Taxation Administration Act 1974

TAXATION ADMINISTRATION ACT 1974

No. 133 of 1974

An Act to amend the Taxation Administration Act 1953-1973.

BE IT ENACTED by the Queen, the Senate and the House of Representatives of Australia, as follows: —

Short title and citation.

1. (1) This Act may be cited as the Taxation Administration Act 1974.

(2) The Taxation Administration Act 1953-1973 is in this Act referred to as the Principal Act.

(3) The Principal Act, as amended by this Act, may be cited as the Taxation Administration Act 1953-1974.

Commencement.

2. Sections 1 and 2 shall come into operation on the day on which this Act receives the Royal Assent, and the remaining sections of this Act shall come into operation on such date as is, or such respective dates as are, fixed by Proclamation.

Heading of Part I.

3. Before section 1 of the Principal Act the following heading is inserted:—

“PART I—PRELIMINARY”.

Heading of Part II.

4. Before section 4 of the Principal Act the following heading is inserted:—

“PART II—COMMISSIONER OF TAXATION, SECOND COMMISSIONERS OF TAXATION AND DEPUTY COMMISSIONERS OF TAXATION”.

Tenure of Commissioner and Second Commissioners.

5. Section 5 of the Principal Act is amended by omitting sub-section (6).

6. After section 5 of the Principal Act the following section is inserted:—

Remuneration and allowances of Commissioner and Second Commissioners

“5a. (1) The Commissioner of Taxation and the Second Commissioners of Taxation shall be paid such remuneration as is determined by the Remuneration Tribunal but, if no determination of that remuneration by the Tribunal is in operation, they shall be paid remuneration at the respective rates that were applicable immediately before the commencement of this section.

“(2) The Commissioner of Taxation and the Second Commissioners of Taxation shall be paid such allowances as are prescribed.

“(3) This section has effect subject to the Remuneration Tribunals Act 1973-1974.”.

Delegation.

7. Section 8 of the Principal Act is amended by inserting in sub-section (1), after the words “functions under”, the words “this Act or”.

Heading of Part III.

8. Before section 9 of the Principal Act the following heading is inserted: —

“PART III—VALUATION BOARDS”.

9 (1) Section 11 of the Principal Act is repealed and the following section substituted: —

Remuneration and allowances of members.

“11. (1) The Chairman and the other members of a Valuation Board shall be paid such remuneration as is determined by the Remuneration Tribunal but, if no determination of that remuneration by the Tribunal is in operation, they shall be paid remuneration at the respective rates that were applicable immediately before the commencement of this section.

“(2) The Chairman and the other members of a Valuation Board shall be paid such allowances as are prescribed.

“(3) This section has effect subject to the Remuneration Tribunals Act 1973-1974.”.

(2) Subject to any regulations made for the purposes of sub-section (2) of section 11 of the Principal Act as amended by this Act, the Chairman and the other members of a Valuation Board shall be paid allowances at the respective rates that were applicable immediately before the commencement of this section.

10. After section 14 of the Principal Act the following Part is added:—

“PART IV—EXCHANGE CONTROL—TAXATION CERTIFICATES

Definitions.

“14a. In this Part, unless the contrary intention appears—

‘Australian tax’ means tax imposed by a law of Australia or of a Territory;

‘Board of Review’ means a Board of Review constituted under the Income Tax Assessment Act 1936-1974;

‘Commissioner’ means the Commissioner of Taxation;

‘Deputy Commissioner’ means a Deputy Commissioner of Taxation;

‘tax clearance certificate’ or ‘certificate’ means a certificate issued under section 14c;

‘Reserve Bank’ or ‘Bank’ means the Reserve Bank of Australia;

‘Second Commissioner’ means a Second Commissioner of Taxation;

‘taxation law’ means a law of Australia or of a Territory imposing a tax or otherwise dealing with Australian tax.

Applications for issue of certificates.

“14b. Where—

(a) a person proposes to do an act or thing the doing of which, without the authority of the Reserve Bank, is prohibited by regulations made under section 39 of the Banking Act 1959-1974; and

(b) by virtue of paragraph (a) of sub-section (1) of section 39b of that Act, the Bank is not permitted to grant that authority unless there is produced to the Bank, in respect of that act or thing, a certificate issued under section 14c of this Act, or the Bank has, under paragraph (b) of sub-section (1) of section 39b of the Banking Act 1959-1974, refused to grant that authority unless there is produced to the Bank such a certificate,

the person may apply in writing to the Commissioner for the issue of a tax clearance certificate under section 14c of this Act in respect of that act or thing.

