Commonwealth Consolidated Acts

INCOME TAX RATES ACT 1986 - SCHEDULE 7

Subsection 12(1)

Part I -- Resident taxpayers

              1.  Subject to clauses 2 and 3, the rates of tax on the taxable income of a resident taxpayer are as follows:

                     (a)  45% for the superannuation remainder (if any) of the taxable income;

                    (aa)  45% for the employment termination remainder (if any) of the taxable income;

                     (b)  for each part of the ordinary taxable income specified in the table--the rate applicable under the table.

              2.  Where:

                     (a)  the taxable income of a resident taxpayer consists of or includes a special income component; and

                     (b)  Division 16 of Part III of the Assessment Act does not apply to the income of the taxpayer; and

                     (c)  Division 392 (Long‑term averaging of primary producers' tax liability) of the Income Tax Assessment Act 1997 does not apply to the taxpayer's assessment;

the rate of tax for every $1 of the taxable income is the amount ascertained in accordance with the formula  where:

A   is the amount of tax that would be payable by the taxpayer           under clause 1 on a taxable income equal to the reduced taxable        income;

B   is 5 times the difference between:

                     (c)  the amount of tax that would be payable by the taxpayer under clause 1 on a taxable income equal to the sum of:

                              (i)  the reduced taxable income; and

                             (ii)  20% of the special income component of the taxable income; and

                      (d)  the amount of tax that would be payable by the taxpayer under clause 1 on a taxable income equal to the reduced taxable income; and

C   is the number of whole dollars in the taxable income.

In applying the formula, component B is to be worked out on the assumption that the whole of the taxable income is ordinary taxable income.

              3.  Where:

                     (a)  the taxable income of a resident taxpayer consists of or includes a special income component; and

                     (b)  Division 16 of Part III of the Assessment Act applies to the income of the taxpayer or Division 392 (Long‑term averaging of primary producers' tax liability) of the Income Tax Assessment Act 1997 applies to the taxpayer's assessment;

the rate of tax for every $1 of the taxable income is the amount ascertained in accordance with the formula  where:

A   is the amount of tax that would be payable by the taxpayer under clause 1 on a taxable income equal to the reduced taxable income;

B   is 5 times the difference between:

                     (c)  the amount of tax that would be payable by the taxpayer under clause 1 on a taxable income equal to the sum of:

                              (i)  the average income; and

                             (ii)  20% of the special income component of the taxable income; and

                     (d)  the amount of tax that would be payable by the taxpayer under clause 1 on a taxable income equal to the average income; and

C   is the number of whole dollars in the taxable income.

In applying the formula, component B is to be worked out on the assumption that the whole of the taxable income is ordinary taxable income.

Part II -- Non‑resident taxpayers

              1.  Subject to clauses 2 and 3, the rates of tax on the taxable income of a non‑resident taxpayer are as follows:

                     (a)  45% for the superannuation remainder (if any) of the taxable income;

                    (aa)  45% for the employment termination remainder (if any) of the taxable income;

                     (b)  for each part of the ordinary taxable income specified in the table--the rate applicable under the table.

              2.  Where:

                     (a)  the taxable income of a non‑resident taxpayer consists of or includes a special income component; and

                     (b)  Division 16 of Part III of the Assessment Act does not apply to the income of the taxpayer; and

                     (c)  Division 392 (Long‑term averaging of primary producers' tax liability) of the Income Tax Assessment Act 1997 does not apply to the taxpayer's assessment;

the rate of tax for every $1 of the taxable income is the amount ascertained in accordance with the formula  where:

A   is the amount of tax that would be payable by the taxpayer under clause 1 on a taxable income equal to the reduced taxable income;

B   is 5 times the difference between:

                     (c)  the amount of tax that would be payable by the taxpayer under clause 1 on a taxable income equal to the sum of:

                              (i)  the reduced taxable income; and

                             (ii)  20% of the special income component of the taxable income; and

                     (d)  the amount of tax that would be payable by the taxpayer under clause 1 on a taxable income equal to the reduced taxable income; and

C   is the number of whole dollars in the taxable income.

In applying the formula, component B is to be worked out on the assumption that the whole of the taxable income is ordinary taxable income.

              3.  Where:

                     (a)  the taxable income of a non‑resident taxpayer consists of or includes a special income component; and

                     (b)  Division 16 of Part III of the Assessment Act applies to the income of the taxpayer or Division 392 (Long‑term averaging of primary producers' tax liability) of the Income Tax Assessment Act 1997 applies to the taxpayer's assessment;

the rate of tax for every $1 of the taxable income is the amount ascertained in accordance with the formula  where:

A   is the amount of tax that would be payable by the taxpayer under clause 1 on a taxable income equal to the reduced taxable income;

B   is 5 times the difference between:

                     (c)  the amount of tax that would be payable by the taxpayer under clause 1 on a taxable income equal to the sum of:

                              (i)  the average income; and

                             (ii)  20% of the special income component of the taxable income; and

                     (d)  the amount of tax that would be payable by the taxpayer under clause 1 on a taxable income equal to the average income; and

C   is the number of whole dollars in the taxable income.

In applying the formula, component B is to be worked out on the assumption that the whole of the taxable income is ordinary taxable income.