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1996
THE PARLIAMENT OF THE
COMMONWEALTH OF AUSTRALIA
HOUSE OF
REPRESENTATIVES
TAXATION LAWS AMENDMENT BILL (NO. 3)
1996
SUPPLEMENTARY EXPLANATORY
MEMORANDUM
Amendments to be moved on behalf of the
Government
(Circulated by
authority of the
Treasurer, the Hon Peter Costello, MP)
79473
Cat. No. 96 5436 4 ISBN 0644 481439
Amends the Bill to modify the conditions contained in subparagraph 18(2)(c)(i). The subparagraph will now provide that the transitional arrangements can apply where the directors of a co-operative have approved a business plan which includes the acquisition of the asset.
Date of effect: 7.30pm Eastern Standard Time on 20 August 1996.
Amendment announced: Not previously announced.
Financial impact: The nature of the amendment is such that a reliable estimate cannot be made. However, the revenue impact is expected to be insignificant.
Compliance cost impact: None.
1. To modify the conditions contained in subparagraph 18(2)(c)(i) of the Bill.
2. Part 6 of Schedule 1 of the Bill amends the Income Tax Assessment Act
1936 to ensure that co-operative companies will no longer receive a
deduction under paragraph 120(1)(c) for the repayment of new government
loans.
3. Subitem 18(2) provides a transitional arrangement for certain
co-operative companies which enter into loan contracts by 31 December 1996. One
of the conditions for this transitional arrangement is that, before the Budget,
the directors of the company had, under a business plan approved by the
directors, authorised the entry into a contract by the company to acquire the
asset and had recorded that authorisation in the company's minutes.
4. The amendment provides a new condition for determining whether the
transitional provision contained in subitem 18(2) can apply to a co-operative.
This new condition is implemented by replacing the current subparagraph
18(2)(c)(i) with a new subparagraph. [Amendment 1 - substitutes
subparagraph (c)(i) of subitem 18(2)]
5. To satisfy this
condition the asset for whose acquisition the loan was entered into must be
identified in the co-operative's business plan as an asset which the
co-operative plans to acquire. The business plan may identify several such
assets and the transitional provision can apply to each one.
6. Also, the
directors must approve the business plan and that approval must be recorded in
the co-operative's minutes before 7.30pm on 20 August 1996.