I, the Honourable Margaret Beazley AC KC, Administrator of the Government of the Commonwealth of Australia, acting with the advice of the Federal Executive Council, make the following regulations.
Dated 4 September 2025
Margaret Beazley AC KC
Administrator
By Her Excellency’s Command
Dr Daniel Mulino
Assistant Treasurer Minister for Financial Services
Contents
Part 1—Preliminary
1 Name
2 Commencement
3 Authority
4 Definitions
Part 2—Liability to taxation—general
5 Class of persons serving with an armed force under the control of the United Nations
6 Defence Force members performing certain overseas duty—eligible duty
Part 3—Income
7 Annuities and superannuation pensions—Life Tables
Part 4—Deductions
8 Excluded car parking facilities
Part 5—Rebates
Division 1—Tax rebate for low income aged persons and pensioners
9 Key concepts
10 Entitlement to rebate
11 Amount of rebate
12 Transfer of unused base rebate amount from individual taxpayer to spouse or spouse’s trustee
Division 2—Rebate in respect of certain benefits etc.
13 Amount of rebate
Part 6—Returns and assessments
14 Amendment of assessments
Part 7—Public officers
15 Appointment of public officer
Part 8—Attribution of income in respect of controlled foreign companies
16 Interpretation
17 Items of designated concession income
18 Accruals tax laws
19 Listed countries
20 Capital gains regarded as subject to tax
21 State foreign taxes that are treated as federal foreign taxes
Part 9—Application and transitional provisions
Division 1—Transitional matters relating to the repeal of the Income Tax Assessment (1936 Act) Regulation 2015
Section 1 - Income Tax Assessment (1936 Act) Regulations 2025 - Income Tax Assessment (1936 Act) Regulations 2025 | Zoe
22 Definitions
23 This instrument generally applies to a year of income starting at or after the commencement time
Part 1—Preliminary
1 Name
This instrument is the Income Tax Assessment (1936 Act) Regulations 2025.
2 Commencement
(1) Each provision of this instrument 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.
Commencement information
Column 1 Column 2 Column 3
Provisions Commencement Date/Details
The whole of this instrument 1 October 2025. 1 October 2025
Note: This table relates only to the provisions of this instrument as originally made. It will not be amended to deal with any later amendments of this instrument.
(2) Any information in column 3 of the table is not part of this instrument. Information may be inserted in this column, or information in it may be edited, in any published version of this instrument.
3 Authority
This instrument is made under the Income Tax Assessment Act 1936.
4 Definitions
In this instrument:
Act means the Income Tax Assessment Act 1936.
associate has the same meaning as in section 318 of the Act.
base rebate amount, for a rebate under section 160AAAA or 160AAAB of the Act, has the meaning given by subsection 9(2) of this instrument.
compulsory acquisition has the meaning given by subsection 20(5).
disabled persons’ car parking permit has the meaning given by subsection 8(2).
disabled persons’ car parking space has the meaning given by subsection 8(2).
lowest marginal tax rate, in relation to a year of income, means the rate that is:
(a) the lowest rate specified in the table in Part I of Schedule 7 to the Income Tax Rates Act 1986, in the application of the table to that year; and
(b) expressed as a decimal fraction.
rebatable benefit amount has the meaning given by subsection 13(4).
rebate maximum amount means $445.
rebate reduction rate means 0.015.
rebate reduction threshold means $37,000.
rebate threshold, for a rebate under section 160AAAA or 160AAAB of the Act, has the meaning given by section 9 of this instrument.
resident investment vehicle has the meaning given by the Income Tax Assessment Act 1997.
roll‑over relief has the meaning given by section 20.
second lowest marginal tax rate, in relation to a year of income, means the rate that is:
(a) the second lowest rate specified in the table in Part I of Schedule 7 to the Income Tax Rates Act 1986, in the application of the table to that year; and
(b) expressed as a decimal fraction.
tax‑free threshold has the same meaning as in the Income Tax Rates Act 1986.
Part 2—Liability to taxation—general
5 Class of persons serving with an armed force under the control of the United Nations
For the purposes of subsection 23AB(2) of the Act, members of the Australian Federal Police who are members of the force, created by the United Nations, for keeping peace in Cyprus are a prescribed class of persons.