Issue of certificates.

“14c. (1) Where—

(a) application is made to the Commissioner under section 14b for the issue of a tax clearance certificate in respect of an act or thing proposed to be done by the applicant; and

(b) the Commissioner is not authorized by section 14d to refuse to issue the certificate or, if he is so authorized, he is of the opinion that it is not necessary, for the purpose of protecting the revenue of Australia, to withhold the issue of the certificate,

then, subject to sub-section (2), the Commissioner shall issue the certificate.

“(2) The Commissioner may, before issuing a certificate under sub-section (1), require the applicant, or any other person or persons, to give to the Commissioner such undertaking or such undertakings in relation to the proposed act or thing as the Commissioner considers necessary for the purpose of protecting the revenue of Australia, being an undertaking or undertakings which the Commissioner is satisfied will be carried out.

“(3) The Commissioner may require any person who gives, or any persons who give, an undertaking for the purposes of sub-section (2) to agree to pay to Australia in the event of a breach of the undertaking such amount as is specified in, or is to be ascertained in accordance with, the undertaking and, if a court is satisfied that a breach of the undertaking given for the purposes of sub-section (2) has occurred, the court may order the person, or all or any of those persons, as the case may be, to pay to Australia, as a debt due to Australia, such amount, not exceeding the amount so specified or to be ascertained, as the court determines to be appropriate having regard to all relevant matters, including the nature of the undertaking, the nature and extent of the breach, the cir­cumstances in which the breach took place and the nature and extent of any benefit or advantage in relation to the application or operation of a taxation law which will be, or may reasonably be expected to be, received or obtained, or has been, or could reasonably have been expected to have been, received or obtained, by that person, by one or more of those persons, or by any other person, as a result or by virtue of the breach.

“(4) A court may, for the purposes of sub-section (3), treat a person as a person who will receive or obtain or has received or obtained, as a result or by virtue of a breach of an undertaking, a benefit or advantage in relation to the application or operation of a taxation law, being a taxation law with respect to a tax on incomes, if the person has not become, or could not reasonably be expected to have become, or will not become, or may not reasonably be expected to become, liable to pay tax or the liability of the person to pay tax has been, or could reasonably be expected to have been, or will be, or may reasonably be expected to be, reduced, by reason that—

(a) the person has not, or could not reasonably be expected to have, derived, or will not, or may not reasonably be expected to, derive income that the person would have, or could reasonably be expected to have, derived, or will, or could reasonably be expected to, derive, if the breach had not taken place; or

(b) the person has, or could reasonably be expected to have, incurred, or will, or may reasonably be expected to, incur, a loss or outgoing that the person would not have, or could not reason­ably be expected to have, incurred, or will not, or may not reasonably be expected to, incur, if the breach had not taken place,

but this sub-section shall not be taken as limiting the generality of sub-section (3).

“(5) The Commissioner may institute a proceeding in any court, being a court having jurisdiction in proceedings for the recovery of debts up to an amount of not less than the amount that could be recovered in that proceeding, for the recovery on behalf of Australia of a debt refer­red to in sub-section (3).

Grounds on which issue of certificates may be refused.

“14d. (1) Where application is made to the Commissioner under section 14b for the issue of a tax clearance certificate in respect of an act or thing proposed to be done by the applicant, the Commissioner may refuse to issue the certificate if the applicant does not satisfy the Com­missioner that the act or thing will not, or may not reasonably be expected to, involve or assist in, or be associated with, the avoidance or evasion, whether in Australia or elsewhere, of Australian tax by the applicant or by another person and, without limiting the generality of the foregoing, does not satisfy the Commissioner that—

(a) a person (whether or not the applicant), either alone or in association with another person and whether in Australia or elsewhere, as a result or by virtue of the doing of the proposed act or thing or of an associated act or thing proposed to be done or done—

(i) will not, or may not reasonably be expected to, receive or obtain; or

(ii) has not, or could not reasonably be expected to have, received or obtained,

a benefit or advantage in relation to the application or operation of a taxation law, and the act or thing, or the associated act or thing—

(iii) would not be done, or could not reasonably be expected to be done, or done in the same form or in the same way; or

(iv) would not have been done, or could not reasonably have been expected to have been done, or done in the same form or in the same way,

but for that benefit or advantage; and

(b) as a result or by virtue of the doing of the proposed act or thing or an associated act or thing proposed to be done or done, an amount of Australian tax that will become, or may reasonably be expected to become, or has become, or could reasonably be expected to have become, payable will not be, or may not reasonably be expected to be, or has not been, or could not reasonably be expected to have been, able to be collected.

