{"id":"C2006A00081","name":"New Business Tax System (Untainting Tax) Act 2006","slug":"new-business-tax-system-untainting-tax-act-2006","collection":"act","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":"81 of 2006","makingDate":null,"administeringDepartment":null,"currentVersion":{"id":436239,"registerId":"C2006A00081-fast-fetch-1775953489520","compilationNumber":null,"startDate":"2026-04-12","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"New Business Tax System (Untainting Tax) Act 2006","content":"---\nmeta-content-style-type: text/css\nmeta-content-type: application/xhtml+xml; charset=utf-8\n---\n\n?xml version=\"1.0\" encoding=\"utf-8\" standalone=\"no\"?>\n\n![](image.001.png)\n\n \n\n \n\n \n\n \n\n \n\n \n\nNew Business Tax System (Untainting Tax) Act 2006\n\n \n\nNo. 81, 2006\n\n \n\n \n\n \n\n \n\n \n\nAn Act to impose a tax in relation to untainting tainted share capital accounts of companies\n\n \n\n \n\n \n\nContents\n\n1 Short title\n\n2 Commencement\n\n3 Imposition of tax\n\n \n\n![](image.001.png)\n\n \n\n \n\nNew Business Tax System (Untainting Tax) Act 2006\n\nNo. 81, 2006\n\n \n\n \n\n \n\nAn Act to impose a tax in relation to untainting tainted share capital accounts of companies\n\n[Assented to 30 June 2006]\n\nThe Parliament of Australia enacts:\n\n1  Short title\n\n  This Act may be cited as the New Business Tax System (Untainting Tax) Act 2006.\n\n2  Commencement\n\n (1) Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.\n\n \n\n- Commencement information\n- Column 1 Column 2 Column 3\n- Provision(s) Commencement Date/Details\n- 1. Sections 1 and 2 and anything in this Act not elsewhere covered by this table The day on which this Act receives the Royal Assent. 30 June 2006\n- 2. Section 3 At the same time as Part 1 of Schedule 4 to the Tax Laws Amendment (2006 Measures No. 3) Act 2006 commences. 30 June 2006\n\n\nNote: This table relates only to the provisions of this Act as originally passed by the Parliament and assented to. It will not be expanded to deal with provisions inserted in this Act after assent.\n\n (2) Column 3 of the table contains additional information that is not part of this Act. Information in this column may be added to or edited in any published version of this Act.\n\n3  Imposition of tax\n\n  Tax payable under section 197‑60 of the Income Tax Assessment Act 1997 is imposed.\n\n \n\n[Minister’s second reading speech made in—\n\nHouse of Representatives on 25 May 2006\n\nSenate on 15 June 2006]\n\n(72/06)\n\n \n","sortOrder":0}],"analysis":{"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"},"flash_summary":{"complexity_score":2,"scope_assessment":{"changed":false,"description":"This Act is narrowly tailored to give statutory effect to the tax described in section 197‑60 of the Income Tax Assessment Act 1997. It does not broaden that subject matter or add additional taxing mechanisms beyond the cross‑referenced provision. There is no evidence in the text that the Act grew beyond that original, narrow purpose."},"complexity_factors":["Very short: 3 sections (including short title and commencement)","Single operative provision (section 3) that imposes tax","Heavy cross‑reference to an external substantive provision (section 197‑60 of the Income Tax Assessment Act 1997)","Commencement linked to another Act/schedule (Part 1 of Schedule 4 to the Tax Laws Amendment (2006 Measures No. 3) Act 2006)","No defined terms, exceptions or procedural rules within this Act itself","Interpretive complexity arises from dependence on the cross‑referenced provision rather than internal complexity"],"plain_english_summary":"This Act creates a one‑line legal duty: it imposes the tax outcome already set out in section 197‑60 of the Income Tax Assessment Act 1997. It does not itself define rates, timing or collection mechanics — those are in the cross‑referenced provision and ATO practice.\n\nIt chiefly affects companies (and related stakeholders) involved in transactions that “untaint” tainted share capital accounts, changing incentives, compliance burdens and corporate structuring around those events."},"kimi_summary":{"content_quality":"ok","complexity_score":2,"scope_assessment":{"changed":false,"description":"This Act has remained precisely within its original purpose: imposing a specific tax on untainting of tainted share capital accounts. It has not expanded beyond this narrow, technical function since enactment."},"complexity_factors":["Extremely short: only 3 operative sections","No defined terms in the Act itself — all substantive definitions reside in the Income Tax Assessment Act 1997","Single operative provision (section 3) that cross-references to external legislation for all substantive content","No conditional logic, exceptions, or administrative machinery within this Act","Mechanically simple imposition structure: 'Tax payable under [external section] is imposed'"],"plain_english_summary":"**What this law does:**\n\nThis Act creates a specific tax that companies must pay when they \"clean up\" their share capital accounts — a process called \"untainting.\"\n\n**Background you need to understand:**\n\n- When companies receive money from shareholders (share capital), this money is normally \"sacred\" — it can't be easily handed back to shareholders without complex tax consequences.\n- However, if a company puts certain types of money into its share capital account that *shouldn't* be there (for example, money that was originally a tax-deductible debt that got converted to shares), the account becomes \"tainted.\"\n- A \"tainted\" share capital account loses its special tax protections. Companies sometimes want to \"untaint\" (clean up) these accounts to restore the tax benefits.\n\n**What the tax does:**\n\nThis Act imposes a one-off tax on companies that choose to untaint their tainted share capital accounts. The tax is calculated under rules set out in section 197-60 of the Income Tax Assessment Act 1997 (the main Australian income tax law).\n\n**Who it affects:**\n\n- Australian companies with tainted share capital accounts who want to restore them to \"clean\" status\n- Typically larger corporate groups that have undergone restructures, debt-to-equity swaps, or other corporate transactions that contaminated their share capital accounts\n\n**Why it matters:**\n\nWithout this tax, companies could potentially get a double benefit — they previously claimed tax deductions on money that later became share capital, and then could return that money to shareholders tax-free. This Act ensures the government gets its fair share when companies want to reset their accounts.\n\n**Key point:** This is a very short, technical Act that simply \"switches on\" a tax that is fully described elsewhere in the tax law. It doesn't set the tax rate or calculation method — those details live in the Income Tax Assessment Act 1997."}},"importantCases":[],"_links":{"self":"/api/acts/new-business-tax-system-untainting-tax-act-2006","history":"/api/acts/new-business-tax-system-untainting-tax-act-2006/history","analysis":"/api/acts/new-business-tax-system-untainting-tax-act-2006/analysis","conflicts":"/api/acts/new-business-tax-system-untainting-tax-act-2006/conflicts","importantCases":"/api/acts/new-business-tax-system-untainting-tax-act-2006/important-cases","documents":"/api/acts/new-business-tax-system-untainting-tax-act-2006/documents"}}