6 Defence Force members performing certain overseas duty—eligible duty
(1) For the purposes of subsection 23AD(2) of the Act, duty:
(a) with an organisation specified in column 1 of an item of the table in subsection (3) of this section; and
(b) after the day specified in column 3 of the item;
is declared to be eligible duty if the duty is in an area specified in column 2 of the item.
(2) For the purposes of subparagraph 23AD(3)(b)(iii) of the Act, the latest time before the day specified in column 4 of the item (if any) is prescribed in relation to that eligible duty.
(3) The table is:
Eligible duty
Column 1 Column 2 Column 3 Column 4
Item Organisation Area After the day Before the day
1 Australian Defence Force on Operation Accordion The land area, territorial waters, airspace and superjacent airspace of the following countries:(a) Bahrain;(b) Qatar;(c) the United Arab Emirates 30 June 2014
2 Australian Defence Force on Operation Augury The following areas:(a) the land area and superjacent airspace of Afghanistan;(b) the land area, territorial waters, airspace and superjacent airspace of the following countries:(i) Iraq;(ii) Jordan;(iii) Syria;(iv) the United Arab Emirates 3 July 2014
3 Australian Defence Force on Operation Manitou The sea (including adjacent ports and the area within a 10 kilometres radius of such ports) and superjacent airspace of the following:(a) the Gulf of Aden;(b) the Gulf of Aqaba;(c) the Gulf of Oman;(d) the Gulf of Suez;(e) the Indian Ocean north of latitude 15°S and west of longitude 70°E;(f) the Persian Gulf;(g) the Red Sea;(h) the Strait of Hormuz 14 May 2015
4 Australian Defence Force on Operation Paladin The land area, territorial waters, airspace and superjacent airspace of the following countries:(a) Egypt;(b) Israel;(c) Jordan;(d) Lebanon;(e) Syria 1 July 2020
5 Australian Defence Force on Operation Steadfast The land area, territorial waters, airspace and superjacent airspace of Iraq 9 September 2018
Part 3—Income
7 Annuities and superannuation pensions—Life Tables
For the purposes of the definition of life expectation factor in subsection 27H(4) of the Act, the following table has effect.
Life Tables
Item Column 1For an annuity … Column 2these Life Tables are prescribed …
1 first commencing to be payable before 1 September 1988 the Australian Life Tables 1975–1977 published by the Australian Government Actuary.
2 first commencing to be payable:(a) on or after 1 September 1988; and(b) before 1 May 1993 the Australian Life Tables 1980–1982 published by the Australian Government Actuary.
3 first commencing to be payable:(a) on or after 1 May 1993; and(b) before 1 July 1993 the Australian Life Tables 1985–1987 published by the Australian Government Actuary.
4 first commencing to be payable on or after 1 July 1993 the Australian Life Tables that are most recently published by the Australian Government Actuary before the year in which the annuity first commences to be payable.
Part 4—Deductions
8 Excluded car parking facilities
(1) For the purposes of paragraph 51AGA(1)(e) of the Act, the provision to an employee of car parking facilities for a car during a period is taken to be excluded from section 51AGA of the Act if, during the period:
(a) the employee:
(i) is entitled under the law of a State or Territory to the use of a disabled persons’ car parking space; and
(ii) is the driver of, or is a passenger in, the car; and
(b) a valid disabled persons’ car parking permit is displayed on the car.
(2) In this instrument:
disabled persons’ car parking permit means a permit, label or other document:
(a) issued by the appropriate authority in a State or Territory; and
(b) authorising the parking of a car in a disabled persons’ car parking space.
disabled persons’ car parking space means a car parking space:
(a) in a public car parking area; and
(b) designated for the exclusive use of disabled persons.
Part 5—Rebates
Division 1—Tax rebate for low income aged persons and pensioners
9 Key concepts
Purpose of this section
(1) This section defines concepts that are relevant to working out:
(a) whether:
(i) a taxpayer who is an individual is entitled to a rebate under section 160AAAA of the Act for a year of income; or
(ii) a taxpayer that is a trustee is entitled to a rebate under section 160AAAB of the Act for a year of income in respect of a beneficiary who is an individual; and
(b) the amount of the rebate.