“(2) A person may, for the purposes of sub-section (1), be treated as a person who will receive or obtain or has received or obtained, as a result or by virtue of the doing of an act or thing, a benefit or advantage in relation to the application or operation of a taxation law, being a taxation law with respect to a tax on incomes, if the person has not become, or could not reasonably be expected to have become, or will not become, or may not reasonably be expected to become, liable to pay tax or the liability of the person to pay tax has been, or could reasonably be expected to have been, or will be, or may reasonably be expected to be, reduced, by reason that—

(a) the person has not, or could not reasonably be expected to have, derived, or will not, or may not reasonably be expected to, derive income that the person would have, or could reasonably be expected to have, derived, or will, or could reasonably be expected to, derive, if the act or thing had not been, or were not, done; or

(b) the person has, or could reasonably be expected to have, incurred, or will, or may reasonably be expected to, incur, a loss or outgoing that the person would not have, or could not reason­ably be expected to have, incurred, or will not, or may not reasonably be expected to, incur, if the act or thing had not been, or were not, done,

but this sub-section shall not be taken as limiting the generality of sub-section (1).

“(3) For the purposes of this section—

(a) the Commissioner may have regard to arrangements, understandings and practices not having legal force in the same manner as if they had legal force; and

(b) the fact that an act or thing is, forms part of or relates to an ordinary commercial or family dealing is irrelevant.

“(4) Where the Commissioner refuses to issue a tax clearance certificate, he shall cause to be served on the applicant for the issue of the certificate notice of the refusal.

Powers and functions of a Second Commissioner of Taxation.

“14e. (1) A Second Commissioner has all the powers and may perform all the functions of the Commissioner under this Part.

“(2) The exercise of a power or the performance of a function of the Commissioner under this Part by a Second Commissioner does not prevent the exercise of that power or the performance of that function by the Commissioner.

“(3) The Commissioner has, in relation to an act of a Second Commissioner, the same powers as if that act were done by himself.

“(4) Where, under this Part, the exercise of a power or the performance of a function is dependent upon the opinion, belief or state of mind of the Commissioner in relation to a matter, that power may be exercised or that function performed by a Second Commissioner upon the opinion, belief or state of mind of that Second Commissioner in relation to that matter.

“(5) A reference in this Part to the Commissioner shall be deemed to include, in respect of matters as to which a Second Commissioner has exercised a power or performed a function of the Commissioner conferred upon him by this Part, a reference to that Second Commissioner.

Secrecy.

“14f. (1) In this section, unless the contrary intention appears, ‘officer’ means—

(a) a person who is or has been appointed or employed in the service of Australia; or

(b) any person to whom powers or functions have been delegated by the Commissioner under this Act,

and who, by reason of that appointment or employment or in the course of that employment, or by reason of, or in the course of carrying out powers and functions under, the delegation, as the case may be, may acquire or has acquired information with respect to the affairs of any other person disclosed or obtained under this Part.

“(2) Subject to this section, an officer shall not, either directly or indirectly, except for the purposes of this Part or otherwise in the performance of his duties as an officer, and either while he is, or after he ceases to be, an officer, make a record of, or divulge or communicate to any person, any information acquired by him by reason of, or in the course of, carrying out powers or functions under this Part, with respect to the affairs of any other person disclosed or obtained under this Part.

Penalty: $1,000 or imprisonment for 1 year.

“(3) An officer shall not be required to produce in court any application, certificate, undertaking or other document made or given under or for the purposes of this Part, or to divulge or communicate to a court a matter or thing that has come to his notice in the performance of his duties as an officer under this Part, except when it is necessary to do so for the purpose of carrying into effect the provisions of this Part.

