Northern Territory Explanatory Statements

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TAXATION ADMINISTRATION BILL 2007

· are outdated and difficult to interpret - the legislation is nearly 30 years old;
· are out of step with similar tax administration legislation in place in the other jurisdictions;
· include powers that are inconsistent with more contemporary standards. For example the ability to enter residential premises without an occupier’s consent or a search warrant; and
· do not adequately legislate for aggressive schemes used by a small minority of taxpayers to avoid or delay the payment of their tax liabilities.
The Bill is based on the model adopted by New South Wales, Victoria, Tasmania and the Australian Capital Territory and provides greater detail and clarity on the way taxes are to be administered.

Overall, the intention is to have a taxation administration framework that will make the administration of taxes more transparent, providing greater certainty on how they will be administered and standard rules. This should help to reduce both taxpayer compliance costs and government administration costs.

Administration

The general administration of the Territory’s taxation laws will be the responsibility of the Commissioner of Territory Revenue. The Commissioner must have the powers required to administer the taxation laws in a manner that is impartial and free from Ministerial direction.

The Administrator appoints the Commissioner. In turn, the Commissioner may appoint Deputy Commissioners to assist with the administration of the taxation laws. Other staff, consultants and contractors may also be appointed to provide assistance.

The Commissioner may delegate any of his or her powers and functions to tax officers, except the power to write off tax and certain other investigation related powers.

Assessment of tax liability

An assessment is the process of determining a tax liability, with the taxation laws specifying the basis on which a liability for tax arises. The Bill adopts many of the existing procedures for determining and notifying a tax liability by way of an assessment, with subsequent rights of objection and appeal flowing from that assessment.

The making of an assessment underpins the ascertainment of tax liabilities and will be the basis on which subsequent rights flow, such as the recalculation of liability, refunds and review rights.

An assessment may be made on the basis of information that is available to the Commissioner at that time. This includes information that is obtained from a source other than a taxpayer or their adviser. An example of when this may occur is when the Commissioner may wish to make an assessment before all relevant information is available, such as where a taxpayer fails to provide all this information within a reasonable time.

Similarly, the Commissioner may also make an estimated assessment of a taxpayer’s liability. As an example, this may occur where a taxpayer fails to lodge an instrument or return. Importantly, a taxpayer’s liability may be reassessed should all relevant information become available after the initial assessment has been made.

There may also be a small number of cases where, through no fault of either the Commissioner or the taxpayer, it is difficult to determine the taxpayer’s liability. This may occur where a matter is complex or it is difficult to determine the value of property. Currently, these issues must be resolved in order to assess a taxpayer’s liability, no matter how long that process may take. The Bill provides for these circumstances by allowing the Commissioner to make a negotiated assessment with the written agreement of the taxpayer. It is envisaged that negotiated assessments will only be made in very limited and rare circumstances.

In certain circumstances, the Commissioner may currently reassess a tax liability. Reassessments do not replace an assessment but either increase or decrease the liability, or vary the basis on which the assessment was made without changing the liability.
The existing legislation allows a stamp duty reassessment to be made within three years of an assessment. In comparison, the Pay-roll Tax Act does not limit when a reassessment of a payroll tax liability can be made by the Commissioner.

In contrast, the Bill provides a reassessment period that is generally limited to five years from the time of the initial assessment. This provides greater certainty to taxpayers.

The general reassessment period of five years is aligned with the entitlement of taxpayers to a refund of tax that has been overpaid and is consistent with the reassessment periods applied in all other states and territories.

The Bill also sets out the effect of the Commissioner withdrawing an assessment, an area in which the current legislation does not have any express provisions.

Currently, there is no requirement for anyone to voluntarily disclose any information to the Commissioner so that an assessment of a tax liability can be made. Where no information is voluntarily provided to the Commissioner, the onus is on the Commissioner to demand specific information from a person so that a correct assessment can be made.

This is an inefficient administrative process that can cause unnecessary delays in making a tax assessment and enables someone to frustrate the process of making a tax assessment by withholding information. The current approach in the Northern Territory is out of step with the laws in every other state and territory.

Accordingly, the Bill requires taxpayers and their advisers to disclose upfront all the facts and circumstances that will enable the Commissioner to correctly assess a taxpayer’s liability. The requirement for full and true disclosure does not override legal professional privilege a taxpayer may have over communications with its lawyers.

The land-holder stamp duty rules currently allow the Commissioner to request a taxpayer to provide evidence of the unencumbered value of the land. This power has been extended to allow the Commissioner to request a written valuation from a taxpayer in all circumstances where a tax liability is determined by reference to the value of property.

Refunds of tax

Taxpayers are entitled to refunds for tax that has been overpaid, subject to certain conditions and time limits. Specific provisions for the making of refunds may be included in a taxation law, in addition to those contained in the Bill.

A refund of tax will be made where a taxpayer has paid more tax than required. In most instances, entitlement to a refund will expire within five years of the date of overpayment. However, where a refund arises from the reassessment of a tax liability, the relevant time period will be determined by the period set out for the making of a reassessment.

Instead of refunding an amount to a taxpayer, the Commissioner will be able to apply it against tax or other amounts payable by a taxpayer or, with the taxpayer’s consent, credit the amount against a future tax liability.

Interest and penalty tax

The objective of imposing interest on unpaid tax is to encourage payment on time and to compensate the Territory for the period that it has not had the use of those funds. The payment of tax can be deferred by a number of means, including the late lodgement of documents and returns, or by failing to pay tax by the due date.

Interest will be imposed on a daily basis, at the prescribed rate, on any unpaid portion of tax and penalty tax, from the end of the last day for payment until the tax is paid in full.

Interest is unaffected by the Commissioner granting an extension of time to pay tax. For example, if a tax liability is paid by instalments, interest will accrue on the unpaid tax, as reduced by each instalment. Interest cannot be levied on unpaid interest.

The interest rate comprises a prescribed market rate component, which is subject to annual change, and a premium component. The premium component acts as a deterrent to the Territory being used as a source of finance for a taxpayer.

Penalty tax is an administrative sanction that is intended to ensure compliance with the taxation laws by requiring taxpayers to pay an amount in addition to tax that is unpaid. It should be noted that penalty tax is payable in addition to interest, but is not payable on any interest or penalty tax that has not been paid.

The existing taxation legislation includes a broad power to levy up to 200 per cent in penalty tax, with the Commissioner able to remit any amount of the penalty. As this approach lacks clarity and can raise questions of consistency, the Commissioner has issued an administrative guideline to explain how the penalty provisions of the existing legislation apply.

In contrast, the Bill clearly identifies the circumstances in, and the rate at which penalties will be levied, providing for a more certain and transparent approach to levying penalty tax.

Returns

In addition to the requirement to lodge instruments with the Commissioner for assessing, taxpayers can also pay some forms of tax by lodging returns with the Commissioner. Examples of this include payroll tax and insurance duty. The taxation laws dictate the ability to “self-assess” tax via the lodgement of returns.

Returns must be in a form approved by the Commissioner and are taken to be lodged when they are received by the Commissioner. The Commissioner may also extend the time for lodging a return and vary the period to which it relates.

In some circumstances it may be necessary for the Commissioner to approve special tax return arrangements for the lodgement and payment of tax by specified taxpayers, or classes of taxpayers, and their agents. Conditions, such as the requirement to keep specific records, the lodgement and payment of tax at specific times and limiting the arrangements to specific types of taxes, may be imposed in respect of any approved arrangements.

The purpose of having special tax return arrangements is to provide flexibility in the way tax is assessed and returns may be lodged. It also allows the Commissioner to respond to the individual circumstances of a taxpayer and, more importantly, changes in the way that business is conducted generally.

Payment and recovery of tax

To comply with their obligations, taxpayers need adequate information about tax payment methods and the time within which payment must be made. Times for the payment of particular taxes will be specified in the relevant taxation law.

The Commissioner has the discretion to extend the time for payment of tax, or allow a person to pay tax by instalments. Instalment arrangements will generally be entered into where the payment of the tax will lead to significant financial hardship. By entering into such an arrangement, debt recovery proceedings will be suspended, although, interest will continue to accrue on the unpaid tax. However, any instalment arrangement will be subject to the Commissioner’s right to terminate the arrangement at any time and recover the outstanding tax.

As it is necessary for the Commissioner to be able to collect tax promptly, sufficient powers are provided for the effective recovery of unpaid tax. Any unpaid tax is a debt due to the Territory, which the Commissioner can recover.

The current taxation laws do not adequately provide for the collection of taxes from companies that accumulate tax debts by trading while insolvent. In extreme cases, this is done deliberately to avoid paying taxes by stranding tax debts in a company that does not have the financial capacity to pay its debts, while the people behind such a company form a new company to continue their business operations.

The Bill adopts a mechanism to make directors responsible for ensuring that a company takes commercially sensible action to address the continued non-payment of tax. Those actions are what would be expected from companies with good corporate governance arrangements in place and to meet other legislative obligations required for the proper administration of companies.

This will only apply after a company has failed to pay its tax on time and a notice has been served on the directors of the company advising them that they will become personally liable for the tax owed by the company if the company does not take appropriate action.

A director of a company will not be held liable for the payment of the company’s debts if the director can establish that reasonable action was taken by them to ensure that the company remedied its non-payment, or the director was unable to take such action because of illness or some other reason.

The Commissioner currently has the power under the stamp duty land-holder rules to secure the payment of tax by placing an encumbrance over land. This prevents land subject to the encumbrance being sold without that tax being paid. In extreme cases, this could result in the land being sold to recover the unpaid tax. To date, it has not been necessary to register an encumbrance over land under these stamp duty provisions.

The power to secure stamp duty by an encumbrance over land has been extended such that any stamp duty liability arising from the acquisition of land, or an interest in a land-holding corporation, that is not paid by the due date becomes an overriding statutory charge over the land that may be registered (this also applies to mining tenements). Similar powers also exist in other Northern Territory Acts, such as the First Home Owner Grant Act and Local Government Act.

In accordance with current experience, it is envisaged that overriding statutory charges will only be registered in limited circumstances involving the non-payment of tax or as security where tax is being paid by instalments.

Record keeping and general offences

The Bill contains record keeping and general offence provisions that are similar to those in the existing legislation. The Commissioner's ability to properly administer the taxation laws depends on the existence of suitable records to enable a person's liability under the taxation laws to be identified.

Taxpayers are required to keep, or cause to be kept, the records necessary to enable their tax liability to be established. They may also be required to keep additional records, as notified to them by the Commissioner. Such records generally must be kept for five years.

