State Taxation Acts (General Amendment) Act 2005

State Taxation Acts (General Amendment) Act 2005

Act No. 36/2005

table of provisions

SectionPage

Part 1—Preliminary

1.Purposes

2.Commencement

Part 2—Business Franchise (Petroleum Products) Act 1979

3.Better Roads Victoria Trust Account

Part 3—Debits Tax Act 1990

4.New section 22 inserted

22.Liability to debits tax discontinued

5.Returns

Part 4—Duties Act 2000

6.Definition

7.Consequential repeals

8.Interdependent sale of land and business goods

9.Sub sales of land

10.New Part 4A inserted in Chapter 2

Part 4A—Transactions Treated as Sub-sales of Land

Division 1—Introduction

32A.Definitions

Division 2—Transfers Involving Additional Consideration

32B.Application of Division

32C.How duty is charged on transfer

32D.Dutiable value of transactions

32E.When does the liability to duty arise?

32F.Who is liable to pay the duty?

32G.Exemptions and concessions

32H.No double duty

Division 3—Transfers Involving Land Development

32I.Application of Division

32J.How duty is charged on transfer

32K.Dutiable value of transactions

32L.When does the liability to duty arise?

32M.Who is liable to pay the duty?

32N.Exemptions and concessions

32O.No double duty

Division 4—Transfers Resulting from Options

32P.Application of Division

32Q.How duty is charged on transfer

32R.Dutiable value of transactions

32S.When does the liability to duty arise?

32T.Who is liable to pay the duty?

32U.Exemptions and concessions

Division 5—Miscellaneous

32V.Provisions for determining consideration

32W.No duty for transactions between relatives

32X.Parties required to provide information to
Commissioner

11.Repeal of certain exemptions

12.Extension of temporary suspension of first home owner exemption or concession

13.Land rich provisions

14.New section 89PA inserted

89PA.Registration of declared wholesale unit trust schemes

15.Further provisions for declared wholesale unit trust schemes

16.New section 125A inserted

125A.Hire of goods duty abolished from January 2007

17.Consequential amendments on abolition of hire of goods duty

18.Repeal of motor vehicle exemption

19.Corporate reconstructions

20.New Division 1A inserted in Part 2 of Chapter 11

Division 1A—Corporate Consolidation Exemption

250DA.Definitions

250DB.What is a corporate consolidation?

250DC.What is an eligible transaction?

250DD.Exemption for certain transactions arising out of corporate consolidation

250DE.Conditions of exemption

250DF.Revocation of exemption

250DG.Special provision in relation to land-rich duty for
private unit trust scheme consolidations

21.Further corporate reconstruction amendments

22.Transitional provisions

21.State Taxation Acts (General Amendment)
Act 2005

Part 5—First Home Owner Grant Act 2000

23.Extension of additional amount of grant

Part 6—Land Tax Act 1958

24.Definitions

25.Minimum assessment

26.Exemption for residential care facilities and supported
residential services (from January 2004)

27.Exemption for caravan parks (from January 2005)

28.New section 9A inserted (from January 2004)

9A.Rooming house exemption

29.Special land tax

30.Principal place of residence exemption

31.New sections 72 and 73 substituted, 73A and 73B inserted

72.Power to require information, documents and things, andattendance

73.Powers of Supreme Court if non-compliance with section 72

73A.Power of entry

73B.Self-incrimination

32.New tax rates and rebates

6A.Rebate of 2005 land tax

7.Land tax for 2006

8.Land tax for 2007

9.Land tax for 2008 and subsequent years

Part 7—Pay-roll Tax Act 1971

33.Employment agents

34.Exemption for wages paid by school councils (from July 2004)

Part 8—Taxation Administration Act 1997

35.Interest rate

36.Penalty tax

37.Secrecy provisions

38.Valuation of foreign currency

Part 9—Taxation (Interest on Overpayments) Act1986

39.Interest rate

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Endnotes

SectionPage

Victoria

No. 36 of 2005

SectionPage

State Taxation Acts (General Amendment) Act 2005[†]

[Assented to 28 June 2005]

Act No. 36/2005

State Taxation Acts (General Amendment) Act 2005

Act No. 36/2005

State Taxation Acts (General Amendment) Act 2005

The Parliament of Victoriaenacts as follows:

Part 9—Taxation (Interest on Overpayments) Act1986

State Taxation Acts (General Amendment) Act 2005

Act No. 36/2005

Part 1—Preliminary

1.Purposes

The purposes of this Act are—

(a)to amend the Business Franchise (Petroleum Products) Act 1979 to broaden the purposes of the Better Roads Victoria Trust Account;

(b) to amend the Debits Tax Act 1990 to discontinue debits tax from 1 July 2005;

s. 1

(i)to discontinue hire of goods duty from 1 January 2007;

(ii) to clarify the way certain transactions are chargeable with duty;