Base rebate amount
(2) The base rebate amount, for the rebate, is:
(a) the amount in the item of the following table that applies to the individual mentioned in subparagraph (1)(a)(i) or (ii); or
(b) if more than one item of the table applies to the individual—whichever amount in the applicable items gives the taxpayer the greatest rebate entitlement.
Base rebate amount
Item Column 1Class of individual Column 2Base rebate amount
1 An individual who, at any time during the year, is not a spouse of another individual $2,230
2 An individual who, at any time during the year, is a spouse of another individual $1,602
3 A member of an illness separated couple (within the meaning of the Social Security Act 1991) $2,040
Note: For the purposes of subsection 11(2), the base rebate amount may be affected by section 12.
(3) For the purposes of items 1 and 2 of the table in subsection (2), spouses living separately and apart on a permanent basis are treated as not being spouses of each other.
Rebate threshold
(4) The rebate threshold, for the rebate, is:
(a) the amount worked out using the formula in subsection (5); or
(b) if that amount is greater than the rebate reduction threshold—the amount worked out using the formula in subsection (6).
(5) For the purposes of paragraph (4)(a), the formula is:
(2) The amount worked out under subsection (1) must be rounded up to the nearest whole dollar, if the amount is not an amount of whole dollars.
11 Amount of rebate
(1) For the purposes of subsection 160AAAA(1) or 160AAAB(1) of the Act, the amount of the rebate is ascertained in accordance with subsection (2) of this section (as affected by section 12 of this instrument).
(2) The amount of the rebate is:
(a) the base rebate amount for the rebate; or
(b) if:
(i) in the case of a rebate under section 160AAAA of the Act—the rebate income of the taxpayer; or
(ii) in the case of a rebate under section 160AAAB of the Act—the rebate income of the beneficiary;
exceeds the rebate threshold for the rebate—the base rebate amount for the rebate, reduced by 12.5 cents for each $1 of the amount of the excess.
Note: The base rebate amount and the rebate threshold may be affected by section 12.
12 Transfer of unused base rebate amount from individual taxpayer to spouse or spouse’s trustee
(1) This section applies if:
(a) either:
(i) an individual (referred to in this section as the individual and the taxpayer) is entitled to a rebate under section 160AAAA of the Act for a year of income; or
(ii) a trustee (referred to in this section as the first trustee and the taxpayer) is entitled to a rebate under section 160AAAB of the Act for a year of income in respect of a beneficiary who is an individual (referred to in this section as the individual); and
(b) the base rebate amount for the rebate exceeds:
(i) if subparagraph (a)(i) of this subsection applies—the tax payable by the taxpayer in respect of income of the year; or
(ii) if subparagraph (a)(ii) of this subsection applies—the tax payable by the taxpayer in respect of the individual for the year;
(disregarding any credits or rebates); and
Note: See subsection (5).
(c) a person is at any time in the year the individual’s spouse; and
(d) the spouse (whether or not the same person as the first trustee):
(i) is entitled to a rebate of tax (the spouse’s rebate) under section 160AAAA of the Act for the year; or
(ii) is a beneficiary in respect of whom a trustee (whether or not the same person as the individual or the first trustee) is entitled to a rebate of tax (the spouse’s trustee’s rebate) under section 160AAAB of the Act for the year; and
(e) the amount of the spouse’s rebate, or the spouse’s trustee’s rebate, is less than the base rebate amount for that rebate.
(2) For the purposes of paragraph (1)(c), spouses living separately and apart on a permanent basis are treated as not being spouses of each other.
(3) For the purposes of subsection 11(2) (but not section 10):
(a) the base rebate amount for the taxpayer’s rebate is reduced by the amount of the excess mentioned in paragraph (1)(b) of this section; and
(b) the base rebate amount for the spouse’s rebate, or the spouse’s trustee’s rebate, is increased by:
(i) the amount of the excess mentioned in paragraph (1)(b) of this section; or
(ii) if the conditions in subsection (4) of this section are met—the greater of the amount worked out using the following formula and nil:
Note: Changing the base rebate amount may also change the rebate threshold: see subsections 9(4) to (7).