A number of offences are provided in relation to the keeping of records. For example, these include failing to keep proper records, keeping false or misleading records or wilfully damaging or destroying records.

Three main other offences are specified - tax evasion, providing false or misleading information and falsifying or concealing information.

Investigations

To protect the Territory’s revenue, the Commissioner is empowered to investigate compliance and non-compliance with the taxation laws, including avoidance or evasion. An investigation may be undertaken for any number of reasons, including to determine whether a tax liability exists; audit tax records; gather information relevant to an objection or appeal against a decision of the Commissioner; determine whether a tax law (including the First Home Owner Grant Act) has been contravened or gather evidence of this; and decide an application made under a tax law.

The investigation powers set out in the Act are largely the same as existing powers, but are more restrictive and transparent. This provides clearer rules as to what powers tax officers may exercise and some powers have been reduced or restricted from their current level.

Under arrangements with interstate taxation Commissioners, investigation powers may be exercised for the purposes of interstate taxation laws. This enables persons administering similar laws in another state or territory to conduct investigations in the Northern Territory, or for the Northern Territory Commissioner to conduct investigations on their behalf. The other states have similar legislation, which allows Northern Territory investigators to conduct investigations in those states.

Disclosure of information

In administering the taxation laws, the Commissioner is provided with information that may relate to the personal, business or commercial affairs of taxpayers. Given the nature of the information and the fact that the Commissioner may compel its provision, the Bill places appropriate limitations on the disclosure of the information by the Commissioner, staff, former staff and others acquiring the information (including persons who acquire confidential information by unauthorised means). Heavy penalties are provided for the disclosure of confidential information when not permitted by the Act.

Objections and appeals

Taxpayers that are dissatisfied with an assessment or decision made by the Commissioner have avenues available to them to have those assessments and decisions reviewed. This would normally occur through lodging an objection with the Commissioner (which the Commissioner would determine), or appealing to the Taxation and Royalty Appeals Tribunal (the Tribunal) or the Supreme Court against objections determined by the Commissioner.

The objection and appeal provisions contained in the Bill reflect those that exist in the current Taxation (Administration) Act, which also apply to the First Home Owner Grant Act and the Mineral Royalty Act.

Prosecutions and offence provisions

The Bill also deals with the administration of taxation prosecutions, offences by corporations and the effect of criminal penalties. It provides that taxation prosecutions must be commenced within 5 years of the alleged offence, unless the offence involves tax evasion. This is because tax evasion is considered the most serious criminal activity for which sanctions are provided under the taxation laws.

Where an offence is committed by a corporation, the management of the corporation is taken to have committed the same offence and to be liable for the same penalty. The management of the corporation includes directors, secretaries and managers such as administrators and trustees.

Miscellaneous and transitional provisions

The Bill has miscellaneous provisions that mainly set out administrative procedures such as the service of documents on and by the Commissioner.

The Bill also contains transitional provisions to ensure an efficient transition in relation to the new Taxation Administration Act.


NOTES ON CLAUSES

PART 1 – PRELIMINARY MATTERS

Clause 1. Short title

This is a formal clause which provides for the citation of the Act. When passed, the Act may be referred to as the Taxation Administration Act.

Clause 2. Commencement

The new Taxation Administration Act commences on 1 January 2008.

Clause 3. Interpretation

Clause 3(1) contains many of the defined terms to be used in the new Taxation Administration Act.

Clause 3(2) provides that no court has jurisdiction in relation to decisions or assessments that are stated to be not subject to judicial review.

Normally disputes over taxation are reviewed through a formal objection and appeal process. This process allows a taxpayer to request the Commissioner to re-examine a tax assessment and if the taxpayer is still aggrieved with the assessment, the matter can be further considered via appeal to the Tribunal or the Supreme Court.

Notwithstanding this comprehensive review mechanism, the common law also provides a right of judicial review where the objection and appeal mechanisms do not apply. However, there are instances where these rights of review are considered inappropriate. These decisions are principally those that may be made in the Commissioner’s discretion to confer a special benefit on a person that would not otherwise exist but for the discretion.

Under the Bill, the only decisions not subject to judicial review are the Commissioner’s decision to make or not make a negotiated assessment and the actual negotiated assessment or reassessment of a negotiated assessment that was agreed to by the taxpayer (see clause 20).

Clause 4. Act binds the Crown

The Crown will be bound by the new Taxation Administration Act.

Clause 5. Purpose of Act and relationship with other taxation laws

The new Taxation Administration Act provides for the administration and enforcement of the taxation laws. See clause 3(1) for the definition of taxation laws.

The new Taxation Administration Act and the other taxation laws should be read as if they are one Act. This is because the new Taxation Administration Act supports the operation of the other taxation laws by providing the common administrative rules.

Notwithstanding this, there may be some instances where a specific provision in a taxation law overrides the operation of the new Taxation Administration Act, such as where a general administrative provision is inappropriate. Also, some administrative provisions that are specific to a particular taxation law will be contained in that law, rather than the new Taxation Administration Act.

PART 2 – ADMINISTRATION

Division 1 – Commissioner and staff

Clause 6. Commissioner

There will be a position of the Commissioner of Territory Revenue who must be appointed by the Administrator. At the commencement of the new Taxation Administration Act, the person holding the office of Commissioner of Taxes becomes the Commissioner of Territory Revenue (see clause 152).

Clause 7. Acting Commissioner

The Minister (responsible for the new Taxation Administration Act) may appoint a public servant to temporarily act as the Commissioner, but not for a period exceeding 12 months. Such an appointment must be made in writing and may be subject to conditions specified in such an appointment.

Clause 8. Deputy Commissioner

A public servant may be appointed as a Deputy Commissioner of Territory Revenue and two or more can be appointed at any one time. A Deputy Commissioner may act in place of the Commissioner if:
(i) the office of the Commissioner is vacant or the Commissioner is unable or unavailable to carry out official functions; and
(ii) no Acting Commissioner has been appointed.

Clause 9. Other staff

Other staff required to administer and enforce the taxation laws are to be appointed in the usual manner for public servants.

Clause 10. Use of consultants and contractors

The Commissioner may engage consultants or contractors to assist in administering the taxation laws. Note that such contractors are “tax officers” when engaged for the purposes of administering a taxation law (see clause 3) and accordingly gain both the legal protections (clauses 17, 104 and 105) and obligations regarding confidentiality (clause 102) that such status entails.

Division 2 – Commissioner’s role and functions

Clause 11. Role of Commissioner in administration of taxation laws

The Commissioner is responsible for administering the taxation laws and may do what is necessary to give effect to those laws. This clause also makes it clear that the Commissioner’s administration of the taxation laws is not subject to Ministerial direction and control.

Clause 12. Legal proceedings in Commissioner’s name

Legal proceedings by or against the Commissioner are taken in the name of “Commissioner of Territory Revenue”. A person who states that they appear in a proceeding for the Commissioner, or produces a document purporting to authorise that person to commence proceedings, is taken to be authorised to do so.

Clause 13. Commissioner may exercise functions under Commonwealth Act

The Commissioner may perform the functions of a State taxation officer under Part IIIA of the Commonwealth’s Taxation Administration Act 1953. This enables information to be exchanged between the Commissioner and the Federal Commissioner of Taxation.

Division 3 - Delegation

Clause 14. Delegation by Commissioner

The Commissioner may delegate any of his powers under the taxation laws, other than the power:
(i) to authorise entry to residential premises; and
(ii) to authorise the use of force to enter premises or carry out a search that may result in damage to property.

Under the Interpretation Act, the Commissioner is prevented from delegating the power of delegation.

Division 4 – Authorised officers

Clause 15. Authorised officers

The Commissioner is an authorised officer and may appoint other persons to be authorised officers. It also provides that a person delegated to exercise investigation powers under proposed Part 8 is also an authorised officer for the purpose of exercising those powers.

Authorised officers have a range of investigative powers, including being able to require the production of information, require persons to attend for examination and answer questions; and the power to enter and search premises (see Part 9).

Clause 16. Identity cards for authorised officers

An investigator (“authorised officer”) must be issued with an identification card containing that person’s name and photograph. Investigators may be required to produce or display their identification card in certain circumstances, such as when they are exercising investigative powers (for example, see clause 93).

Division 5 – Immunity from liability

Clause 17. Protection from liability

No civil or criminal action can be taken against a tax officer who, in good faith, exercises or acts in the belief that they may exercise powers granted under a taxation law. However, the Territory may remain vicariously liable for acts and omissions of Territory employees.

PART 3 – ASSESSMENT OF TAX LIABILITY

Division 1 – Forms of assessment

Clause 18. General power to make assessment

The Commissioner may assess a taxpayer’s tax liability. This includes a determination that a taxpayer does not have a liability to pay tax.

An assessment (which is defined in clause 3) is subject to the reassessment provisions in clause 21.

Clause 19. Information on which assessment is to be based

The Commissioner may assess a person’s tax liability on information obtained from any source. It also provides that a tax liability may be estimated, if the Commissioner has insufficient information to assess the exact tax liability of a person.

Clause 20. Negotiated assessments

The Commissioner may make a negotiated assessment with the agreement of a taxpayer where the Commissioner is satisfied that there is good reason for making such an assessment.

An example of when a negotiated assessment may be made is where the complexity of a matter is such that it would result in significant time and resources being expended by both the Commissioner and a taxpayer to accurately determine the resulting tax liability. For these reasons, it is likely that negotiated assessments will be made in very limited circumstances.

Furthermore, the Commissioner cannot be compelled to make a negotiated assessment.

A reassessment of a negotiated assessment may only be made with the taxpayer’s agreement, or where the Commissioner believes that the negotiated assessment was fraudulently obtained or resulted from a failure to disclose material information.

Given that a negotiated assessment can only be made with a taxpayer’s agreement, decisions in relation to the making of such an assessment is not subject to judicial review. This means that a court has no jurisdiction to make decisions for an injunction, declaration or order for certiorari, prohibition or mandamus (or similar decisions).

However, reassessments not made with the taxpayer’s agreement can be challenged in the usual manner.

Division 2 – Reassessment and withdrawal of assessment

Clause 21. Reassessment

The tax liability of a taxpayer may be reassessed, as there may be instances where an assessment of tax is incorrectly made. The Commissioner or a taxpayer may institute a reassessment.

Reassessments can increase, reduce, confirm or alter in any other way an earlier assessment.

