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On 21 November 2011, Tax Laws Amendment (2011 Measures No 8) Bill 2011 was passed by the House of Representatives with 2 Government amendments.

According to the Supplementary Explanatory Memorandum, amendments 1 and 2 to the Bill omit Schedule 3 (Companies’ non-compliance with PAYG withholding and superannuation guarantee obligations) and related provisions from the Bill.

This follows the report of the House Economics Committee, which held a hearing about this aspect of the Bill. In its report to the House, it said:

" the hearing business groups expressed concerns about the provisions because they wanted to ensure that honest company directors would not be caught up in them by accident. The committee accepts that directors who act in good faith should have some comfort that they will not be subject to the provisions. The committee recommended that the Government investigate whether the Bills should specifically target phoenix operators and whether the defences in the Bill should be expanded.

Because of the work involved in this, the committee has recommended that Schedule 3 of the Tax Laws Amendment (2011 Measures No 8) Bill 2011, which contains the phoenixing provisions, should be deleted so that the remainder of the Bill may pass. The Pay As You Go Withholding Non-Compliance Tax Bill 2011 should remain pending while the Government completes its investigations."

The other provisions of the Bill which remain are as follows:

SCHEDULE 1 to the Bill amends the ITAA 1997 to provide the Commissioner of Taxation with discretion to disregard certain events (for example, when a beneficiary becomes insolvent) that would otherwise trigger the assessment of certain income for a primary production trust, in the year of the event. These amendments will apply to the 2005-06 income year and later income years.

SCHEDULE 2 to the Bill amends the Petroleum Resource Rent Tax Assessment Act 1987 to provide certainty regarding how the 'taxing point' is determined for the purposes of the Petroleum Resource Rent Tax (PRRT). The taxing point is central to the determination of PRRT liabilities, and was recently considered by the Federal Court in Esso Australia Resources Pty Ltd v The Commissioner for Taxation [2011] FCA 360. These amendments provide statutory reinforcement of the Federal Court's decision, affirming the long-established application of the PRRT law. Date of effect: 1 July 1990.

SCHEDULE 4 to the Bill makes minor consequential amendments to the taxation arrangements for gaseous fuels. The changes ensure that the legislation applies as intended and does not impose excessive compliance costs on industry. These amendments apply from 1 December 2011.

On 23 November 2011, the Bill was passed by the Senate without amendment.

The Bill now awaits Royal Assent.


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