Commonwealth Numbered Regulations - Explanatory Statements

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INCOME TAX AMENDMENT REGULATIONS 2002 (NO. 7) 2002 NO. 302

STATUTORY RULES 2002 No. 302

Issued by authority of the Minister for Revenue and Assistant Treasurer

Income Tax Assessment Act 1936

Income Tax Amendment Regulations 2002 (No. 7)

Section 266 of the Income Tax Assessment Act 1936 (the Act) provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.

The purpose of the Regulations is to ensure that provisions in existing Regulations that create offences continue to operate in the same manner following the application of the Criminal Code to all Commonwealth legislation.

The Criminal Code was enacted in the Criminal Code Act 1995. It provides a consistent framework for the interpretation of all criminal provisions. The Criminal Code commenced to apply to new offences from 1 January 1997 and to existing provisions from 15 December 2001.

The Regulations amend the Income Tax Regulations 1936. The amendments repeal the global offence provision, Regulation 176, which is a general provision that provides a penalty upon conviction for contravention of the regulations and make necessary consequential changes to the remaining offences. For example the amendments insert the penalty at the foot of each offence. In other cases they ensure that existing offences of strict liability continue to be offences of strict liability following the introduction of the Criminal Code. They clarify the defences available in relation to some offences. Some amendments also set out the fault elements of the offences.

Details of the proposed Regulations are set out in the Attachment.

The Regulations commenced on gazettal.

ATTACHMENT

Income Tax Amendment Regulations 2002 (No. 7)

Regulation 1 - specifies the name of the Regulations as the Income Tax Amendment Regulations 2002 (No. 7).

Regulation 2 - provides that the Regulations commence on gazettal.

Regulation 3 - provides that Schedule 1 amends the Income Tax Regulations 1936.

Schedule 1 - Amendments to the Income Tax Regulations 1936

Regulations 19, 99, 99A, 99B, 99C, 99D, 99H, 99I, 99L, 163, 164 and 168 were all strict liability offences before the Criminal Code started to apply on 15 December 2001. In each case a subregulation has been inserted to ensure that the offence is still a strict liability offence in the future.

An offence of strict liability is an offence where no fault elements apply to the physical elements of the offence. For an offence of strict liability the defence of reasonable mistake of fact under section 9.2 of the Criminal Code is available. Strict liability is described in section 6.1 of the Criminal Code.

The Criminal Code requires that provisions that create an offence of strict liability must expressly state that they are strict liability offences. If the provision does not specifically state this, the offence is not a strict liability offence.

Regulation 19

Subregulations 19(1) and 19(2) are offences relating to statements to be furnished by employers. These subregulations are currently offences of strict liability and the amendment inserts a penalty of 5 penalty units at the foot of each subregulation. Subregulation 19(4) has been inserted to provide that Subregulations 19(1) and 19(2) are offences of strict liability, as they were before the Criminal Code applied.

Subregulation 19(1) has also been amended to provide that the employer has to give the notice to the Commissioner of Taxation (Commissioner) at the addresses in Subregulation 19(3). This amendment makes it clearer where the notices are to be sent.

Regulation 99

Regulation 99 requires the payer to give a taxpayer an Eligible Termination Payment (ETP) pre-payment statement. A penalty of 5 penalty units has been inserted at the foot of Subregulation 99(1) which requires a payer to give the taxpayer an ETP pre-payment statement before an ETP is made. Subregulation 99(1A) has been inserted to provide that Subregulation 99(1) is an offence of strict liability, as it was before the Criminal Code applied.

Regulation 99A

Regulation 99A deals with the contents of an ETP pre-payment statement. Subregulation 99A(1) is reworded to clarify that the offence applies to the payer, by stating that the payer is required to state certain things in the ETP pre-payment statement. Until now, the subregulation has just said what the statement must contain. A penalty of 5 penalty units has been inserted at the foot of Subregulation 99A(1). Subregulation 99A(lA) has been inserted to provide that Subregulation 99A(1) is an offence of strict liability, as it was before the Criminal Code started to apply.

Regulation 99B

Regulation 99B requires the payer to request the taxpayer to give the payer instructions in accordance with Regulation 99E for payment of an ETP. The amendment has altered the offence to apply to the payer rather than the object (the ETP statement). This clarifies who commits the offence if the request is not made as required.

A penalty of 5 penalty units has been inserted at the foot of Subregulation 99B(1). Subregulation 99B(lA) has been inserted to provide that Subregulation 99B(1) is an offence of strict liability and ensures that it continues to be so.

Regulation 99C

Regulation 99C deals with a payer complying with instructions for payment of an ETP in accordance with Regulation 99E. A penalty of 5 penalty units has been inserted at the foot of Subregulation 99C(1). Subregulation 99C(lA) has been inserted to provide that Subregulation 99C(1) is an offence of strict liability, as it was before the Criminal Code applied.