Reassessments cannot be made more than five years after the initial assessment. This provides certainty to taxpayers that their tax liability cannot be reassessed outside of that period. However, a reassessment may be issued outside of that five-year period if:
(i) the reassessment gives effect to a decision on an objection or appeal;
(ii) an initial assessment, or a reassessment, is made on the basis of incomplete or incorrect information, which resulted in a lower liability than would have otherwise been the case;
(iii) a taxation law permits a reassessment to be made outside of the five-year period; or
(iv) a taxpayer requests a reassessment within five years of the initial assessment and the matter is not finalised at the end of that period.

Clause 22. Withdrawal of assessment

A notice of assessment may be withdrawn at any time within five years of the initial assessment being made, regardless of whether the amount of tax specified in the notice has been paid.

Where an assessment is withdrawn, any tax paid is to be refunded or credited against any other tax liability of the taxpayer. If the assessment was withdrawn following the lodgement of an objection or appeal, interest is to be paid on the amount refunded at the same rate as if the assessment had been set aside on the objection or appeal.

Withdrawn assessments cannot be freshly assessed after five years of the initial assessment, unless the initial assessment would not have been withdrawn if the taxpayer had provided full and true disclosure of the all facts and circumstances.

Division 3 – Notice of assessment etc.

Clause 23. Notice of assessment, reassessment or withdrawal of assessment

A notice of assessment may be issued in respect of the determination of a tax liability. However, a notice of assessment must be issued where a taxpayer requests such a notice within five years after the date of assessment, or if the assessment is a reassessment. It is the usual practice of the Commissioner to issue a notice of assessment in relation to all assessments, to provide certainty to taxpayers about the details of assessments.

If an assessment is withdrawn, notice of the withdrawal of the assessment must be issued.

A notice of assessment must specify the amount assessed and the amount of any interest and penalty tax payable at the date of the assessment.

A notice of assessment and notice of withdrawal of assessment will be in a form approved by the Commissioner.

Division 4 – Information on which assessment is to be based

Clause 24. Requirement for full and true disclosure

Taxpayers and their tax advisers (see the definition of tax adviser for this provision) must advise the Commissioner in writing of all relevant facts and circumstances that affect a taxpayer’s tax liability when any one of the four situations set out below arise:
(i) an instrument or return is submitted for an assessment of tax;
(ii) an application is submitted for an assessment of tax;
(iii) a written request is made of a taxpayer or their tax adviser to disclose information under this clause about a tax liability the Commissioner proposes to assess; or
(iv) facts or circumstances become known to a taxpayer or their tax adviser that shows that the Commissioner has assessed the liability incorrectly.

This requirement to disclose relevant information replaces the current arrangement under which there is no obligation to provide any information to enable a tax liability to be assessed.

Taxpayers and tax advisers are only required to disclose relevant information in their possession. There is no obligation to research or audit a matter to ensure compliance with this requirement. Furthermore, this will not require the disclosure of communications over which legal professional privilege would apply between a solicitor and client, unless privilege is waived.

The definition of a tax adviser for this clause makes it very clear that a tax adviser can only be a person engaged in a professional capacity by a taxpayer, except as an employee, to perform services specifically relating to Northern Territory taxation matters. That is, a tax adviser is a person engaged by a taxpayer to:
(i) prepare a return or instrument that will be used to assess the taxpayer’s payroll tax or stamp duty liability;
(ii) submit such an instrument or return to the Commissioner; or
(iii) provide information or make submissions about the taxpayer’s payroll tax or stamp duty liability, including penalty tax and interest in relation to those liabilities.

Furthermore, the obligation on tax advisers is only intended to extend to those matters in respect of which the tax adviser has been engaged by a taxpayer to provide services or advice. For example, if a tax adviser has been engaged to complete payroll tax returns on behalf of a client and that same client engages another tax adviser to provide advice in relation to a stamp duty matter, it would not be expected that the tax adviser engaged to complete the payroll tax returns would be required to disclose any information in relation to the stamp duty matter and vice versa.

Provision has been made to enable taxpayers and tax advisers to correct any information that has been submitted to the Commissioner.

Failure to advise the Commissioner of all the relevant facts and circumstances required by this provision is an offence. However, defences are provided for both taxpayers and tax advisers.

For a taxpayer, it is a defence to a charge of not disclosing relevant information if it can be proven:
(i) that the taxpayer relied on another person subject to the same tax liability (such as a payroll tax group member) to ensure the disclosure requirements were met; or
(ii) that the taxpayer relied on their tax adviser to comply with the disclosure requirements and in doing so made a full disclosure of all facts and circumstances affecting their tax liability to the adviser.

For a tax adviser, it is a defence to a charge of not disclosing relevant information if it can be proven:
(i) that the adviser relied on the taxpayer’s apparent full and true disclosure of all facts and circumstances affecting the taxpayer’s tax liability; and
(ii) that the adviser made a full and true disclosure of all the facts and circumstances the adviser was aware of.

Clause 25. Valuation of property

Where a tax liability is determined by the value of property, the Commissioner may require the taxpayer to provide a written valuation of the property. The valuation may be a valuer’s opinion or other evidence of value that is satisfactory to the Commissioner. See clause 3(1) as to the definition of “valuer”.

The Commissioner may obtain a valuation from the Valuer-General or other valuer if not satisfied with a valuation provided by the taxpayer or if the taxpayer fails to provide a valuation within the time allowed.

Any valuation on which stamp duty is to be assessed should reflect the value of property at the time that a dutiable event occurs, even if that event is sometime in the past. This means that all valuations for the same transaction are based on conditions at the same point in time. In that sense, valuations would not be influenced by changing values over time.

The Commissioner can recover the costs of obtaining a valuation if the valuation obtained by the Commissioner exceeds the valuation provided by the taxpayer by 15 per cent or more or if the taxpayer failed to provide a valuation.

The Commissioner’s ability to recover the costs of obtaining a valuation where that valuation exceeds the taxpayer’s valuation by more than 15 per cent reflects the intent that the costs of obtaining a valuation only be recovered where the taxpayer has provided a valuation that is well below the actual market value.

Taxpayers are able to challenge valuations obtained by the Commissioner through the objections and appeals process. If a valuation is successfully challenged through that process, the Commissioner can only recover the cost of the valuation if the final value on which the assessment is based exceeds the taxpayer’s valuation by 15 per cent or more.

For the purposes of comparing valuations, where a valuation is provided that gives a range of values for the property being valued but does not specify a likely value, it will be taken that the value is the median point in the range of values provided. While most valuations provide a specific point value, there may be circumstances where the valuer considers it appropriate only to express value as a range. Accordingly, this clause provides certainty as to the method whereby such valuations will be compared for the purposes of determining whether the 15 per cent threshold has been met.

Division 5 – Ancillary provisions

Clause 26. Time as at which tax liability is to be assessed

Tax liabilities are assessed having regard to the relevant taxation law that was in force when the liability arose. However, judicial decisions that affect the interpretation of the relevant taxation provisions, after the tax liability arose, must be taken into account by the Commissioner.

Clause 27. Certain amounts to be rounded down

An amount of tax payable that is not a multiple of 5 cents is to be rounded down to the nearest 5 cents.

Clause 28. Valuation of foreign currency

On occasions an amount of money on which tax is calculated (for example, the amount of wages paid by an employer, or the consideration for a transaction) may be in a currency other than Australian dollars. If this is the case, it is to be converted to Australian dollars at the Reserve Bank rate of exchange most recently reported before the liability to pay the tax arose.

This will ensure that tax payable in respect of a transaction is calculated on the amount of Australian dollars applicable around the time of the transaction, rather than some other time when the amount may differ significantly because of varying exchange rates.

Clause 29. Validity of assessment

The validity of an assessment is not affected because a provision of a taxation law has not been complied with. For instance, if an amount of interest payable was inadvertently omitted from a notice of assessment, the validity of the assessment is unaffected.

Clause 30. Acceptance of money not an assessment

The acceptance of money by the Commissioner on the lodgement of a return or other document is not an assessment of a taxpayer’s tax liability and does not imply that the money is accepted in full satisfaction of the tax liability.

PART 4 – REFUNDS OF TAX

Clause 31. Refunds only made under this Part

The only avenue for obtaining a refund of tax is under this Part. This includes any refund arising by way of a mistake of law or fact.

This limitation also applies where the amount was purportedly paid under a taxation law and which is subsequently held to be an invalid exercise of legislative power.

Clause 32. Entitlement to refund

Tax must be refunded to a taxpayer where it appears that an overpayment of tax has been made.

However, if a taxation law provides that an application must be made by a taxpayer to receive a refund, the refund can only be made on such an application.

In addition, a tax refund is only available for five years from the date of the overpayment, unless it is to give effect to a reassessment of tax.

The whole or part of an amount refundable may be used to reduce another existing tax liability of a taxpayer (eg. the Commissioner may apply an amount of stamp duty refundable against the same taxpayer’s outstanding pay-roll tax), or to offset a future liability with the taxpayer’s consent.

Clause 33. Windfalls

A windfall profit is gained by a taxpayer where another person has paid on behalf of the taxpayer or indemnified the taxpayer for the payment of tax and the taxpayer is refunded the whole or a proportion of the tax paid. This includes situations where a taxpayer recovers the amount of the tax through the price charged for its goods or services and the tax is identified as a component of that price.

For example, it is normal commercial practice for insurers to recover an amount equal to their insurance duty liability for a policy from the person who takes out that policy. In this instance the insurer is liable for the duty, but seeks to recover an amount for its liability directly from its customers.

In respect of a windfall profit, the taxpayer is required to reimburse the third party within 90 days of receiving the refund. In addition, the taxpayer is required to advise the Commissioner within seven days after the expiry of the 90-day period that the refund has been passed on.

If the refund is not passed on within the 90-day period, the taxpayer must, within seven days after the expiry of the 90-day period, notify the Commissioner and repay to the Commissioner the amount not passed on, together with interest (as calculated under clause 35). Failure to comply with this requirement is an offence.

Before making a refund, the taxpayer may be required to satisfy the Commissioner that they have made appropriate arrangements to comply with their obligations to reimburse third parties under this clause. The Commissioner cannot refund the tax if not satisfied that the appropriate arrangements have been made.

Example
ABC Insurance Pty Ltd, is in the business of providing various types of insurance, and discovers that stamp duty on 100 insurance policies has been accounted for at a higher rate than required under the Stamp Duty Act. As a result, reassessments are sought by ABC Insurance Pty Ltd to reduce the tax payable to reflect the correct rate of duty. ABC Insurance Pty Ltd consequently receives refunds relating to each of the 100 policy holders.