(4) For the purposes of subparagraph (3)(b)(ii), the conditions are:
(a) that the following is greater than $6,000:
(i) if subparagraph (1)(a)(i) applies—the taxpayer’s taxable income for the year;
(ii) if subparagraph (1)(a)(ii) applies—the taxpayer’s taxable income in relation to the individual for the year; and
(b) that each rate of tax payable by the taxpayer is a rate set out in Part I of Schedule 7 to the Income Tax Rates Act 1986.
Certain pensions treated as assessable income
(5) For the purposes of this section, the amount of the taxpayer’s assessable income of the year is to be calculated as if a pension the taxpayer receives at any time in the year were assessable income, if:
(a) the taxpayer receives the pension under:
(i) Part 2.3 or 2.5 of the Social Security Act 1991; or
(ii) Division 4 or 5 of Part III of the Veterans’ Entitlements Act 1986; and
(b) the pension payments are exempt payments under Subdivision 52‑A or 52‑B of the Income Tax Assessment Act 1997.
Division 2—Rebate in respect of certain benefits etc.
13 Amount of rebate
(1) For the purposes of subsection 160AAA(3) of the Act, the amount of the taxpayer’s rebate in respect of a year of income is ascertained in accordance with this section.
(3) The amount of the rebate is the amount worked out using the following formula, if the taxpayer’s rebatable benefit amount is greater than the threshold at the upper conclusion of the lowest marginal tax rate:
(4) The rebatable benefit amount is the amount of rebatable benefit included in the taxpayer’s assessable income of the year, rounded down to the nearest whole dollar.
(5) The amount worked out under subsection (2) or (3) must be rounded up to the nearest whole dollar, if the amount is not an amount of whole dollars.
Part 6—Returns and assessments
14 Amendment of assessments
For the purposes of a provision of the table in subsection 170(1) of the Act mentioned in column 1 of an item of the following table, the circumstance set out in column 2 of the item is prescribed in relation to amending an assessment of an entity (the assessed entity) for a year of income (the assessment year).
Note: If a circumstance in an item of the table exists, the Commissioner may amend the assessment within 4 years after the day on which the Commissioner gives notice of the assessment to the assessed entity, unless a longer amendment period applies.
Amendment circumstances
Item Column 1Provision of the table in subsection 170(1) of the Act Column 2Circumstance
1 (a) Paragraph (f) of item 1; or(b) paragraph (e) of item 2; or(c) paragraph (d) of item 3 All of the following apply:(a) there has been a transaction in the assessment year that:(i) involves associates; and(ii) has income tax consequences;(b) any of the following apply:(i) the parties were not dealing with each other at arm’s length in relation to the transaction;(ii) the transaction results in an amount of $200,000 or more being included in or allowable as a deduction from the assessable income of any of the parties in respect of the assessment year;(iii) the transaction involves one or more CGT events, and the sum of the capital proceeds from the events is $200,000 or more;(c) the transaction is relevant to an amount in the assessed entity’s assessment
2 (a) Paragraph (f) of item 1; or(b) paragraph (e) of item 2; or(c) paragraph (d) of item 3 All of the following apply:(a) a private company is taken to have paid a dividend to an entity, as described in section 109C, 109D, 109E or 109F of the Act, in the assessment year;(b) the entity is:(i) a shareholder of the company; or(ii) an associate of a shareholder of the company; or(iii) a former shareholder of the company; or(iv) an associate of a former shareholder of the company;(c) the period during which the Commissioner may amend an assessment in relation to the company is at least 4 years;(d) the dividend is relevant to an amount in the assessed entity’s assessment
3 (a) Paragraph (f) of item 1; or(b) paragraph (d) of item 3 All of the following apply:(a) the effect of section 109XB of the Act is that an amount is included as a dividend in the assessable income of:(i) a shareholder of a company; or(ii) an associate of a shareholder of a company; in the assessment year as described in subsection 109XA(1), (2) or (3) of the Act;(b) the period during which the Commissioner may amend an assessment in relation to both the trustee and the company is at least 4 years;(c) the dividend is relevant to an amount in the assessed entity’s assessment
4 (a) Paragraph (f) of item 1; or(b) paragraph (e) of item 2; or(c) paragraph (d) of item 3 Both of the following apply:(a) in the assessment year:(i) an entity acquired an ESS interest to which Subdivision 83A‑B of the Income Tax Assessment Act 1997 applies; and(ii) subsection 83A‑45(3) of that Act (integrity rule about share trading and investment companies) does not apply to the ESS interest; and(iii) the entity that provided the ESS interest is not a small business entity or medium business entity in relation to which item 2 or 3 of the table in subsection 170(1) of the Act applies;(b) the ESS interest is relevant to an amount in the assessed entity’s assessment
