012, item 1, subparagraph 4(1)(a)(ii)]
Application and transitional provisions
1.7 The 15 per cent tax rate will apply to fund payments made in
relation to income years that commence on or after 1 July 2012.
[Schedule 1 to the Income Tax (Managed Investment Trust Withholding Tax)
Amendment Bill 2012, item 1, subparagraph 4(1)(a)(ii)]
Consequential amendments
1.8 The MIT final withholding tax rate is also prescribed in
subsections 12-390(3) and 12-390(6) of Schedule 1 to the Taxation
Administration Act 1953.
1.9 Schedule 1 of to Tax Laws Amendment (Managed Investment
Trust Withholding Tax) Bill 2012 makes consequential amendments to
subsections 12-385(3), 12-390(3) and 12-390(6) of Schedule 1 to the
Taxation Administration Act 1953 to reflect the new 15 per cent final MIT
withholding tax rate. [Schedule 1 to Tax Laws Amendment (Managed Investment
Trust Withholding Tax) Bill 2012, items 1 to 3, subparagraphs 12-385(3)(a)(iii),
12-390(3)(a)(iii) and 12-390(6)(a)(iii)]
6
Statement of Compatibility with Human
Rights
Prepared in accordance with Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011
Change to managed investment trust final withholding tax rate
2.1 The Income Tax (Managed Investment Trust Withholding Tax)
Amendment Bill 2012 and Schedule 1 to Tax Laws Amendment
(Managed Investment Trust Withholding Tax) Bill 2012 are compatible
with the human rights and freedoms recognised or declared in the
international instruments listed in section 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011.
Overview
2.2 The purpose of the amendment is to raise the managed
investment trust final withholding tax rate from 7.5 per cent to
15 per cent.
Human rights implications
2.3 This amendment does not engage any of the applicable rights or
freedoms.
Conclusion
2.4 This amendment is compatible with human rights as it does not
raise any human rights issues.
Assistant Treasurer, the Hon David Bradbury
7
Index
Schedule 1: Change to managed investment trust final
withholding tax rate
Bill reference Paragraph number
Item 1, subparagraph 4(1)(a)(ii) 1.6, 1.7
Items 1 to 3, subparagraphs 12-385(3)(a)(iii), 12-390(3)(a)(iii) and 1.9
12-390(6)(a)(iii)
9