As ABC Insurance Pty Ltd had already recovered the higher rate of stamp duty from 100 policy holders, ABC Insurance Pty Ltd must reimburse its clients of the windfall gain within 90 days.

ABC Insurance Pty Ltd are unable to locate 10 of the policy holders and cannot provide them with their refunds, the refund in respect of the 10 clients must be repaid to the Commissioner within 7 days at the end of the 90-day period, together with interest on the amount repaid.

PART 5 – INTEREST AND PENALTY TAX

Division 1 - Interest

Clause 34. Interest in respect of tax defaults

A tax default is defined in clause 3 to mean a failure to pay tax for which a taxpayer is liable. This may occur as a result of not lodging an instrument or a return on time or failure to provide information promptly, as well as not paying tax on time.

If a tax default occurs, a taxpayer is required to pay interest on unpaid tax, including any penalty tax, but not on unpaid interest. Interest is calculated on a daily basis at the statutory interest rate (defined in clause 35) starting from the date the tax was due for payment until the day the tax is fully paid.

Special rules apply where an assessment is issued to a taxpayer in relation to tax defaults arising over a period of time in which the taxpayer was making (or was required to make) periodic payments, such as payroll tax that is usually paid by way of monthly returns. For the purposes of calculating interest, the Commissioner may choose a date around the mid-point of the relevant financial year that the default relates, or part thereof (such as where an employer commences or ceases employing part-way through a financial year). Interest is then calculated on the aggregate tax liability unpaid for the relevant financial year (or part thereof) from the date fixed.

This system provides a practical approximation of the interest that would accrue on each periodic underpayment and is less cumbersome than calculating interest for each periodic payment in a financial year.

Clause 35. Statutory interest rate

The statutory interest rate to be applied in relation to unpaid tax is the sum of the market interest rate and the premium interest rate.

The market interest rate may be prescribed by regulation or if no rate is prescribed, it is the average yield on 90-day bank-accepted bills published by the Reserve Bank in May of the preceding financial year.

The premium interest rate is 7 per cent for the period up to 30 June 2008 and 8 per cent from 1 July 2008. The 7 per cent rate is consistent with the current “interest component” administratively levied by the Commissioner where penalties are payable and is being increased to 8 per cent to be consistent with the other states and territories that impose interest on unpaid tax.

Clause 36. Minimum amount of interest

Interest will not be imposed if the amount of interest would be less than $20.

Clause 37. Interest rate under this Division to prevail

Where a court gives judgment for an amount of unpaid tax, the interest rate provided for in clause 35 continues to apply until the tax is paid. This means, for example, that the rate of interest prescribed by the Supreme Court Rules does not apply to the judgment debt.

Clause 38. Reduction or remission of interest

The Commissioner may remit any amount of interest wholly or in part. However, the market interest rate can only be reduced if exceptional circumstances justify it.

Division 2 – Penalty Tax

Clause 39. Penalty tax in respect of certain tax defaults

If a tax default occurs, a taxpayer is liable to pay penalty tax, which is additional to primary tax (see clause 3) and interest. However, penalty tax is not payable in respect of a failure to pay interest or a previous amount of penalty tax.

Clause 40. Imposition etc. of penalty tax

Penalty tax is imposed by an assessment and it may be reduced or remitted by assessment.

Clause 41. Amount of penalty tax

The amount of penalty tax is set at a default rate of 25 per cent of the amount of tax unpaid. However, this rate will be reduced or increased in the various circumstances outlined.

No penalty tax will be imposed in respect of a tax default if the Commissioner is satisfied that the tax default was solely because of circumstances beyond the taxpayer’s control and the taxpayer took all reasonable steps to rectify the default, once the taxpayer became aware of it. The circumstances do not include financial incapacity.

Penalty tax will be reduced to 10 per cent of the amount of tax unpaid if the Commissioner is satisfied that the taxpayer took reasonable care to comply with the taxation law.

Penalty tax will be increased to 75 per cent of that amount of tax unpaid, where the Commissioner is satisfied that:
(i) the tax default arose wholly or partly from the intentional disregard of a taxation law; or
(ii) information relevant to an assessment of tax was deliberately concealed or suppressed or the assessment of the tax liability was hindered in any other way. This includes taking these actions in relation to an investigation of the tax default.

The amount of penalty tax will increase to 95% if the Commissioner is satisfied as to both (i) and (ii) above.

The circumstances in which a person is taken to hinder the investigation of a tax default are where that person deliberately falsifies, damages, conceals or destroys tax records, refuses or fails to comply with lawful requirements made in connection with the investigation, or hinders or obstructs an authorised officer in the course of the investigation.

The amount of penalty tax may be reduced by up to 20 per cent of the amount of penalty tax if the taxpayer cooperates fully with the Commissioner in the conduct of an investigation. For example, where the amount of penalty tax was 25 per cent of the amount of the tax default, this would be reduced to 20 per cent of the tax default.

The amount of penalty tax may be reduced by up to 80 per cent of the amount of penalty tax if, before an investigation is commenced, the taxpayer discloses their tax default to the Commissioner such that the disclosure avoids the need for an investigation. For example, an amount of penalty tax of 25 per cent of the amount of the tax default would be reduced to 5 per cent of the tax default.

The following table is a summary of the penalty tax payable under this clause.

PENALTY CATEGORY	BASE CULPABILITY COMPONENT	VOLUNTARY DISCLOSURE BEFORE INVESTIGATION	FULL COOPERATION WITH INVESTIGATION
Circumstances beyond the control of the taxpayer where the taxpayer has taken reasonable steps to mitigate the tax default.	0%	0%	0%
Reasonable care taken to comply with the taxation laws.	10%	2%	8%
Default penalty	25%	5%	20%
Intentional disregard of a taxation law	75%	15%	60%
Concealment or hindering an investigation	75%	n/a	n/a
Intentional disregard of a taxation law and concealment or hindering an investigation	95%	n/a	n/a

Clause 42. Minimum amount of penalty tax

Penalty tax will not be imposed if the amount of penalty tax would be less than $20.

Clause 43. Time for payment of penalty tax

A taxpayer must pay their penalty tax liability within the period specified in a written notice of assessment. A minimum period of 14 days must be allowed in which to pay penalty tax.

Failure to pay penalty tax by the due date will result in interest being imposed under clause 34 on the amount of outstanding penalty tax.

Clause 44. Remission of penalty tax

The Commissioner may remit any amount of penalty tax wholly or in part where satisfied that it is appropriate to do so.

PART 6 – RETURNS

Division 1 - General

Clause 45. Form of returns

A return must be in an approved form.

Note that return is defined in clause 3 and includes a return, statement, declaration, application, report or other record. Therefore, this provision is a general statement that all of these types of instruments required or authorised to be lodged with the Commissioner must use the appropriate form approved by the Commissioner.

Clause 46. Time of lodgement

The date a return is taken to have been lodged is the date that the Commissioner receives the return.

Clause 47. Presumption about person making and signing

Unless the contrary is proved, a signed return will be accepted as a valid return signed by a taxpayer, or with their authority.

Clause 48. Modification of requirements relating to returns

The Commissioner may extend or vary the time in which a return must be lodged. An extension or variation must be communicated in a written notice to a taxpayer, specifying details about the extension or variation.

Division 2 – Special tax return arrangements

Clause 49. Approval of special tax return arrangements

Special tax return arrangements may be made for the lodgement of returns and payment of tax with a taxpayer or class of taxpayers, or their agents. Tax that is calculated by a person other than the Commissioner under these arrangements is not an assessment of tax.

The Commissioner or another person (by making an application) may initiate these arrangements. Taxpayers, or their agents, must be informed in writing if a special tax return arrangement is approved for them.

An approved special tax return arrangement may:
(i) exempt a taxpayer or taxpayers from specific provisions of a taxation law (but does not enable an exemption to be provided from a tax liability); and
(ii) enable or require the lodging of returns and payment of tax in an electronic form.

Special tax return arrangements are usually made to vary the ways in which taxpayers are required to comply with the rules set by the taxation laws. This provides flexibility in the way tax is assessed and returns may be lodged, especially for tax that is not ordinarily paid by return. It also enables the Commissioner to respond to the individual circumstances of a taxpayer and, more importantly, changes in the way that business is conducted generally (for example, the increasing usage of electronic commerce).

Clause 50. Application for approval

Where a person applies for a special tax return arrangement, the application must be in an approved form. An application for a special tax return arrangement may be granted or refused and the applicant must be notified in writing of that decision.

Clause 51. Conditions of approval

Conditions may be imposed in relation to approved special tax return arrangements and affected taxpayers must be notified in writing of these. Some of the conditions that may be imposed in respect of a special tax return arrangement are detailed in subclause (2), however, they are not limited to these conditions.

Clause 52. Effect of approval

The conditions imposed in respect of special tax return arrangements must be complied with by taxpayers and their agents. Failure to comply with the conditions will constitute an offence, unless a taxpayer or agent is complying with the requirements set by a taxation law.

For example, if an agent has an approved special tax return arrangement allowing them to calculate a taxpayer’s liability and collect the tax payable, it will not be an offence if the agent lodges an instrument with the Commissioner for assessment, as it is in compliance with an existing requirement of a taxation law.

Furthermore, if an agent, acting on behalf of a taxpayer, does not comply with a condition and it relates to the tax liability of the taxpayer, the taxpayer and agent are both taken to have committed an offence.

PART 7 – PAYMENT AND RECOVERY OF TAX

Division 1 – Payment of tax

Clause 53. Payment by cheque

Payment of a tax may be made by cheque and is taken to be paid when accepted, but payment is conditional upon the cheque being honoured the first time that it is presented to a financial institution.

Clause 54. Extension of time for payment of tax

A taxpayer may request in writing that the normal time for the payment of tax be extended. The Commissioner may allow an extension of time if satisfied that it is appropriate.

An example of where the Commissioner may be satisfied that it is appropriate to extend the time for the payment of tax is for a complex transaction where the stamp duty liability is uncertain and the taxpayer lodges the instrument for assessment promptly, provides all material information, makes a payment of their estimated liability and is cooperative with any requests for additional information by the Commissioner. The extension of time will ensure that no tax default occurs as a result of the time that may be taken to assess the transaction, if the amount paid by the taxpayer is less than their assessed liability.

Clause 55. Power to bring forward the time for payment of tax

A written notice may be issued to a taxpayer to bring forward a due date for payment of tax, if the Commissioner believes that the taxpayer may leave Australia before the tax falls due.

