{"id":"C2004A00557","name":"New Business Tax System (Former Subsidiary Tax Imposition) Act 1999","slug":"new-business-tax-system-former-subsidiary-tax-imposition-act-1999","collection":"act","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":"166 of 1999","makingDate":null,"administeringDepartment":null,"currentVersion":{"id":38565,"registerId":"commonwealth-C2004A00557-1775056560767","compilationNumber":null,"startDate":"2026-04-01","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"Short title","content":"#### 1 Short title\n\n  This Act may be cited as the New Business Tax System (Former Subsidiary Tax Imposition) Act 1999.","sortOrder":0},{"sectionNumber":"2","sectionType":"section","heading":"Commencement","content":"#### 2 Commencement\n\n  This Act commences on the day on which it receives the Royal Assent.","sortOrder":1},{"sectionNumber":"3","sectionType":"section","heading":"Imposition","content":"#### 3 Imposition\n\n  This section imposes a tax that is payable under section 45‑25 of the Income Tax Assessment Act 1997 by a company that was a member of the wholly‑owned group referred to in that section just before the time when the direct or indirect beneficial ownership referred to in paragraph 45‑15(1)(f) or 45‑20(1)(f) of that Act was acquired.","sortOrder":2},{"sectionNumber":"4","sectionType":"section","heading":"Amount of tax","content":"#### 4 Amount of tax\n\n  (1) The amount of the tax is an amount worked out under subsection (2) as if it were an amount of income tax payable by the company referred to in section 3.\n  (2) The amount referred to in subsection (1) is the lesser of:\n    (a) the outstanding amount of income tax payable by the former subsidiary referred to in section 45‑25 of the Income Tax Assessment Act 1997 (including any amount of general interest charge, or any amount of interest or penalty payable under former section 170AA, 207 or 207A of the Income Tax Assessment Act 1936, attributable to that amount); and\n    (b) the amount of income tax that would be payable by the former subsidiary for the income year in which the amount was included in its assessable income because of section 45‑15 or 45‑20 of that Act if:\n    (i) that amount were its taxable income for the income year; and\n    (ii) it was not entitled to any tax offset for the income year;\n    including any amount of general interest charge, or any amount of interest or penalty payable under former section 170AA, 207 or 207A of the Income Tax Assessment Act 1936, that would be attributable to that amount.\n  (3) The amount referred to in paragraph (2)(b) is reduced by any amount paid by a company (except the former subsidiary) that was a member of the former subsidiary’s former wholly‑owned group.","sortOrder":3}],"analysis":{"kimi_summary":{"content_quality":"ok","complexity_score":4,"scope_assessment":{"changed":false,"description":"This legislation maintains its original narrow purpose: imposing a specific tax liability on former subsidiaries exiting corporate groups with unpaid tax debts. The scope remains tightly focused on this single mechanism without significant expansion beyond the original policy intent."},"complexity_factors":["Heavy cross-referencing to external legislation (Income Tax Assessment Act 1997, sections 45-15, 45-20, 45-25; Income Tax Assessment Act 1936, former sections 170AA, 207, 207A)","Nested conditional calculations in section 4(2) requiring comparison of two different hypothetical amounts","Requires understanding of corporate group structures ('wholly-owned group', 'former subsidiary', 'beneficial ownership')","References to repealed provisions ('former section 170AA, 207 or 207A') creating historical legislative dependency","Counterfactual calculation in section 4(2)(b) requiring hypothetical tax computation (treating specific amount as taxable income with no offsets)"],"plain_english_summary":"This law creates a special tax that applies when a company leaves a corporate group (a 'wholly-owned group' — meaning a parent company and its 100% owned subsidiaries) and still owes income tax debts.\n\n**What it does:**\n- **Imposes a tax** on companies that were part of a corporate group just before being sold or transferred to new owners\n- The tax applies when the departing company (called the 'former subsidiary') has unpaid income tax debts\n- The tax is calculated as the **lesser of**:\n  - The actual unpaid tax debt (plus interest and penalties), OR\n  - The hypothetical tax that would be owed on the income that triggered the exit\n- If other companies in the original group have already paid some of this debt, that reduces the amount owed\n\n**Who it affects:**\n- Companies that were subsidiaries in a wholly-owned group and have since left that group\n- The remaining companies in the original corporate group (who may have to pay part of the debt)\n\n**Why it matters:**\nThis prevents companies from escaping tax debts by simply leaving a corporate group structure. Without this law, a subsidiary with tax debts could be sold to new owners, leaving the tax debt effectively uncollectible from the original group. It ensures someone — either the departing company or its former group members — remains responsible for unpaid taxes."