“(4) Nothing in this section prevents the Commissioner, a Second Commissioner, a Deputy Commissioner or a person authorized by the Commissioner, a Second Commissioner or a Deputy Commissioner, from communicating any information to—

(a) a Board of Review; or

(b) a person performing, as an officer, a function or duty arising under an Act administered by the Commissioner, for the purpose of enabling that person to carry out that function or duty.

“(5) Any person to whom information is communicated under sub-section (4) and any other person under his control are, in respect of that information, entitled to rights and privileges and subject to obligations and liabilities under sub-sections (2) and (3) as if they were officers.

“(6) An officer shall, if and when required by the Commissioner, a Second Commissioner or a Deputy Commissioner to do so, make an oath or declaration, in a manner and form approved by the Commissioner, to maintain secrecy in conformity with the provisions of this section.

“(7) Any reference in a provision of an Act administered by the Commissioner, being a provision that relates to the observing of secrecy by persons who are officers for the purposes of that provision, to any other Act administered by the Commissioner shall be read as including a reference to this Part.

Objections.

“14g. (1) Where an application is made under section 14b for the issue of a tax clearance certificate and the application is refused, the applicant may, within 60 days after service on him of notice of the refusal, post to or lodge with the Commissioner an objection in writing against the refusal stating fully and in detail the grounds on which he relies.

“(2) The Commissioner shall consider the objection, and may either disallow it or allow it.

“(3) The Commissioner shall cause to be served on the objector notice of his decision.

“(4) A person who is dissatisfied with the decision of the Commissioner on an objection by that person may, within 60 days after service on him of notice of that decision, request the Commissioner, in writing, to refer the decision to a Board of Review for review.

References to Board of Review and appeals to High Court.

“14h. (1) Where a person has, in accordance with sub-section (4) of section 14g, requested the Commissioner to refer a decision to a Board of Review, the Commissioner shall, if the person’s request is accompanied by a fee of $2, refer the decision to a Board of Review as soon as is practicable after receipt of the request.

“(2) On the review—

(a) the person who made the request is limited to the grounds stated in his objection; and

(b) the burden of proving that the issue of a tax clearance certificate should not have been refused lies on that person.

“(3) A Board of Review has power to review a decision referred to it under sub-section (1), and for the purpose of reviewing such a decision, a Board of Review has all the powers and functions of the Commissioner under this Part in relation to an application made under section 14b for the issue of a tax clearance certificate, and the Board may confirm the decision of the Commissioner or give directions to the Commissioner to issue a tax clearance certificate, being directions which may specify any undertaking or undertakings to be given for the purposes of sub-section (2) of section 14c.

“(4) Upon the request of the Commissioner or the person who requested the review, the Board shall, when giving its decision, state in writing its findings of fact and its reasons in law for the decision.

“(5) The Commissioner, or a person who requested a review by a Board of Review, may appeal to the High Court from a decision of the Board under this section that involves a question of law, and a Board of Review shall, upon application by the Commissioner or such a person, refer to the High Court any question of law arising before the Board of Review in the course of the review.

“(6) The decision of the High Court on such an appeal or reference is final and conclusive.

“(7) If a tax clearance certificate is issued as a result of a reference to a Board of Review under sub-section (1) (whether or not there is an appeal or reference to the High Court under sub-section (5)), the fee paid in accordance with sub-section (1) in respect of the reference to the Board of Review shall be refunded to the person who requested the review.

Commissioner may obtain information and evidence.

“14i. (1) For the purposes of this Part, the Commissioner may, by notice in writing, require any person, whether an applicant for a certificate or not, including any officer employed in or in connexion with any department of a government or by any public authority—

(a) to furnish the Commissioner with such information as the Commissioner requires;

(b) to attend before the Commissioner, or before an officer authorized by the Commissioner for the purpose, at a time and place specified in the notice, and then and there answer questions; and

(c) to produce to the Commissioner any books, documents and other papers in the custody or under the control of the person.

“(2) The Commissioner may cause copies to be made of, or extracts to be taken from, any books, documents or other papers which are produced to the Commissioner in pursuance of paragraph (c) of sub-section (1).

“(3) A person, not being the applicant for the issue of a tax clearance certificate, who, in relation to an application for the issue of a certificate, is required in pursuance of paragraph (b) of sub-section (1) to attend before the Commissioner or an officer authorized by the Commissioner is entitled to payment of an allowance in respect of his expenses of an amount determined by the Commissioner in accordance with the regulations.