Clause 56. Instalment arrangements

The Commissioner may allow tax to be paid by instalments. Approval of such an arrangement must be in writing and disclose any conditions attached to that approval. Payment of tax by instalments would usually only be contemplated where the taxpayer demonstrates financial incapacity to pay the whole of a tax liability (including by accessing loan facilities), the taxpayer commits to reducing the outstanding debt with any unexpected funds that they might receive, and where appropriate security is provided.

Tax that is being paid under an instalment arrangement is subject to interest, from the date that the tax was due for payment up to the time that the tax is paid under the arrangement.

The Commissioner may terminate an instalment arrangement at any time by giving written notice of this to a taxpayer. In the event that an instalment arrangement is terminated, amounts outstanding under the arrangement are immediately payable.

Division 2 – Recovery of tax

Clause 57. Recovery of tax as a debt

Unpaid tax is a debt due to the Territory that the Commissioner is able to recover in a court of competent jurisdiction.

Clause 58. Joint and several liability

Two or more persons liable to pay tax (including penalty tax and interest) are jointly and severally liable for its payment and tax may be collected from one or more of them.

If a person pays tax on behalf of another person who is jointly and severally liable for the tax, the person who paid the tax has a right to seek a contribution from the other person towards the amount of tax paid, unless that right has been excluded by contract.

Clause 59. Recovery from partnerships and other groups

If a tax liability (including penalty tax and interest) is incurred by or on behalf of a partnership, the partners are jointly and severally liable for the tax and it may be collected from any of the partners.

All the taxpayers that constitute a group under a taxation law are jointly and severally liable for any tax liability incurred in relation to the group or its members at the time they were members of the group, and tax may be collected from any of those members. A tax liability includes any penalty tax and interest that has accrued. Any outstanding tax liability can also be recovered from any members that left the group after the liability arose but were members of the group when the tax liability was incurred.

Clause 60. Recovery of tax from third parties

The Commissioner is empowered to recover amounts in respect of unpaid tax from persons that owe money to, or hold money on behalf of, a taxpayer. These persons are detailed in subclause (2) and are not necessarily related to the taxpayer (other than through arms-length dealings). For example, they may be debtors of the taxpayer or a taxpayer’s bank.

In order to recover money in this fashion, a written notice must be served on such persons, requiring them to pay money to the Commissioner to cover all or part of the taxpayer’s outstanding tax liability. A copy of this notice must also be provided to the taxpayer.

It is important to note that in some situations the Commissioner will also be able to apply these powers in relation to persons that are jointly and severally liable to pay tax (see clauses 58 and 59). This would include, for example, all members of a payroll tax group, such that a person owing money to any member of the group may be required to pay that money to the Commissioner to meet the tax liability of another group member.

Money required to be paid under a notice must be paid within 14 days after the notice is issued (or a longer period specified in the notice) or as soon as practicable after the money becomes due to the taxpayer, if that is after the date the money is payable.

The amount to be paid under these arrangements may be one payment of the full amount, or several instalment payments of amounts specified in the notice. This will allow the Commissioner to have regard to the amount of tax owing and any reasonable living costs of a taxpayer.

It is an offence for a person to not comply with a notice to pay money to the Commissioner.

The amount required to be paid by a person under a notice may be revoked or adjusted if part or all of the tax has been paid to the Commissioner before the due date for payment under the notice. This must be communicated to the affected person in writing.

Clause 61. Recovery from directors

This measure seeks to protect the Territory’s revenue by making directors of a company responsible for ensuring that the company takes normal commercial action to address the continued non-payment of tax. Such accountability is promoted by the Commissioner issuing a written notice to the directors requiring them to intervene within 28 days from the date of the notice to ensure that the company takes remedial action to address the non-payment. These notices must be given to directors personally or, if this in not practicable, they may be served on a director in accordance with clause 144, which provides how non-personal service may be effected.

Remedies available to a company to address the non-payment of tax are:
(i) paying the tax;
(ii) entering into an instalment arrangement to pay the tax. If a company fails to meet its obligations under an instalment arrangement, the company will continue to be in default of paying its tax debts and another notice can be issued to its directors under this clause;
(iii) entering into voluntary administration under the Corporations Act 2001; or
(iv) entering into liquidation.

If a company does not remedy its non-payment of tax by one of these methods within 28 days of the date of the notices being issued to its directors, the directors become jointly and severally liable with the company for the payment of any unpaid tax. It is important to note that the directors of a company will only become liable for the outstanding tax debts of the company after this process has been followed. It does not occur automatically after the company fails to pay its tax debts.

However, a director of the company will not be held liable for the payment of the company’s tax debts, if the director can establish that reasonable action was taken by them to ensure that the company remedied its non-payment, or the director was unable to take such action because of illness or some other reason.

Furthermore, a director who pays the debts of a company is entitled to be indemnified by the company for the amounts paid.

Division 3 – Statutory Charges

Clause 62. Definitions

This clause contains definitions for terms that only have application to this Division.

Clause 63. Power to secure tax by registration of statutory charge over land

Where a taxpayer acquires land through a taxable transaction or acquires an interest in a land-holding corporation and the tax in respect of that transaction or acquisition is not paid, the unpaid tax liability becomes an overriding statutory charge over the land acquired under the transaction or to which the company or its linked entities are entitled. This will also apply where a statement in relation to the acquisition of an interest in a land-holding corporation is not lodged within the required time.

Clause 64. Registration authority may be required to register charge

The registration authority must register the overriding statutory charge if the Commissioner lodges a request for a charge to be registered. A registered charge will have priority over all other registered and unregistered mortgages, charges and encumbrances except prior registered overriding statutory charges.

Clause 65. Notification of persons affected by charge

If a charge is registered, the registration authority must notify all persons who have a registered interest in the land (such as mortgagees with a registered mortgage over the land). The registration of the charge is not made invalid because such a person is not advised of the charge.

This requirement recognises that a registered overriding statutory charge over land takes precedence over all other interests in the land and that a person with an interest in that land should be notified that their interest is subordinate to that of the Commissioner.

Clause 66. Commissioner to give notice

The Commissioner must advise the registration authority in writing when the tax in respect of which the charge was registered has been paid.

A charge on land registered at the request of the Commissioner must be cancelled by the registration authority when:
(i) the Commissioner advises the registration authority that the tax has been paid;
(ii) the Commissioner advises the registration authority that the charge is no longer required; or
(iii) a stamped conveyance is lodged with the registration authority for registration, giving effect to the sale of the land under this Division (see clause 68 and 69).

Clause 67. Prohibition on dealings

The registration of a statutory charge in accordance with clause 64 prohibits the registration of any further instrument that affects the land, such as a mortgage or lease over that land, except where the Commissioner consents to the instrument being registered. The prohibition of future dealings in land, except those consented to by the Commissioner, secures tax revenue to which the Territory is entitled.

Clause 68. Application for order to sell land

The Commissioner may seek an order of the Supreme Court to sell land over which a charge has been registered in accordance with clause 64 if:
(i) the tax remains outstanding more than 18 months after it was due for payment; and
(ii) at least six months have elapsed since the Commissioner gave the taxpayer and anyone else with a registered interest in the land written notice that the Commissioner intends to apply to the Supreme Court to sell the land unless the tax is paid within six months.

Notice must be given to the taxpayer and anyone else with a registered interest personally, or if this is not practicable by non-personal service as provided under clause 144. If non-personal service is also impracticable, the Commissioner must post the notice on the land.

This process ensures that action to sell any land subject to a registered overriding statutory charge can only be taken for tax that remains outstanding after an extended period of time. It also ensures that anyone with a registered interest in the land is given sufficient notice of the intention to sell the land to recover the outstanding tax. This provides the owner of the land adequate time to make arrangements to pay the tax before any action to sell the land is instigated.

Clause 69. Order for sale of land

If the Commissioner applies to the Supreme Court to sell land subject to a charge, the Court must order the sale of the land on being satisfied that the tax remains outstanding and the Commissioner has complied with the requirements under this Division required to apply for the sale. The Commissioner’s application to the Supreme Court to sell land subject to a charge may relate to so much of the land that would enable the outstanding tax to be paid. That is, not all of the land subject to a charge may need to be sold.

To safeguard the interest of a purchaser of land that is sold under this clause, the conveyance of the land will be registered as if the original owner had agreed to the sale. The land will be transferred to the purchaser free of any other encumbrances.

Clause 70. Proceeds of sale

This clause clearly sets out the order in which debts will be paid from the proceeds of the sale of land under an overriding statutory charge. The owner of the land will receive the residue of the proceeds from the sale after the costs of sale, other statutory charges, the unpaid tax and mortgages are taken into account.

The proceeds of land sold under an overriding statutory charge are to be applied in the following order:

(i) costs, charges and expenses incidental to the sale;
(ii) payment owed under a law of the Commonwealth that has priority over the overriding statutory charge;
(iii) payment secured by another overriding statutory charge that was registered before that registered under this Division;
(iv) payment of the outstanding tax liability;
(v) payment secured by another overriding statutory charge that was registered after that registered under this Division;
(vi) payment secured by registered mortgages in order of priority;
(vii) payment secured by unregistered mortgages in order of priority; and
(viii) payment of the balance to the taxpayer

Clause 71. Other means of enforcement not affected

Where the Commissioner has a statutory charge registered over land, the Commissioner may still use other powers, such as those set out in clauses 60 and 61, to recover the outstanding tax.

Division 4 – Death of taxpayer

Clause 72. Death of taxpayer

The tax liability of a taxpayer, including interest and penalty tax, is not affected by the death of that taxpayer. Tax liabilities rank as the first charge of a deceased taxpayer’s estate. Powers and remedies under the taxation laws are available against the taxpayer’s personal representative and the taxpayer’s personal representative is responsible for the taxpayer’s non-pecuniary obligations, such as lodging returns or keeping records.

Division 5 – Waiver of tax

Clause 73. Waiver of tax

Tax liabilities may be waived, in either whole or part, if the amount waived is less that $20. Instruments to which the waiver relates may be stamped as though the correct amount of duty has been paid and would then be considered to be duly stamped.

PART 8 – RECORD KEEPING AND GENERAL OFFENCES

Clause 74. Requirement to keep proper records

A person is required to keep records that will allow their tax liability under a taxation law to be determined. This includes specific records that may be required to be kept under a taxation law.

It is an offence not to keep the required records.

Clause 75. Additional records

A person may be required to keep records in addition to those under clause 74. Such a requirement must be made to a person by notice in writing.