5 (a) Paragraph (f) of item 1; or(b) paragraph (e) of item 2; or(c) paragraph (d) of item 3 Both of the following apply in the assessment year:(a) the assessed entity has not identified income (ordinary or statutory) from one or more foreign transactions for the purposes of, or in the course of, an assessment;(b) the income has not been received from a resident investment vehicle
6 (a) Paragraph (f) of item 1; or(b) paragraph (e) of item 2; or(c) paragraph (d) of item 3 The sum of the amounts of assessable income from sources other than an Australian source (within the meaning of the Income Tax Assessment Act 1997) of the following for the assessment year is $200,000 or more:(a) the assessed entity;(b) an affiliate (within the meaning of that Act) of the assessed entity;(c) an entity that is connected with (within the meaning of that Act) the assessed entity
7 (a) Paragraph (e) of item 2; or(b) paragraph (d) of item 3 The assessed entity is, at any time in the assessment year:(a) a foreign controlled Australian entity (within the meaning of the Income Tax Assessment Act 1997); or(b) a non‑resident
8 (a) Paragraph (f) of item 1; or(b) paragraph (e) of item 2; or(c) paragraph (d) of item 3 Both of the following apply in the assessment year:(a) subsection 345(5) of the Act (transfer under a scheme) may be applicable to the assessed entity;(b) not all of the relevant information regarding the application of that subsection can be obtained from a resident investment vehicle
9 (a) Paragraph (f) of item 1; or(b) paragraph (e) of item 2; or(c) paragraph (d) of item 3 Both of the following apply:(a) paragraph 448(1A)(f) of the Act (provision of services under a scheme) may be applicable to the assessed entity;(b) not all of the relevant information regarding the application of that paragraph can be obtained from a resident investment vehicle
10 (a) Paragraph (f) of item 1; or(b) paragraph (e) of item 2; or(c) paragraph (d) of item 3 Any of the following provisions applies in relation to the assessed entity in the assessment year:(a) section 45A of the Act (streaming of dividends and capital benefits);(b) section 45B of the Act (schemes to provide certain benefits);(c) subsection 102AE(7) of the Act (excluded income for minors);(d) section 177DA of the Act (schemes that limit a taxable presence in Australia);(e) section 177E of the Act (stripping of company profits);(f) section 177EA of the Act (franking debit creation and franking credit cancellation schemes);(g) subsection 177J(1) of the Act (diverted profits tax);(h) Division 270 in Schedule 2F to the Act (scheme to take advantage of deductions);(i) subsection 26‑50(7) of the Income Tax Assessment Act 1997 (expenses for a leisure facility);(j) any of sections 165‑180 to 165‑205 (rules affecting the operation of tests for changing ownership of a company), or Division 175 (use of a company’s tax losses or deductions to avoid income tax), of the Income Tax Assessment Act 1997;(k) Subdivision 207‑F of the Income Tax Assessment Act 1997 (cancellation of gross‑up or tax offset where the imputation system has been manipulated)
11 Paragraph (f) of item 1 The assessed entity makes a request under section 131‑5 in Schedule 1 to the Taxation Administration Act 1953 in relation to any of the following:(a) an excess concessional contributions determination, or excess non‑concessional contributions determination, for a financial year that corresponds to the assessment year;(b) a notice of assessment of an amount of Division 293 tax payable for the assessment year
12 (a) Paragraph (e) of item 2; or(b) paragraph (d) of item 3 At any time during the assessment year, the total number of entities that are connected with (within the meaning of the Income Tax Assessment Act 1997), or are an affiliate of (within the meaning of that Act), the assessed entity is 10 or more
13 (a) Paragraph (e) of item 2; or(b) paragraph (d) of item 3 The assessed entity:(a) has claimed a tax offset under Division 355 of the Income Tax Assessment Act 1997 (research and development) for the assessment year; or(b) might be able to deduct an amount under a provision mentioned in subsection 355‑105(2) of that Act for the assessment year; or(c) has an amount that might be included in the assessed entity’s assessable income for the assessment year under section 355‑450 of that Act
14 (a) Paragraph (f) of item 1; or(b) paragraph (e) of item 2; or(c) paragraph (d) of item 3 Any of the following apply in the assessment year:(a) the assessed entity has chosen to obtain a roll‑over under Division 125 of the Income Tax Assessment Act 1997 (demerger relief);(b) there is a roll‑over under Subdivision 126‑B of that Act (companies in the same wholly‑owned group) in respect of which the assessed entity is the originating company or the recipient company mentioned in that Subdivision;(c) the assessed entity has chosen, or is taken to have chosen, to obtain a roll‑over under Division 615 of that Act (roll‑overs for business restructures)
15 (a) Paragraph (f) of item 1; or(b) paragraph (e) of item 2; or(c) paragraph (d) of item 3 The assessed entity disregarded a capital gain or capital loss in relation to the assessment year under section 855‑10 of the Income Tax Assessment Act 1997 (capital gains and losses of foreign residents)
Part 7—Public officers
15 Appointment of public officer
A notice mentioned in paragraph 252(1)(c) of the Act must include a declaration that any information in the notice is true and correct.