Access to books, &c.

“14j. (1) For the purposes of this Part, an officer authorized by the Commissioner to exercise powers under this section—

(a) may, at all reasonable times, enter upon any land;

(b) shall have full and free access at all reasonable times to all books, documents and other papers; and

(c) may take extracts from, and make copies of, any books, documents or other papers.

“(2) An officer who enters upon land in pursuance of sub-section (1) is not authorized to remain on the land if, on request by the occupier of the land, he does not produce a certificate issued by the Commissioner certifying that he is an officer authorized to exercise powers under sub-section (1).

“14k. (1) A person who—

Offences.

(a) fails or neglects to comply with a requirement of the Commissioner as and when required under sub-section (1) of section 14i;

(b) without just cause or excuse shown by him, refuses or neglects to attend and answer questions when required by the Commissioner or an officer authorized by him, or to answer truly and fully any questions put to him, or to produce a book, document or other paper required of him, by the Commissioner or any such officer; or

(c) makes in, or in connexion with, an application under section 14b a statement that is false or misleading in a material particular, or makes a false or misleading answer, whether orally or in writing, to a question put to him by the Commissioner or an officer authorized by the Commissioner,

is guilty of an offence punishable, on conviction, by a fine not exceeding $500 or imprisonment for a period not exceeding 6 months.

“(2) Upon the conviction of a person for an offence against paragraph (a) or (b) of sub-section (1), the court may order him, within a time specified in the order, to do the act which he has failed, refused or neglected to do, and a person who does not comply with such an order is guilty of an offence punishable, on conviction, by a fine not exceeding $1,000 or imprisonment for a period not exceeding 1 year.

“(3) An order under sub-section (2) may be given orally by the court to the defendant, or may be in writing and served in such manner as is prescribed.

Application of Part outside Australia.

“14l. This Part applies both within and without Australia.

Jurisdiction of courts.

“14m. (1) A provision of the Judiciary Act 1903-1973 by which a court of a State is invested with jurisdiction with respect to offences against the laws of Australia has effect, in relation to offences against this Part not committed within any State, as if that jurisdiction were so invested without limitation as to locality.

“(2) Subject to the Constitution, jurisdiction is conferred on the several courts of a Territory, within the limits of their several jurisdictions other than limits as to locality, with respect to offences against this Part not committed within a State or within another Territory.

“(3) The trial on indictment of an offence against this Part not committed within a State may be held by a court of competent jurisdiction at any place where the court may sit.

Notices.

“14n. A notice that is required or permitted by this Part, or the regulations made for the purposes of this Part, to be given to or served on a person by the Commissioner may, without prejudice to any other method of service, be given or served personally, or by post addressed to the person at his place of residence or business last known to the Commissioner or at an address that, under the regulations, is his address for service for the purposes of this Part.

Report by Commissioner.

“14o. (1) The Commissioner shall furnish to the Treasurer annually for presentation to the Parliament a report on the operation of this Part.

“(2) In the report the Commissioner shall draw attention to any breaches or evasions of this Part, or breaches of undertakings given for the purposes of sub-section (2) of section 14c, which have come under his notice.”.

11. Section 15 of the Principal Act is repealed and the following heading and section substituted:

“PART V—MISCELLANEOUS

Rights of public servant preserved.

“15. If the Commissioner of Taxation, a Second Commissioner of Taxation or a member of a Valuation Board was, immediately before his appointment, an officer of the Australian Public Service or a person to whom the Officers’ Rights Declaration Act 1928-1973 applied—

(a) he retains his existing and accruing rights;

(b) for the purpose of determining those rights, his service as the Commissioner of Taxation, a Second Commissioner of Taxation or a member of a Valuation Board shall be taken into account as if it were service in the Australian Public Service; and

(c) the Officers’ Rights Declaration Act 1928-1973 applies as if this Act and this section had been specified in the Schedule to that Act.”.

12. After section 17 of the Principal Act the following section is inserted:—

Regulations.

“18. The Governor-General may make regulations, not inconsistent with this Act, prescribing all matters which by this Act are required or permitted to be prescribed, or which are necessary or convenient to be prescribed for giving effect to this Act, and, in particular, prescribing penalties, by way of fines not exceeding $250, for offences against the regulations.”.