It is an offence not to keep these additional records.

Clause 76. Keeping records that contain misleading information

It is an offence for a person to knowingly keep a record that contains misleading information.

Clause 77. Accessibility

Records must be kept in such a manner that they are readily available, if requested by the Commissioner. It is an offence to not comply with this requirement.

It should be noted that this does not necessarily mean that records must be kept in the Territory or in any particular form, only that they must be made readily available if they are required.

If a person does not keep the required records so that they can be readily produced, the expense of gaining access to those records may be recovered from the person.

Clause 78. Form of record – English language and Australian currency

Records must be kept in English and amounts expressed in Australian currency or be kept in a way that is capable of being readily translated or converted into that form.

It is an offence if this requirement is not complied with.

Any cost incurred by the Commissioner in converting records into the required form may be recovered from the person required to keep the records.

Clause 79. Period of retention

A record must be kept for a period of no less than five years after the latter of the time:
(i) it was made or obtained; or
(ii) the transaction that it relates to was completed.

However, a record may be kept for less than five years if the Commissioner provides written approval. The approval only operates in relation to a taxation law and does not provide an exemption from other laws.

It is an offence for a person not to retain records for the required period.

Clause 80. Intentional damage to, or destruction of, records

Wilfully damaging or destroying records is an offence, unless the Commissioner has authorised or approved destruction of the records.

Clause 81. Evasion of tax

It is an offence to intentionally evade tax.

Furthermore, any other remedial action available under the new Taxation Administration Act, or any other law is not affected by a prosecution under this clause. This includes, for example, penalty tax and interest imposed for not paying tax on time.

Clause 82. Misleading information and documents

It is an offence for a person to make a statement or give a document to a tax officer that contains false or misleading information, or omits information that is material in nature, unless the person identifies the way in which the document is false or misleading and gives to the Commissioner or tax officer the necessary information to correct the statement or document.

Clause 83. Falsifying or concealing information

It is an offence for a person to falsify or conceal:
(i) specific details of a taxpayer; or
(ii) specific details of another person who may be able to provide information about a matter relating to the taxation laws; or
(iii) information otherwise relevant to the administration or enforcement of a taxation law.

Clause 84. Failure to lodge documents

Failure to lodge a document or return within the required time is an offence.

Clause 85. Non-compliance with other requirements of a taxation law

Where a person is required under a taxation law to do certain actions (other than make a payment) and it is not specifically listed as an offence, then a failure to meet that requirement is an offence under this provision.

Clause 86. General defence under this Part

If a person can prove that they took reasonable care in complying with the relevant provision or that the contravention arose because of factors solely beyond the control of the person; they may use such proof as a defence for not complying with an offence under this Part.

PART 9 - INVESTIGATIONS

Division 1 – Preliminary matters

Clause 87. Definitions

This clause contains definitions for terms that only have application to this Part.

Clause 88. Authorised investigations

An authorised investigation is defined as an investigation undertaken by an authorised officer for one of more of the following purposes:

(i) ascertain whether a tax liability exists;
(ii) assess a tax liability;
(iii) decide an application, such as a first home owner grant application;
(iv) audit records;
(v) gather information relevant to an objection or appeal;
(vi) ascertain a person’s entitlement to a grant, concession, rebate or exemption;
(vii) ascertain whether grant, concession or exemption conditions are met;
(viii) ascertain whether a contravention of a taxation law has occurred or to gather evidence about a suspected contravention;
(ix) gather information or evidence otherwise relevant to the administration and enforcement of a taxation law.

Clause 89. Investigations for purposes of corresponding laws

The Commissioner may conduct an investigation on behalf of a corresponding authority, or authorise them to carry out an investigation, for the purposes of a corresponding law under this Part. This means, for example, that another state revenue authority may conduct an audit in the Northern Territory for the purposes of administering that state’s payroll tax laws, or the Commissioner may conduct a payroll tax audit in the Northern Territory for that state.

For the purposes of an investigation under this clause, references to ‘tax’, ‘tax liability’, ‘records required to be kept’ and ‘taxation law’ in this Part are taken to be the same as the corresponding meanings under a corresponding law.

If the Commissioner authorises a corresponding authority to carry out an investigation, references to ‘Commissioner’, ‘authorised officer’ and ‘identity card’ are also taken to have the same meaning as similar terms under a corresponding law.

Division 2 – Powers of investigation

Clause 90. Access to public records without fee

For the purposes of an authorised investigation, an investigator is able to inspect and take copies of public records without paying any fee for doing so.

Clause 91. Power to request information and production of records

For the purposes of an authorised investigation, an investigator may, either orally or by written notice, request a person to provide specified information or material. The investigator must advise that the information or material is required for the purposes of an authorised investigation. If the person to whom the notice is addressed is under investigation, the person must be advised of that.

The information requested may be required to be verified by a statutory declaration, may be provided to any other authorised officer and must be provided to the best of the person’s knowledge, information and belief.

It is an offence not to comply with any of these requirements.

Clause 92. Power to require person to attend for examination

An investigator may require a person to attend an examination, by giving the person a written notice setting out the time and place for the examination and its subject matter. The investigator may:

(i) require the person to bring and produce relevant material;
(ii) require the person to answer questions on oath or affirmation;
(iii) administer the oath or affirmation; and
(iv) record any oral evidence given by the person.

The Commissioner may reimburse reasonable travelling expenses incurred by a person that attends for an examination.

It is an offence if a person does not comply with the requirements under this clause and answer questions to the best of their knowledge, information and belief.

Clause 93. Power to enter premises

An investigator may enter any premises if they suspect there is relevant material on the premises. However, the investigator can only enter residential premises if they have the occupiers consent or the authority of a search warrant. Non-residential premises may be entered without the occupiers consent or a search warrant.

In addition, residential premises may be entered without the occupiers consent or a search warrant, if the Commissioner authorises such entry if there are reasonable grounds to suggest that it is necessary to prevent destruction or interference with relevant material. Such an authorisation cannot be provided if a search warrant application has been refused within 14 days prior.

When on premises, the investigator must show their identity card to any person on the premises that requests to see the card.

Clause 94. Search warrants

A Justice of the Peace may issue a search warrant if satisfied that an investigator has reasonable grounds for suspecting that there is relevant material on the premises for which the warrant is being sought. Any investigator may execute a search warrant.

The warrant enables an investigator to enter premises specified in the warrant to carry out a search of the premises under this Part.

When on premises as a result of executing a search warrant, the investigator must show the warrant to any person on the premises that requests to see the warrant.

Clause 95. Powers of authorised officers while on premises

This clause lists the investigative powers that an investigator may exercise while on premises. These include the power to search, photograph anything, copy material or question or direct people on the premises to aid in an investigation.

Searching premises includes the power to break things open if this is necessary, however, this is subject to specific authorisation by the Commissioner.

An investigator may also remove relevant material from property, but is required to issue a receipt in respect of all material taken.

It is an offence if a person on the premises does not comply with a request made of that person under this clause by an investigator.

Division 3 – Ancillary provisions

Clause 96. Authorised officer may obtain assistance

An investigator may exercise their power with the assistance of others. For example, an investigator may utilise the services of a locksmith to gain access to a locked container or utilise the services of an information technology expert to assist in gaining access to computer files.

Clause 97. Obstructing etc. authorised officer

It is an offence to obstruct or hinder an investigator or their assistant during an investigation under this Part. It is also an offence to refuse or fail to comply with a requirement of an investigator without a reasonable excuse. Each of these is a separate offence.

Clause 98. Use of force

An investigator may use reasonable force to exercise powers of entry and search. However, the Commissioner must authorise the use of such force if it is likely to damage property.

Clause 99. General defence

It is a defence to any offence under this Part involving failure to comply with a requirement or request of an investigator, if it can be established that the investigator had not identified themselves as such by showing the investigator’s identity card and did not warn a person that failure to comply with a requirement may constitute an offence.

Clause 100. Self-incrimination

A person cannot refuse to answer a question or provide information or a document because it could incriminate them or make them liable to a penalty. The provision of such information can only be used against the person in a proceeding under a taxation law or for perjury. It cannot be used for any other criminal proceedings.

PART 10 – DISCLOSURE OF INFORMATION

Clause 101. Definitions

This clause contains definitions for terms that only have application to this Part.

Clause 102. Prohibition on certain disclosures of information by tax officers

It is an offence for a tax officer to disclose confidential information (ie. information obtained under a taxation law about the personal affairs of a person that is not in the public domain) except as permitted under this Part.

Permitted disclosures of confidential information are:
(i) while carrying out official functions for administering or enforcing a taxation law;
(ii) to a corresponding authority if relevant for administering or enforcing a corresponding law;
(iii) to the Auditor-General, the Ombudsman, Treasury employee, the Registrar of Motor Vehicles or the Valuer-General;
(iv) to the person about whom it relates or with the consent (including complied consent) of that person to someone that appears to be a representative of that person;
(v) to a law enforcement agency as defined in clause 101; or
(vi) those authorised by regulation.

Clause 103. Obligations of persons (other than tax officers) who gain access to confidential information

It is an offence if a person (other than a tax officer) discloses information lawfully obtained under this Part, unless the disclosure is necessary for the purposes for which the information was disclosed or the Commissioner provides authorisation.

It is an offence if a person (other than a tax officer) receives confidential information without authority and discloses that information, unless the disclosure is authorised by the Commissioner. For example, a person receiving information without authority may be a person employed as a cleaner who reads confidential information while cleaning the office of a tax officer.

Clause 104. Compellability of disclosure before court

A tax officer, or former tax officer, can not be compelled to disclose any confidential information to a court, except for the purposes of administering or enforcing a taxation law.

Clause 105. Protection of tax informants

A tax officer, or former tax officer, cannot be compelled to disclose to a court or any other person information concerning a tax informant, such as their identity, the information provided and whether information led to an investigation or prosecution.

Clause 106. Required disclosures of information

Northern Territory government bodies are required to disclose to the Commissioner information held by them that is relevant for the administration or enforcement of a taxation law. The requirement to provide information under this clause prevails over any other legislation.

The primary use for this power is to enable the Commissioner to access information and databases necessary for effective investigation and data-matching required to administer the taxation laws. Information provided in this manner must be provided free of charge.

Any information obtained under this clause is subject to the rules detailed in this Part, such that its usage (and disclosure) is tightly controlled.

PART 11 – OBJECTIONS AND APPEALS

Division 1 – Preliminary

Clause 107. Definitions

This clause contains definitions for terms that only have application to this Part.