Part 8—Attribution of income in respect of controlled foreign companies
16 Interpretation
In this Part, words and phrases have the same meanings as they have in Part X of the Act.
17 Items of designated concession income
(1) For the purposes of paragraph (a) of the definition of designated concession income in subsection 317(1) of the Act, in relation to a listed country mentioned in column 1 of an item of the following table:
(a) the kind of income or profits to which columns 2, 3 and 4 of the item apply is specified; and
(b) the kind of feature mentioned in column 4 of the item is specified in relation to income or profits of that kind.
Designated concession income
Item Column 1Country Column 2Income or profits Column 3derived by … Column 4and that is …
1 Canada All passive income and tainted services income an entity that operates in Canada as an international banking centre under Canadian law not subject to tax in Canada in a tax accounting period
2 Canada All passive income a company that operates in Canada as an investment corporation, or as a mutual fund corporation, under Canadian tax law not taxed in Canada at the normal company tax rate
3 France All passive income a company that operates in France as a société d’investissement à capital variable (SICAV) under French law not subject to tax in France in a tax accounting period
4 France All income or profits a company that:(a) is treated as a resident of France for the purposes of the tax law of France; and(b) has elected to be taxed on a tonnage basis rather than on income or profits not used as the basis for establishing the amount of taxable income, taxable profits, tax base or tax liability of the entity under the tax law of France
5 Germany All passive income in carrying on business outside Germany at or through a permanent establishment a company that is treated as a resident of Germany for the purposes of the tax law of Germany not subject to tax in Germany in a tax accounting period
6 Germany Ordinary capital gains in respect of shares in companies either:(a) a company that is treated as a resident of Germany for the purposes of the tax law of Germany; or(b) any company in carrying on business in Germany at or through a permanent establishment of the company in Germany not taxed in Germany at the normal company tax rate
7 Germany All income or profits a company that:(a) is treated as a resident of Germany for the purposes of the tax law of Germany; and(b) has elected to be taxed on a tonnage basis rather than on income or profits not used as the basis for establishing the amount of taxable income, taxable profits, tax base or tax liability of the entity under the tax law of Germany
8 Japan All income or profits derived from Japanese governmental bonds an entity in carrying on business in Japan at or through a permanent establishment of the entity in that country not subject to tax in Japan in a tax accounting period
9 New Zealand Ordinary capital gains in respect of tainted assets either:(a) a company that is treated as a resident of New Zealand for the purposes of the tax law of New Zealand; or(b) any entity in carrying on business in New Zealand at or through a permanent establishment of the entity in New Zealand not subject to tax in New Zealand in a tax accounting period
10 United Kingdom Ordinary capital gains in respect of shares in companies if:(a) the CGT assets of the companies; or(b) the underlying CGT assets of the companies held through one of more non‑resident entities that are associates;include CGT assets having the necessary connection with Australia a company that is treated as a resident of the United Kingdom for the purposes of the tax law of the United Kingdom not subject to tax in the United Kingdom in a tax accounting period as a consequence of the substantial shareholding exemption available under the tax law of the United Kingdom
11 United Kingdom All income or profits a company that:(a) is treated as a resident of the United Kingdom for the purposes of the tax law of the United Kingdom; and(b) has elected to be taxed on a tonnage basis rather than on income or profits not used as the basis for establishing the amount of taxable income, taxable profits, tax base or tax liability of the entity under the tax law of the United Kingdom
12 United Kingdom All passive income an entity that operates in the United Kingdom as an open‑ended investment company under the law of the United Kingdom not taxed in the United Kingdom at the normal company tax rate
13 United States of America All income or profits derived from tax‑exempt governmental bonds either:(a) a company that is treated as a resident of the United States of America for the purposes of the tax law of the United States of America; or(b) any entity in carrying on business in the United States of America at or through a permanent establishment of the entity in that country not subject to tax in the United States of America in a tax accounting period
14 United States of America All passive income an entity that operates in the United States of America as a regulated investment company under the tax law of the United States of America not taxed in the United States of America at the normal company tax rate
Note: Section 324 of the Act explains the meaning of the expression subject to tax. Section 325 of the Act explains when taxation occurs in a country at the country’s normal company tax rate.
