Commonwealth Numbered Acts

SALES TAX LAWS AMENDMENT ACT 1985 No. 47, 1985 - SECT 5

5. After section 3 of the Principal Act the following section is inserted in
Part I: Royalty

"3A. (1) Subject to sub-section (2), a reference in this Act to payment of a
royalty, in relation to goods, is a reference to payment of an amount of
royalty in respect of goods that occurs at a time when the goods are neither
excluded goods nor exempt goods.

"(2) Where-

   (a)  a person pays an amount of royalty in respect of goods at a time when
        the goods are excluded goods or exempt goods; and

   (b)  the payment is made in connection with a scheme entered into or
        carried out for the purpose of enabling any person to avoid liability
        to pay an amount of sales tax that would have been, or might
        reasonably be expected to have been, payable in respect of the goods,
        the payment shall be deemed, for the purposes of this Act, to have
        been made at a time when the goods were neither excluded goods nor
        exempt goods.

"(3) For the purposes of sub-sections (1) and (2), an amount of royalty that
is paid in respect of goods and another matter shall, to the extent to which
it is attributable to the goods, be deemed to be paid in respect of the goods.

"(4) For the purposes of this Act, where a non-resident pays an amount of
royalty in respect of goods at the request of, or under an arrangement with, a
resident, then, unless the Commissioner otherwise directs, the resident shall
be deemed to pay, and the non-resident shall be deemed not to pay, the amount
of royalty.

"(5) A reference in this section to royalty is a reference to an amount,
however described or computed, that is paid by a person (whether the payment
is periodical or not) to the extent to which the amount is paid by way of
royalty (or like payment) as consideration for-

   (a)  the doing of, or the right to do, any act that would constitute an
        infringement of copyright if done without the licence of the owner of
        the copyright, other than an act consisting of-

        (i)    performing a work;

        (ii)   broadcasting a work, sound recording or cinematograph film;

        (iii)  causing a cinematograph film, a work, or a television program
               that includes a work, to be transmitted to subscribers to a
               diffusion service;

        (iv)   causing a sound recording to be heard in public;

        (v)    causing a cinematograph film to be seen in public; or

        (vi)   exhibiting an article in public;

   (b)  the making, use, exercise or vending of an invention or the right to
        make, use, exercise or vend an invention;

   (c)  the use of, or the right to use-

        (i)    a design or trade mark;

        (ii)   confidential information; or

        (iii)  machinery, implements, apparatus or other equipment;

   (d)  the supply of scientific, technical, industrial, commercial or other
        knowledge or information;

   (e)  the supply of any assistance that is ancillary and subsidiary to, and
        is furnished as a means of enabling the application or enjoyment of,
        any matter falling within any of the foregoing paragraphs; or

   (f)  a total or partial forbearance in respect of any matter falling within
        any of the foregoing paragraphs (including paragraph (e)).



"(6) Where goods are manufactured or sold subject to the payment of a royalty,
a reference in this Act, in relation to the ascertainment of the sale value of
the goods, to-

   (a)  the amount for which the goods are sold or purchased;

   (b)  the amount for which the goods could reasonably be expected to have
        been sold or purchased;

   (c)  the amount for which identical goods could reasonably be expected to
        have been sold or purchased;

   (d)  the amount charged to a person by another person in respect of the
        goods;

   (e)  a particular value of the goods;

   (f)  the amount of wages paid in respect of the manufacture of the goods;
        or

   (g)  the amount payable in respect of the manufacture of the goods, shall
        be read as including a reference to-

   (h)  except where paragraph (j) or (k) applies-such amount as, in the
        opinion of the Commissioner, is the value of the royalty;

   (j)  in the case of a reference to the amount of wages paid in respect of
        the manufacture of the goods-

        (i)    where the reference occurs in the first proviso to sub-section
               18 (2)-57%; or

        (ii)   where the reference occurs in the proviso to sub-section 18
               (3)-83%,
of the amount that, in the opinion of the Commissioner, is the value of the
royalty; or

   (k)  in the case of a reference to the amount payable in respect of the
        manufacture of the goods-75% of the amount that, in the opinion of the
        Commissioner, is the value of the royalty.



"(7) For the purposes of this section-

   (a)  an expression used in paragraph (5) (a) has the same meaning in that
        paragraph as in the Copyright Act 1968, but 'cinematograph film', in
        addition to the meaning given by that Act, includes a video tape or
        video disc;

   (b)  an expression used in paragraph (5) (b) has the same meaning in that
        paragraph as in the Patents Act 1952;

   (c)  'design' means a design of a kind capable of being registered under
        the
Designs Act 1906, whether or not it is registered under that Act or any other
law; and

   (d)  'trade mark' means a mark of a kind capable of registration under the
        Trade Marks Act 1955, whether or not it is registered under that Act
        or any other law, but does not include a mark that relates to a
        service.



"(8) In this section-
'excluded goods' means goods, including commodities, of a kind referred to in
paragraph (a) or (b) of the definition of 'goods' in sub-section 3 (1);
'exempt goods' means goods the sale value of which is exempt from sales tax by
virtue of the Sales Tax (Exemptions and Classifications) Act 1935;
'payment', in relation to an amount, includes the incurring of a liability to
pay, and the crediting of, the amount;
'resident' means-

   (a)  a natural person who is a resident of Australia;

   (b)  a natural person whose domicile is in Australia, except where the
        Commissioner is satisfied that the person's permanent place of abode
        is outside Australia; or

   (c)  a company that is incorporated in Australia, or, not being
        incorporated in Australia, carries on business or holds property in
        Australia;
'scheme' means-

   (a)  an agreement, arrangement, understanding, promise or undertaking,
        whether formal or informal, whether express or implied and whether or
        not enforceable, or intended to be enforceable, by legal proceedings;
        or

   (b)  a scheme, plan, proposal, action, course of action or course of
        conduct, whether unilateral or otherwise.



"(9) For the purposes of this section, a scheme shall be taken to be entered
into or carried out for a particular purpose if the person who has, or one or
more of the persons who have, entered into or carried out the scheme or a part
of the scheme did so for that purpose or for purposes including that
purpose.".