Clause 108. Certain decisions not subject to challenge except in proceedings by way of objection or appeal

This clause abrogates the right to have assessments or decisions affecting a taxpayer’s liability reviewed other than through the objection and appeal process provided for under the new Taxation Administration Act. This ensures that other means of review (provided by common law) are not used to by-pass the formal objection and appeal process, but only for these types of decisions. Other decisions remain open to reviews available under the common law.

This approach replicates that under the current Pay-roll Tax Act and Taxation (Administration) Act.

Division 2 - Objections

Clause 109. Right to object

A person affected by a relevant decision has a right to object to that decision.

If the relevant decision is a reassessment of a tax liability which increases the amount of a previous assessment, the right to object against that decision is limited to the extent that the decision increased the previous assessment.

Clause 110. How to object

An objection must:
(i) be in writing;
(ii) be lodged within 60 days after the decision is issued; and
(iii) set out fully the grounds on which it is based.

Clause 111. Objections lodged out of time

The Commissioner or Mineral Royalty Secretary may allow a person to lodge an objection outside of the permitted 60-day period, if satisfied that the person has a reasonable excuse for not lodging an objection within that period.

A person who wishes to lodge an objection outside of the 60-day period must make an application in writing, setting out the reasons for failing to lodge the objection within that period.

Clause 112. Onus on the objector

The onus is on the taxpayer to establish that the decision was wrong.

Clause 113. Decision on objection

The Commissioner or Mineral Royalty Secretary must consider all valid objections and may either:
(i) allow them in whole or in part; or
(ii) disallow them.

In relation to a royalty assessment, if the objection alleges that the Minister has incorrectly exercised a discretion under the Mineral Royalty Act, the objection must be referred to the Minister, who must consider it within 60 days, confirm or vary the exercise of discretion and inform the Mineral Royalty Secretary of the Minister’s decision. The Mineral Royalty Secretary must give effect to the Minister’s decision for the purpose of determining the objection.

Clause 114. Notice of decision

Written notice of the objection decision must be provided to the objector. Where the objection has been disallowed, or only allowed in part, the notice must include the reasons for the decision and set out rights and procedures for appealing the objection decision.

Division 3 – Right of appeal

Clause 115. Appeal to Tribunal or Supreme Court

Taxpayers have the right to appeal against an objection decision to either the Tribunal or the Supreme Court, but not both. However, objections against a first home owner grant objection decision can only be appealed to the Tribunal. This reflects the current arrangement for first home owner grant decisions.

Clause 116. Onus on the appellant

The onus is on the taxpayer to establish that the objection decision was wrong.

Clause 117. Time for commencing appeal

A person has 60 days after the date of the objection decision notice to commence an appeal. The Tribunal or Supreme Court may extend this 60-day period if satisfied that the taxpayer has a reasonable excuse. Applications for extension of time must be made in writing in accordance with the rules of the Tribunal or Supreme Court and must set out fully the reasons for not commencing an appeal within the 60-day period.

Division 4 – Appeals to Tribunal

Clause 118. How to commence an appeal to Tribunal

Appeals to the Tribunal are commenced by lodging a notice of appeal with the Registrar. This clause also provides for the form of the notice of appeal, information to be included in the notice, relevant material to accompany the notice of appeal and that a prescribed fee must be paid.

The grounds of appeal are not limited to the grounds of the objection.

Clause 119. Service of notice on the decision maker

A copy of the notice of appeal and the relevant material must be served on the Commissioner or Mineral Royalty Secretary within seven days after the notice of appeal is lodged.

Clause 120. Response of decision maker to notice of appeal

The Commissioner or Mineral Royalty Secretary must, after receiving a copy of the notice of appeal, lodge with the Registrar all of the documents relevant to the appeal and any submissions that the decision maker wishes to make. These submissions are not limited to the reasons for disallowing or partly allowing the objection.

Clause 121. Reference of appeal to Supreme Court

The Tribunal may refer an appeal to the Supreme Court. This could occur if the Tribunal considers the appeal involves complex issues and, as a result, it is more appropriate that the Supreme Court decide the appeal.

Any appeal referred to the Supreme Court under this clause will be concluded in the Supreme Court. It is not possible for the Tribunal to also consider a matter once it has been referred to the Supreme Court.

Clause 122. Determining appeal

The powers of the Tribunal in deciding an appeal are limited to the following:
(i) confirm the decision;
(ii) vary the decision;
(iii) substitute another decision that would have been available to the Commissioner or Mineral Royalty Secretary.

Clause 123. Appeal to Supreme Court on question of law

The taxpayer or Commissioner or Mineral Royalty Secretary may appeal to the Supreme Court against the Tribunal’s decision on a question of law only. This is consistent with the normal procedure for court appeal processes.

The powers of the Supreme Court in deciding an appeal are limited to the following:
(i) confirm the Tribunal’s decision;
(ii) vary the Tribunal’s decision;
(iii) substitute its own for that of the Tribunal; or
(iv) remit the matter back to the Tribunal for reconsideration with reasons and appropriate directions about the matters to be reconsidered.

If the matter is remitted back to the Tribunal, the Tribunal must vary or substitute its earlier decision in accordance with the directions provided by the Supreme Court.

Division 5 – Appeals to Supreme Court against decision on an objection

Clause 124. How to commence appeal

Appeals are to be commenced in the Supreme Court in accordance with the procedures set out in the Supreme Court Rules.

Clause 125. Grounds of appeal and response

The taxpayer’s grounds of appeal are not limited to the grounds of the objection and the Commissioner’s or Mineral Royalty Secretary’s response is not limited to the reasons for disallowing the objection or partly allowing it.

Clause 126. Admissibility of new evidence

In an appeal directly from an objection decision (not an appeal from a Tribunal decision) the Supreme Court may admit new evidence that was not before the Commissioner or Mineral Royalty Secretary on objection, if satisfied that the evidence is material to the decision. If the Court admits new evidence, the Commissioner or Mineral Royalty Secretary must be given the opportunity to reconsider the decision in light of the new evidence and make a new decision, unless the Commissioner or Mineral Royalty Secretary asks the Court to continue with the appeal.

If the new decision is acceptable to the taxpayer, the Court will resolve the appeal in accordance with that decision. If the new decision is not acceptable to the taxpayer, the Court will continue with the appeal in relation to the new decision.

Where the new decision is favourable to the taxpayer, the Court may order the taxpayer to pay all or part of the Commissioner’s or Mineral Royalty Secretary’s costs. This recognises that the appeal may have been unnecessary if that evidence was originally provided to the Commissioner or Mineral Royalty Secretary when deciding the objection.

Clause 127. Determining appeal

The powers of the Supreme Court in deciding an appeal are limited to the following:
(i) confirm the decision;
(ii) vary the decision; or
(iii) substitute another decision that would have been available to the decision maker.

Division 6 – Other matters

Clause 128. Objection or appeal not to suspend recovery of tax etc

The lodgement of an objection or appeal does not affect the operation of a relevant decision or the recovery of a tax liability or other amount. This means that, even though a tax liability or repayment of a first home owner grant may be in dispute, the person must still pay the amount recoverable and the Commissioner may exercise his powers available to recover any amount that is unpaid.

Clause 129. Giving effect to decision on objection or appeal

The Commissioner must give effect to objection and appeal decisions by:
(i) making a reassessment in accordance with the decision, if it affects an assessment; and
(ii) making any payment to give effect to the decision.

If as a result of a decision any amount is found to be payable, the Commissioner may recover that amount as a debt due to the Territory.

If an objection or appeal decision is subject to appeal or further appeal, the Commissioner is not required to give effect to the decision until the period in which to commence an appeal has expired or, if appeal proceedings have been commenced, when all appeal proceedings have been finalised.

Amounts refunded as a result of an objection or appeal decision must include interest at the market interest rate as set out in clause 35 and must be calculated from the date the amount refundable was paid by the taxpayer, until the date the refund is made.

PART 12 – TAXATION AND ROYALTY APPEALS TRIBUNAL

Clause 130. Tribunal and its jurisdiction

This clause provides that the established Tribunal continues in existence and has the jurisdiction conferred on it by the new Taxation Administration Act. The Tribunal is constituted by the Chief Magistrate or a magistrate chosen by the Chief Magistrate.

Clause 131. Conduct of appeals generally

The Tribunal is bound by the rules of natural justice, but not the rules of evidence and must determine an appeal ‘on the papers’ submitted by the parties to the appeal, unless satisfied that it is necessary to conduct a hearing in view of the nature and circumstances of appeal.

The practice and procedure of the Tribunal is prescribed by any rules and practice directions of the Tribunal or as determined by the Tribunal (where there are no such rules or practice directions). The Tribunal must keep a record of its proceedings and publish written reasons for its decisions.

Clause 132. Costs

In general, parties to an appeal to the Tribunal bear their own costs. However the Tribunal can order a party to bear all or part of the costs of the other party, where it considers it fair to do so, having regard to the factors set out in paragraphs (a) to (d) of new subclause (2).

The Tribunal may order a representative of a party to the appeal to pay the cost of the other party to the appeal, in their own capacity, where the Tribunal considers that the representative’s conduct is responsible for costs being awarded against the party. For example, if a representative conducts an appeal in a way that unnecessarily disadvantages another party to the appeal, such as unreasonably prolonging the time taken to complete the appeal, the representative may be liable for costs personally.

Clause 133. Rules and practice directions

The Chief Magistrate may make rules about the practice and procedure of the Tribunal, prescribe fees or issue practice directions in respect of appeals to the Tribunal.

Clause 134. Contempt

It is an offence to:
(i) insult the Tribunal or a magistrate;
(ii) interrupt or obstruct a hearing;
(iii) or do anything that would amount to contempt in a court.

PART 13 – PROSECUTIONS AND OFFENCE PROVISIONS

Division 1 - Prosecutions

Clause 135. Time for commencing prosecutions

Taxation prosecutions must be commenced within five years of any alleged offence being committed. The exception is for tax evasion, where there is no time limit for commencing a prosecution.

Clause 136. Evidentiary matters

Any allegation of fact by the prosecution in the documents lodged in a prosecution, such as the information or complaint, is taken to be evidence for the purpose of a taxation prosecution, unless it relates to:
(i) allegations of intent; or
(ii) proceedings concerning an offence that is indictable or punishable by imprisonment.

This provision does not operate to the exclusion of other evidence and all relevant evidence must be considered on its merits. This means that if evidence is provided that is contrary to an allegation of fact made by the prosecutor, then that evidence must be balanced against the allegation (and any corroborating evidence) to determine what the actual facts are.

