Suggest a correction

Treatment of unabsorbed donations attributable to exempt income

Income Tax Act 1947

What needs fixing?

Wrong or mistyped textWrong structure or numberingWrong title or detailsDuplicated content

Proposed text

—(1) If —(a)any donation allowable under this Act for the year of assessment 2012 or any preceding year of assessment (called in this section the attributed donation) is to be deducted from any income of a company under a provision of this Act or the Economic Expansion Incentives (Relief from Income Tax) Act 1967 in determining the amount of its income that is exempt from tax under that provision for that or any subsequent year of assessment; and(b)part or all of the attributed donation (called in this section the balance) has yet to be fully deducted in determining the amount of income that is exempt from tax for the year of assessment 2012,then the following provisions apply to the balance:(c)subject to paragraphs (e) to (i) and subsection (2), the balance is to be deducted from the statutory income of the company for the year of assessment 2013;(d)subject to paragraphs (e) to (i) and section 37B as in force immediately before 7 December 2020, where the deduction under paragraph (c) cannot be made or fully made, the balance is to be deducted from the statutory income of the company for the year of assessment 2014, and so on;(e)any balance not deducted against the statutory income of the company for the fifth year of assessment after the year of assessment relating to the basis period in which the donation was made must be disregarded;(f)for the purposes of paragraphs (c) and (d), any donation made on an earlier date is deemed to have been deducted first;(g)where the part of the balance that may be deducted under paragraph (c) against any type of income in accordance with subsection (2) has been so deducted and a sum remains of that part of the balance after such deduction, a deduction under paragraph (d) of the sum that so remains, or any sum that remains after one or more applications of this paragraph, is to be made in the following manner:(i)the sum is first to be deducted against the same type of income;(ii)any sum remaining after that deduction is to be deducted against any other type of income in accordance with section 37B of this Act in force immediately before 7 December 2020;(h)despite paragraphs (c) and (d), the balance must be disregarded if the Comptroller is not satisfied that the shareholders of the company on the last day of the year in which the donation was made, were substantially the same as the shareholders of the company on the first day of the year of assessment in which the balance would otherwise be deductible; and(i)section 37(13) to (17) applies, with the necessary modifications, for the purposes of paragraph (h).(2) The deduction under subsection (1)(c) is to be made in accordance with the following provisions:(a)section 37B of this Act in force immediately before 7 December 2020 does not apply to the deduction;(b)if the company only derives normal income for that year of assessment, the balance is to be deducted against the normal income for that year of assessment;(c)if the company only derives concessionary income for that year of assessment, the balance is to be deducted against the concessionary income for that year of assessment;(d)if the company derives both normal income and concessionary income, or concessionary income that is subject to tax at different concessionary rates of tax, for that year of assessment, the balance is to be deducted against each type of income in such proportion as appears reasonable to the Comptroller in the circumstances;(e)if the company only derives income that is exempt from tax for that year of assessment, then section 37B of this Act in force immediately before 7 December 2020 applies, with the necessary modifications, for the purpose of making a deduction of the balance under subsection (1)(d) as if the balance were unabsorbed donation in respect of income of a company subject to tax at the rate of tax specified in section 43(1)(a).(3) In this section —“concessionary income” means income that is subject to tax at a concessionary rate of tax;“concessionary rate of tax” has the meaning given by section 14C in force immediately before 29 December 2016;“normal income” means income that is subject to tax at the rate of tax specified in section 43(1)(a).[37M

What's the problem? (required)

Source link (optional)

Open the official source PDF to compare

Describe the problem (and edit the text or pick an issue type) to submit.

Suggestions are submitted anonymously — no account or personal information is required or sent.