Commonwealth Numbered Regulations - Explanatory Statements

[Index] [Search] [Download] [Related Items] [Help]

INCOME TAX (EXCLUDED STBS) REGULATIONS 1997 NO. 275

STATUTORY RULES 1997 No. 275

Issued by the Authority of the Assistant Treasurer

Income Tax Assessment Act 1936

Income Tax (Excluded STBs) Regulations

Section 266 of the Income Tax Assessment Act 1936 (the Act) empowers the Governor-General to make regulations, not inconsistent with the Act, prescribing matters which are required or permitted to be prescribed by regulations, or which are necessary or convenient to be prescribed by regulations, for giving effect to the Act.

The purpose of tile regulations is to prescribe those wholly-owned State and Territory Bodies (STBs) which are 'excluded STBs' for the purposes of section 24AM of the Act, that is, prescribe those STBs which are excluded from the income tax exemption provided by section 24AM of the Act and are therefore subject to income tax. STBs are bodies which are 'controlled' by one or more government entities, that is, they are entities owned States or Territories. Sections 24A0-24AS of the Act specify the control tests.

The Statement of Policy Intent (SOPI) agreed at the 1994 Premiers' Conference, required the Commonwealth to exempt all STBs from income tax and the States and Territories to subject all STBs to income tax equivalent regimes.

In order to comply with the SOPI, the Commonwealth amended the Act in 1995 to exempt all STBs from income tax (Section 24AM). Subsequently, all States and Territories have sought to exclude, on the grounds of administrative convenience, some STBs from the income tax exemption provided by section 24AM.

An STB will not be exempt from income tax under section 24AM if it is an 'excluded STB'. Paragraph (a) of section 24AT of the Act defines an 'excluded STB' as one that, at a particular time, is prescribed (by regulations) as an 'excluded M' in relation to that time for the purposes of the Act.

Subsection 24AV(1) of the Act requires that the States and Territories consent to regulations which prescribe that an STB is an 'excluded STB' for the purposes of the Act. Since the regulations prescribe those STBs which are 'excluded STBs' for the purposes of section 24AM of the Act, all State Premiers and Territory Chief Ministers have been consulted regarding the proposed regulations and have provided their written consent.

The regulations commenced on 1 July 1994. Under subsection 24AV(2) of the Act, despite section 48 of the Acts Interpretation Act 1901, a regulation prescribing an STB may provide that the STB is an 'excluded STB' in relation to a time before the day of the notification of the regulation in the Gazette.