Division 2 – Offence provisions

Clause 137. Offences by persons involved in management of companies

Where a company commits an offence against a taxation law, certain people involved in the management of that company are also taken to have committed an offence, and will be liable for the same penalty as the company.

For the purpose of this clause, a number of positions (such as a director and secretary of a company) and statutory appointments (including a receiver and manager of property of the company) are considered to be involved in the management of a company. Details of these positions and appointments are provided in clause 137(5).

A person will be taken not to have contravened a provision where they can show that:
(i) the company contravened the provision without the person’s knowledge and that lack of knowledge was not a result of lack of care;
(ii) the person was not in a position to influence the conduct of the company in relation to the contravention; or
(iii) the person used their best endeavour to prevent the contravention by the company.

A person can be convicted of a contravention of a taxation law even though the company may not be charged with, or convicted of, that contravention. The conviction of a person for a contravention of a taxation law does not affect the liability of the company.

Clause 138. Further offences

If a person is convicted of an offence under a taxation law, and continues to contravene the same provisions of the taxation law, they may be convicted of a further offence under the same provision.

If the person is convicted of a second offence under the same provision as the first offence, the maximum penalty for the further offence is double the penalty of the first offence, but only if the second contravention occurs within five years of the first.

Division 3 – Effect of criminal penalty

Clause 139. Effect of criminal penalty

A taxpayer’s tax liability remains unaffected by the imposition of a criminal penalty by a court.

PART 14 - MISCELLANEOUS

Division 1 – Appropriation

Clause 140. Appropriation of Central Holding Authority

Where the Commissioner is authorised or required to pay an amount under a taxation law, that amount is to be paid from the Central Holding Authority.

Division 2 – Notice of certain appointments to be given

Clause 141. Notice of appointment of administrator or liquidator

If a corporate taxpayer has a liquidator or administrator appointed under the Corporations Act 2001, the appointed person must notify the Commissioner within 30 days of that appointment.

If a taxpayer is absent from the Territory and another person has been appointed to wind up the business of the taxpayer, that person must notify the Commissioner within 30 days of that appointment and set aside assets to satisfy the taxpayer’s liabilities. If that person does not comply with these requirements, they may be personally liable for any unpaid tax.

It is an offence not to comply with any of the above requirements.

Division 3 – Service of Documents

Clause 142. Service of documents on Commissioner

The mechanisms by which a document may be served on the Commissioner are:

(i) delivering documents to the offices of the Commissioner;
(ii) leaving it with a person who has authority to accept documents for the Commissioner;
(iii) posting documents to the Commissioner’s postal address that must be a post office box or locked bag at a post office;
(iv) faxing to a nominated fax number; or
(v) by any other means approved by the Commissioner. For example, email or by document exchange.

Clause 143. Time of Service

Where a document or a payment of money is received by the Commissioner after the ordinary hours of business when the office of the Commissioner is open to the public, the document or payment will be taken to have been served or tendered on the next business day.

Clause 144. Service of documents by Commissioner

A document may be served on a person by the Commissioner giving it to them personally; leaving it at or posting it to their last known residential or business address (including a post box used by the person and the registered or business address of a corporation); email, facsimile transmission or by delivering it, addressed to the person, to the facilities of a document exchange; or by other means provided by another law or Act.

Clause 145. Service on an agent and other forms of subrogated service

A document is taken to have been served by the Commissioner on a principal, if it is served on the agent’s principal who has actual or apparent authority to accept service.

A document will also be taken to have been served by the Commissioner on each of the following persons:
(i) all partners in a partnership;
(ii) all members of an unincorporated association’s management; or
(iii) all taxpayers jointly liable,
where one partner, member or taxpayer have been served.

Division 4 - Evidence

Clause 146. Judicial notice of Commissioner’s name and signature

This provision assists with Northern Territory legal proceedings as it removes the requirement to prove that the Commissioner has signed a document. This supplements section 36 of the Evidence Act, which does not explicitly list the Commissioner to be a person whose signature will be taken on judicial notice.

This also applies to a former Commissioner and a person who has acted as a Commissioner.

Clause 147. Presumption of regularity as to issue of documents

This provision assists with legal proceedings, and allows certain presumptions to be made regarding documents that appear to have been signed by the Commissioner or a person described as a delegate of the Commissioner. In the absence of evidence to the contrary, the documents are taken to have been lawfully issued under the authority of the Commissioner at the time that they appear to have been issued or prepared.

Clause 148. Evidentiary value of notice or certificate

For the purposes of providing evidence, in any legal proceedings (except those by way of objection or appeal under the new Taxation Administration Act), a decision, determination or assessment made by the Commissioner must be accepted as valid and correct.

Similarly, a certificate or notice of a decision is to be accepted in any legal proceedings as proof of the making of a decision, determination or assessment on the terms as set out in the certificate or notice.

Clause 149. Certificate evidence

This provision assists with legal proceeding instituted under a taxation law, by allowing the admission of a certificate of evidence provided by the Commissioner.

In the absence of evidence to the contrary, the certificate is conclusive proof of any of the following matters contained in the certificate:
(i) that a person named is liable to pay tax, was liable to pay tax on a specified day, or paid tax on a specified day;
(ii) that a decision, determination or assessment was issued to the person or their agent, and when that notice was issued;
(iii) the amount of tax, penalty or interest that is payable or the amounts paid, whether in whole or part;
(iv) that a document has been served on a person and the time service occurred;
(v) that a person is, or is not, registered or licensed at a specified date, as required by a taxation law;
(vi) that a person has, or has not, complied with a specified requirement of a taxation law;
(vii) that a return required by a taxation law to be lodged has, or has not, been lodged as at a specified date;
(viii) a document was not received by the Commissioner at all, or it was received on a specified date; and
(ix) that a person is or was an authorised officer on a certain date.

Division 5 - Regulations

Clause 150. Regulations

The Administrator may make regulations, including prescribing fees for making any of the following:
(i) an application;
(ii) a request;
(iii) an objection or appeal; or
(iv) for any other service provided by the new Taxation Administration Act.

PART 15 – TRANSITIONAL PROVISIONS

Clause 151. Definitions

This clause contains definitions for terms that only have application to this Part.

Clause 152. Administration

Persons holding office as Commissioner or Deputy Commissioner continue as such from 1 January 2008 and the terms and conditions on which they hold office are unaffected by this clause.

A person holding office as Assistant Commissioner will continue in office as a Deputy Commissioner from 1 January 2008 and the terms and conditions on which they hold office are unaffected by this clause.

Uncompleted legal proceedings against the Commissioner of Taxes may be continued against the Commissioner of Territory Revenue.

References to the Commissioner of Taxes in any legislation or instrument are taken as references to Commissioner of Territory Revenue.

Clause 153. Investigators

An investigator appointed under the Taxation (Administration) Act, Stamp Duty Act, Pay-roll Tax Act and First Home Owner Grant Act as they existed before 1 January 2008 (the old laws) will continue in that role from 1 January 2008 and be able to apply the new powers available to investigators under the new Taxation Administration Act .

Clause 154. Assessments

The provisions of the new Taxation Administration Act relevant to the assessment of tax will apply to tax liabilities that were incurred before 1 January 2008.

An assessment made under the old laws can be reassessed under the new Taxation Administration Act. However, a stamp duty liability that was assessed before 1 January 2005 cannot be reassessed under the new Taxation Administration Act. This quarantines stamp duty assessments made before that date from the operation of the new Taxation Administration Act, recognising that the old Taxation (Administration) Act has a reassessment period of only three years.

Clause 155. Refunds of tax

The refund provisions of the new Taxation Administration Act apply to amounts paid before 1 January 2008.

Clause 156. Interest and penalty tax

Under the Taxation (Administration) Act and Pay-roll Tax Act prior to 1 January 2008, there was no legislative provision for a liability to pay interest on an outstanding tax default (it was applied administratively as a component of penalties). This clause provides that where a tax default is outstanding as at 1 January 2008, interest is payable on the tax default as though the new Taxation Administration Act had commenced prior to the tax default occurring.

Penalty tax may be imposed under the new Taxation Administration Act for tax defaults that occurred before 1 January 2008. Similarly, the powers to remit interest or penalty tax under the new Taxation Administration Act may be exercised in relation to tax defaults and penalty or additional tax payable under the old laws.

Taken together, this means that all assessments issued from 1 January 2008 will apply the interest and penalty provisions of this new Taxation Administration Act.

Clause 157. Special arrangement for filing returns or paying tax

Subject to revocation by the Commissioner, approvals for special arrangements for filing returns or paying tax under the old laws continue from 1 January 2008, as if they applied under Part 6 of the new Taxation Administration Act.

Clause 158. Collection and recovery of tax

The payment and recovery of tax provisions in Part 7 of the new Taxation Administration Act apply to tax liabilities incurred before 1 January 2008, except for the power to secure tax by placing a statutory charge over land provided for in Division 3 of Part 7, which only applies from 1 January 2008.

Clause 159. Records

The record keeping requirements in Part 8 of the new Taxation Administration Act apply to tax liabilities incurred before 1 January 2008.

Clause 160. Investigations

The investigation provisions in Part 9 of the new Taxation Administration Act apply to tax liabilities incurred or offences committed before 1 January 2008.

Clause 161. Disclosure of information

The disclosure of information provisions in Part 10 of the new Taxation Administration Act apply to confidential information obtained before 1 January 2008.

Clause 162. Objection and appeals

The objection and appeal provisions in Part 11 of the new Taxation Administration Act apply to decisions made before 1 January 2008. However, the old laws will continue to apply to objections and appeals commenced before 1 January 2008 and to any further appeals that those proceedings lead to.

Clause 163. Offences

The provisions of the new Taxation Administration Act concerning the time for commencement of tax prosecutions apply to offences alleged to have been committed before or after 1 January 2008. The new Taxation Administration Act would not apply to the prosecution of an offence that commenced before that date.

Clause 164. Evidence

The provisions concerning the creation of evidentiary presumptions or certificate evidence apply to causes of action or tax liabilities arising before 1 January 2008.

Clause 165. Substantive criminal law unaffected by this Part

The question of whether an offence has been committed is determined on the law in effect at the time of the alleged offence. It also means that the penalty for an offence is that in force at that time. For example, if an alleged offence occurred before 1 January 2008 but is not identified until after that date, the law in force at the time of the alleged offence will apply to any considerations regarding the alleged offence.

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