},"flash_summary_failed":{"failed":true,"reason":"Unauthenticated. Configure AI_GATEWAY_API_KEY or use a provider module. Learn more: https://ai-sdk.dev/unauthenticated-ai-gateway","source":"analysis-cron"},"issue_detection":{"absurdities":[],"contradictions":[]},"flash_summary":{"complexity_score":4,"scope_assessment":{"changed":false,"description":"On its face, the Act gives statutory effect to a tax liability described in section 45‑25 of the Income Tax Assessment Act 1997 by specifying who (a company that was a member of the former wholly‑owned group immediately before the ownership change) pays and how the payable amount is calculated (see ss 3–4). The Act limits liability to those amounts and reduces the charge to reflect payments by other former group members (s 4(3)), rather than expanding the class of taxpayers or the kinds of amounts subject to tax."},"complexity_factors":["Cross‑references to other statutes (Income Tax Assessment Act 1997: ss 45‑15, 45‑20, 45‑25; Income Tax Assessment Act 1936: former ss 170AA, 207, 207A) increase legal-context dependency (see ss 3–4).","Calculation rule requires comparing two different measures and taking the lesser — a straightforward min() operation but dependent on tax computations and historic liabilities (s 4(2)).","Inclusion of general interest charge and specified historic penalties means monetary amounts may change over time and must be attributed to the taxable amount (s 4(2)(a),(b)).","Hypothetical computation of tax ‘as if’ an amount were the subsidiary's taxable income and with no offsets creates an artificial liability basis that needs modelling (s 4(2)(b)).","Reduction where other former group members have paid amounts requires tracing inter‑company payments and allocating credits (s 4(3)).","Temporal trigger — liability depends on company status ‘just before’ the ownership change — so precise timing facts must be established (s 3)."],"plain_english_summary":"This Act makes a company that was a member of a wholly‑owned group immediately before a change in direct or indirect beneficial ownership liable for a specific tax. The tax equals the lesser of (a) the former subsidiary's outstanding income tax (including specified interest and historic penalties) and (b) the income tax that would be payable if the amount included under sections 45‑15 or 45‑20 were treated as the subsidiary's taxable income with no tax offsets; payments by other former group members reduce that amount."},"summary":{"complexity_score":7,"scope_assessment":{"changed":false,"description":"The Act appears narrowly and precisely targeted at its stated purpose: imposing tax on former subsidiaries leaving wholly-owned groups to prevent tax avoidance through profit or credit stripping. There is no indication the scope broadened or narrowed from its original intent. Its brevity and tight cross-referencing to specific provisions of the Income Tax Assessment Act 1997 suggest it was purpose-built for a precise gap in the tax system as part of the 'New Business Tax System' reform package of 1999–2000."},"complexity_factors":["Heavy cross-referencing to multiple external Acts (Income Tax Assessment Act 1997 and 1936), making the Act incomprehensible without those reference points","Technical corporate tax concepts (wholly-owned groups, beneficial ownership, former subsidiaries) that require specialist knowledge to interpret","Multi-step calculation methodology with conditional logic (lesser of two amounts, further reduction by third-party payments)","References to now-repealed or 'former' provisions (sections 170AA, 207, 207A of the 1936 Act), adding historical complexity","Distinction between direct and indirect beneficial ownership adds layers of interpretation","The tax operates as an imposition Act — a constitutional formality splitting the charging mechanism across two separate pieces of legislation, which is confusing for non-specialists","Interaction between group liability and individual company liability requires understanding of consolidated group tax rules"],"plain_english_summary":"This Act imposes a stop-gap tax on companies that used to be wholly owned subsidiaries when their direct or indirect beneficial ownership changes. It targets former subsidiaries to prevent tax avoidance via pre-sale shifting of profits or franking credits.\n\nThe tax equals the lesser of (a) the subsidiary’s outstanding income tax (plus interest/penalties) or (b) the tax that would apply if the triggering amount were its entire taxable income without offsets, reduced by amounts already paid by related former-group companies."}},"importantCases":[],"_links":{"self":"/api/acts/new-business-tax-system-former-subsidiary-tax-imposition-act-1999","history":"/api/acts/new-business-tax-system-former-subsidiary-tax-imposition-act-1999/history","analysis":"/api/acts/new-business-tax-system-former-subsidiary-tax-imposition-act-1999/analysis","conflicts":"/api/acts/new-business-tax-system-former-subsidiary-tax-imposition-act-1999/conflicts","importantCases":"/api/acts/new-business-tax-system-former-subsidiary-tax-imposition-act-1999/important-cases","documents":"/api/acts/new-business-tax-system-former-subsidiary-tax-imposition-act-1999/documents"}}