(2) In this section:
ordinary capital gains means gains or profits of a capital nature that:
(a) arise from the sale or disposal of all or part of a CGT asset; and
(b) are not gains or profits that would not be capital gains but for a provision of Australian tax law.
permanent establishment, in relation to an entity that carries on business in a listed country:
(a) if:
(i) there is a double tax agreement in relation to the country; and
(ii) section 23AH of the Act applies to the entity;
has the same meaning as in the agreement; or
(b) otherwise—has the meaning given by subsection 6(1) of the Act.
Passive income
(3) For the purposes of working out, in applying subsection (1) to income derived by an entity, whether the income is passive income of the entity:
(a) the reference in paragraph 446(1)(k) of the Act to net gains that accrued to the company in the statutory accounting period in respect of the disposal of tainted assets is treated as being a reference to capital gains that accrued to the company in the statutory accounting period in respect of tainted assets; and
(b) if section 23AH of the Act (about foreign branch income of Australian companies) applies to the entity—each reference, as appropriate, in Part X of the Act to a statutory accounting period is treated as a reference to a year of income; and
(c) if Division 6AAA of Part III of the Act (about non‑resident trust estates) applies to the entity:
(i) each reference, as appropriate, in Part X of the Act to a company is treated as being a reference to the entity; and
(ii) each reference, as appropriate, in Part X of the Act to a statutory accounting period is treated as being a reference to a year of income.
18 Accruals tax laws
For the purposes of the definition of accruals tax law in subsection 317(1) of the Act, in relation to a listed country mentioned in column 1 of an item of the following table, the law mentioned in column 2 of the item is declared to be an accruals tax law.
Accruals tax law
Item Column 1Listed country Column 2Law
1 Canada Sections 90 to 95 (inclusive) of the Income Tax Act of Canada
2 France Article 209B of the General Tax Code of France
3 Germany Sections 7 to 14 (inclusive) of the Foreign Tax Act of Germany
4 Japan Articles 40‑4 to 40‑6 (inclusive) and 66‑6 to 66‑9 (inclusive) of the Special Taxation Measures Law of Japan
5 New Zealand Sections CQ 1 to CQ 3 (inclusive) and sections EX 1 to EX 27 (inclusive) of the Income Tax Act 2007 of New Zealand
6 United Kingdom Part 9A of the Taxation (International and Other Provisions) Act 2010 of the United Kingdom
7 United Kingdom Chapter 3A of Part 2 of the Corporation Tax Act 2009 of the United Kingdom
8 United States of America Subpart F of Part III of subchapter N of Chapter 1 of the Internal Revenue Code of the United States of America
19 Listed countries
For the purposes of the definition of listed country in subsection 320(1) of the Act, each of the following is declared to be a listed country for the purposes of Part X of the Act:
(a) Canada;
(b) France;
(c) Germany;
(d) Japan;
(e) New Zealand;
(f) United Kingdom;
(g) United States of America.
