Income Tax Regulations 1936

This regulation provides the technical details supporting Australia’s main income tax law (the Income Tax Assessment Act 1936). It covers five key areas:

1. Tax exemptions for service personnel It specifies exactly which military operations (such as Operation Accordion, Operation Okra, and Operation Manitou) and peacekeeping duties qualify for tax exemptions. It maps out precise geographic areas—including specific latitudes and longitudes—and the exact date ranges of service that are eligible.

2. Extended time limits for tax assessments Normally, the Tax Office has four years to amend a tax assessment. This regulation lists nine specific circumstances where that limit can be extended, such as when companies undertake transactions with related parties (associates) that are not at arm’s length (independent), when private companies are deemed to pay dividends to shareholders, or when taxpayers fail to report foreign income from certain transactions.

3. Tax rebates for pensioners and low-income seniors It sets out the mathematical formulas used to calculate tax rebates for aged persons and pensioners. These rules determine how much rebate a person can claim based on whether they are single, part of a couple, or illness-separated. Crucially, it allows unused rebates to be transferred between spouses or from trustees to beneficiaries, with specific income thresholds ($2,230 for singles, $1,602 for couples, etc.) and taper rates (reducing by 12.5 cents for every dollar over the threshold).

4. Foreign income and controlled foreign companies (CFCs) It defines which foreign countries are “listed countries” for the CFC rules, what counts as “designated concession income” (income that receives tax breaks in foreign jurisdictions), and when capital gains made overseas are treated as having been taxed. It also recognises specific foreign tax laws (from Canada, France, Germany, Japan, New Zealand, the UK, and the US) as comparable to Australia’s CFC regime.