Subregulation 99C(2) contains a defence to Subregulation 99C(1) where the payer would breach a law of the Commonwealth, State or Territory or the terms of an agreement by complying with Subregulation 99C(1). Note 1 to Subregulation 99C(2) provides examples of Commonwealth laws that may be relevant to the subregulation. Note 2 to Subregulation 99C(2) has been inserted to clarify that the defendant bears an evidential burden for the defence.

Regulation 99D

Regulation 99D requires the payer to give the receiving fund an ETP roll-over statement. A penalty of 5 penalty units has been inserted at the foot of Subregulation 99D(1). Subregulation 99D(3) has been inserted to provide that Subregulation 99D(1) is an offence of strict liability and that it continues to be so.

Subregulation 99D(2) contains a defence to Subregulation 99D(1) for a failure to set out an amount where the amount was nil. A note has also been inserted to state that the defendant bears an evidential burden for the defence.

Regulation 99H

Regulation 99H requires the payer to give to the taxpayer or an agent of the taxpayer a copy of the ETP roll-over statement. The offences in Regulation 99H have been restructured to clarify elements of the offences, and reworded using simpler language. These changes do not change the operation or the effect of the offence provisions. As a result of this rewording, the offence contained in Regulation 99H has been put into Subregulation 99H(1), with a penalty at the foot of the subregulation. Subregulation 99H(2) has been inserted to provide that Subregulation 99H(1) is an offence of strict liability, as it was before the Criminal Code applied.

Subregulation 99H(3) provides a defence to Subregulation 99H(1) where paragraph 99(2)(a) or (b) (both of which contain exceptions to the payer providing an ETP pre-payment statement) applies to the payer. A note has also been inserted to state that the defendant bears an evidential burden for the defence.

Regulation 99I

Regulation 99I requires the payer and taxpayer to keep a copy of certain instructions and statements under the ETP rules. A penalty of 5 penalty units has been inserted at the foot of Subregulations 99I(1) and 99I(2). Subregulation 99I(3) has been inserted to provide that Subregulations 99I(1) and (2) are offences of strict liability and ensures that they continue to be so.

Regulation 99L

Regulation 99L deals with who has authority to sign forms required by Subdivision 3A (ETP records to be kept). The offences in Regulation 99L have been restructured to clarify elements of the offences, and reworded using simpler language. These changes do not change the operation or the effect of the offence provisions.

Subregulation 99L(1) requires that a form must be signed and dated on the day when the form is issued to the person. A penalty of 5 penalty units has been inserted at the Subregulations 99L(1). Subregulation 99L(2) has been inserted to provide that Subregulation 99L(1) is an offence of strict liability, as it was before the Criminal Code applied.

Subregulation 99L(3) sets out the requirements of an authorisation under Subregulation 99L(1).

Regulation 100B

Under Regulation 100B the Commissioner can serve a notice on a person who has contravened certain ETP regulations. Regulation 100B has been amended to refer to those regulations and subregulations which, as a result of those amendments, contain offences.

Regulation 100C

Paragraph 100C(1)(b) requires that a contravention notice must set out the penalty that applies. Therefore, Subregulation 100C(2) has been inserted to state the penalty that previously appeared in Regulation 100F.

Regulation 100F

Regulation 100F is omitted by these amendments. The amendment that describes the penalty in paragraph 100C(1)(b) effectively makes Regulation 100F redundant.

Regulation 163

Regulation 163 deals with the return of certificates of registration and exemption by tax agents.

A penalty of 5 penalty units has been inserted at the foot of Subregulation 163(2). Subregulation 163(3) has been inserted to provide that Subregulation 162(2) is an offence of strict liability, as it was before the Criminal Code applied.

Regulation 164

Regulation 164 requires registered tax agents to give a notification of change of address. A penalty of 5 penalty units has been inserted at the foot of Subregulation 164(1). Subregulation 164(lA) has been inserted to provide that Subregulation 164(1) is an offence of strict liability, as it was before the Criminal Code applied.

Regulation 168

Regulation 168 deals with evidence given to a Tax Agents Board. Under Subregulation 168(2), the Chairperson of the Board may require a person to supply information or to give evidence. The amendment to Subregulation 168(2) rewords the regulation to use simpler language. New Subregulation 168(2A) is inserted to provide that the person must comply with the notice. Subregulation 168(2B) is inserted to provide that Subregulation 168(2A) is an offence of strict liability and ensures that it continues to be so.

Regulation 176

Regulation 176 is a global offence provision which provides that it is an offence for a person to contravene a provision of the regulations. As the offence provisions have been amended by these amendments to include the penalty at the foot of the regulations, and, where relevant, state that they are strict liability offences or have defences etc, the global offence provision is superfluous and can therefore be repealed.