INCOME TAX ASSESSMENT ACT (No. 2) 1974 No. 126 of 1974 - SECT 38 Credits in respect of tax paid in Papua New Guinea.

INCOME TAX ASSESSMENT ACT (No. 2) 1974 No. 126 of 1974 - SECT 38

38. (1) Section 160AF of the Principal Act is amended-

   (a)  by inserting after sub-section (2) the following sub-sections:-



"(2A) Subject to the succeeding provisions of this section, where-

   (a)  the whole or a part of a taxpayer's taxable income of the year of
        income (in this sub-section referred to as the 'property component')
        is derived from income from property; and

   (b)  additional tax is payable in respect of the property component by
        virtue of an Act imposing income tax for the year of tax,

the amount of Australian tax payable in respect of income derived from sources
in the Territory by the taxpayer in the year of income is, for the purposes of
sub-section (1), the sum of-

   (c)  the amount ascertained in accordance with the preceding provisions of
        this section as being the amount of Australian tax so payable; and

   (d)  whichever of the following amounts is applicable-

        (i)    where sub-section (6) does not apply-so much of the additional
               tax referred to in paragraph (b) as bears to that additional
               tax the same proportion as the Territory property component
               bears to the property component; or

        (ii)   where sub-section (6) applies-so much of the amount that, but
               for that sub-section, would be ascertained in accordance with
               sub-paragraph (i) as bears to that amount the same proportion
               as the Territory property component bears to the amount that,
               but for sub-section (6), would be the Territory property
               component.

"(2B) For the purposes of sub-section (2A), the Territory property component
is an amount equal to that part of the income from property included in the
taxpayer's assessable income of the year of income that was derived from
sources in the Territory, reduced by the sum of-

   (a)  any deductions allowed or allowable from income from property included
        in the taxpayer's assessable income of the year of income that relate
        exclusively to that part of that income from property; and

   (b)  so much of any other deductions allowed or allowable from income from
        property included in the taxpayer's assessable income of the year of
        income as, in the opinion of the Commissioner, may appropriately be
        related to that part of that income from property.";

   (b)  by omitting sub-section (3) and substituting the following
        sub-section:-



"(3) Subject to the succeeding provisions of this section, where the
assessable income derived by a company in a year of income includes dividends
derived from sources in the Territory in respect of which the company is
entitled to a rebate under section 46 or 46A, the adjusted net Territory
income of the company of the year of income shall, for the purposes of
sub-section (2), be deemed to be the amount that would have been the adjusted
net Territory income of the company if the company had not derived those
dividends."; and

   (c)  by omitting sub-section (5) and substituting the following
        sub-sections:-



"(5) Where-

   (a)  a person who has paid or is liable to pay further tax assessed under
        section 94 in respect of income derived in the year of income has
        derived income in the year of income from sources in the Territory;

   (b)  a trustee of a trust estate has paid or is liable to pay tax assessed
        under section 102 in respect of income derived in the year of income,
        being income that consists of or includes income derived from sources
        in the Territory; or

   (c)  a private company's taxable income of the year of income includes
        dividends that are private company dividends for the purposes of
        sub-section (3) of section 46 or sub-section (6) of section 46A and in
        relation to which the company is not allowed a further rebate under
        that sub-section,

the amount of Australian tax payable in respect of the income derived by the
person, trustee or company in the year of income from sources in the Territory
is, for the purposes of sub-section (1), such amount as the Commissioner
determines, being so much of the tax paid or payable by the person, trustee or
company in respect of income of the year of income as, in the opinion of the
Commissioner, is reasonably attributable to the income derived from sources in
the Territory.



"(6) Notwithstanding the preceding provisions of this section, where the
income derived by a taxpayer in a year of income from sources in the Territory
(in this sub-section referred to as the 'Territory income') consists of income
that is, or is attributable to, dividends, and of other income, this section
does not apply in relation to the taxpayer in relation to the Territory income
as a whole but, instead, applies in relation to the taxpayer separately in
relation to the income that is, or is attributable to, dividends and in
relation to the other income, and, for the purposes of this section as so
applying in relation to the income that is, or is attributable to, dividends
or in relation to the other income, the income that is, or is attributable to,
dividends, or the other income, as the case may be, shall be treated as the
whole of the Territory income.".

(2) The amendment made by paragraph (1) (a) applies in relation to the
determination of credits in respect of income of the year of income that
commenced on 1 July 1974 and in respect of income of all subsequent years of
income.

(3) The amendments made by paragraphs (1) (b) and (c) apply in relation to the
determination of credits in respect of income of the year of income that
commenced on 1 July 1972 and in respect of income of all subsequent years of
income.