20 Capital gains regarded as subject to tax
(1) For the purposes of subsection 324(2) of the Act, gains or profits, or other amounts, of a capital nature derived by an entity that:
(a) are not subject to tax in a listed country in a particular tax accounting period; and
(b) would have been subject to tax in the listed country in the tax accounting period apart from the availability of roll‑over relief;
are to be treated, for the purposes of Part X of the Act, as if they were subject to tax in the listed country in the tax accounting period.
(2) For the purposes of paragraph 324(2)(b) of the Act, the feature mentioned in paragraph (1)(b) of this section is specified in relation to the gains or profits.
Meaning of roll‑over relief
(3) Roll‑over relief is the deferral of tax liability in the tax accounting period under a tax law of the listed country because of a circumstance specified in subsection (4), (6), (7) or (8).
(4) For the purposes of subsection (3), the circumstance is that an entity:
(a) is taken to have disposed of all or part of a CGT asset because of an act, transaction or event as a result of which the entity has received an amount of money or a replacement CGT asset:
(i) by way of compensation for the compulsory acquisition, or for the loss or destruction, of the original CGT asset; or
(ii) under a policy of insurance against the risk of loss or destruction of the original CGT asset; and
(b) after receiving an amount of money mentioned in paragraph (a), in order to achieve a deferral of tax liability under the tax law of the listed country, is required:
(i) to incur expenditure in acquiring a CGT asset in place of the original CGT asset; or
(ii) to incur expenditure of a capital nature in repairing or restoring the original CGT asset.
(5) A compulsory acquisition, of a CGT asset, is a compulsory acquisition of that asset by:
(a) the government of a country, whether a federal, State or municipal government (however described); or
(b) an authority of such a government.
(6) For the purposes of subsection (3), the circumstance is that a company disposes of a CGT asset to another company, and the transferee is a member of the same wholly‑owned group (within the meaning of the Income Tax Assessment Act 1997) as the transferor.
(7) For the purposes of subsection (3), the circumstance is that:
(a) a company redeems or cancels all the shares of a particular class in the company; and
(b) an entity holds shares of that class in the company; and
(c) the company issues to the entity other shares in the company in substitution for the redeemed or cancelled shares; and
(d) the market value of the new shares immediately after they were issued is not less than the market value of the redeemed or cancelled shares immediately before the redemption or cancellation; and
(e) the entity did not receive any consideration (other than the new shares) in respect of the redemption or cancellation.
(8) For the purposes of subsection (3), the circumstance is that:
(a) an entity owns an option to acquire shares in a company or a right, issued by a company, to acquire shares in the company or to acquire an option to acquire shares in the company; and
(b) any of the shares:
(i) are consolidated and divided into new shares of a larger amount; or
(ii) are subdivided into shares of a smaller amount; and
(c) as a result of the consolidation or subdivision:
(i) the original option is cancelled; or
(ii) the original right is cancelled; and
(d) the company issues to the entity:
(i) another option relating to the new shares in substitution for the original option; or
(ii) another right relating to the new shares, in substitution for the original right; and
(e) the market value of the new option or the new right, immediately after it was issued, is not less than the market value of the original option or original right immediately before its cancellation; and
(f) the entity did not receive any consideration in respect of the cancellation, other than the new option or right.
21 State foreign taxes that are treated as federal foreign taxes
For the purposes of section 323 of the Act, a foreign tax imposed in Switzerland that is a cantonal tax on income referred to in paragraph 3(b) of Article 2 of the Swiss convention (within the meaning of the International Tax Agreements Act 1953) is to be treated, for the purposes of Part X of the Act, as if it were an additional federal foreign tax of Switzerland.
Part 9—Application and transitional provisions
Division 1—Transitional matters relating to the repeal of the Income Tax Assessment (1936 Act) Regulation 2015
22 Definitions
In this Division:
commencement time means the time this instrument commences.
old regulations means the Income Tax Assessment (1936 Act) Regulation 2015.
repealing regulations means the Treasury Laws Amendment (Income Tax Assessment Repeal and Consequential Amendments) Regulations 2025.
23 This instrument generally applies to a year of income starting at or after the commencement time
(1) Subject to this Division, this instrument applies in relation to a year of income starting at or after the commencement time.
(2) Subject to this Division, despite the repeal of the old regulations by the repealing regulations, the old regulations continue to apply in relation to a year of income starting before the commencement time as if the repeal had not happened.