(iii) to remove certain exemptions;

(iv) to clarify the land-rich provisions;

(v)to extend the corporate reconstruction exemption to corporate consolidations;

(d) to amend theFirst Home Owner Grant Act 2000 to extend the period of the additional amount of the grant;

(e) to amend the Land Tax Act 1958—

(i)to revise the rates of land tax from 2006, provide a partial rebate of 2005 land tax and cap increases in land tax for 2006;

(ii) to exempt privately-owned caravan parks, residential aged care facilities, supported residential services and certain rooming houses from land tax;

(iii) to clarify the way refunds of land tax are calculated for land that becomes a principal place of residence;

(iv) to align investigatory powers with those in the Taxation Administration Act 1997;

(f) to amend the Pay-roll Tax Act 1971 to exempt wages paid by school councils from pay-roll tax;

(g) to amend the Taxation Administration Act 1997—

(i)with respect to interest rates, exchange rates and penalty tax;

(ii)to permit disclosure of information to the fire services;

(h) to amend the Taxation (Interest on Overpayments) Act 1986with respect to interest rates.

2.Commencement

s. 2

(1)This Act, except Parts 2, 3, 5and 7and sections12, 13(1), 19, 20, 21, 24(2), 24(3), 26, 27, 28, 29 and30, comes into operation on the day after the day on which it receives the Royal Assent.

(2)Sections 24(3), 26, 28 and29(except sub-section(2)) are deemed to have come into operation on 1 January 2004.

(3) Section 13(1) is deemed to have come into operation on 13 May 2004.

(4) Part 7, except section 33, is deemed to have come into operation on 1July 2004.

(5) Sections 24(2), 27, 29(2),30and 33are deemed to have come into operation on 1January 2005.

(6) Sections 19, 20 and 21are deemed to have come into operation on 31 March 2005.

(7) Parts 2, 3and 5and section 12are deemed to have come into operation on 1July 2005.

______

See:
Act No.
9272.
Reprint No. 4
as at
19 March 1998
and amending
Act Nos
103/1998, 6/2000 and 12/2004.
LawToday:

dpc.vic.
gov.au

Part 2—Business Franchise (Petroleum Products) Act 1979

3.Better Roads Victoria Trust Account

s. 3

In section 13(3) of the Business Franchise (Petroleum Products) Act 1979, after "2004"insert ", road safety initiatives and traffic and transport integration programs,".

______

See:
Act No.
78/1990.
Reprint No. 2
as at
18 March 1999
and amending
Act Nos
34/1999 and 47/1999.
LawToday:

dpc.vic.
gov.au

Part 3—Debits Tax Act 1990

4.New section 22 inserted

s. 4

After the heading to Part 8 of the Debits Tax Act 1990 insert—

"22.Liability to debits tax discontinued

Liability to pay debits tax on a taxable debit or eligible debit does not arise under this Act if the debit is made on or after 1 July 2005.".

5.Returns

(1)After section 28(4) of the Debits Tax Act 1990 insert—

"(5)Sub-section (1) does not require a return relating to any month after June 2005 to be lodged.".

(2) After section 55(1) of the Debits Tax Act 1990 insert—

"(2) Sub-section (1) does not require a return relating to an exempt account kept on or after 1 July 2005 to be lodged.".

______

See:
Act No.
79/2000.
Reprint No. 4
as at
1 March 2005.
LawToday:

dpc.vic.
gov.au

Part 4—Duties Act 2000

6.Definition

s. 6

In section 3(1) of the Duties Act 2000, in the definition of "wholesale unit trust scheme", for "oran imminent wholesale unit trust scheme" substitute ", an imminent wholesale unit trust scheme or a declared wholesale unit trust scheme".

7.Consequential repeals

Sections 10(1)(f) and 21(2) of the Duties Act 2000 are repealed.

8.Interdependent sale of land and business goods

In section 22B(6) of the Duties Act 2000, in the definition of "business goods", for "(iii) or (iv)" substitute "(iii), (iv) or (v)".

9.Subsales of land

Section 31 of the Duties Act 2000 is repealed.

10.New Part 4A inserted in Chapter 2

After Part 4 of Chapter 2 of the Duties Act 2000 insert—

'Part 4A—Transactions Treated as Sub-sales of Land

Division 1—Introduction

32A.Definitions

In this Part—

"associate" of a person means—

(a)an associated person of that person; or

(b)a person acting in concert with that person;

"consideration" means the amount of a monetary consideration or the value of a non-monetary consideration;

"land development" means any one or more of the following in relation to land—

(a)preparing a plan of subdivision of the land or taking any steps to have the plan registered under the Subdivision Act 1988;

(b)applying for or obtaining a permit under the Planning and Environment Act 1987 in relation to the use or development ofthe land;

s. 10

(c)applying for or obtaining a permit or approval under the Building Act 1993 in relation to the land;

(d)doing anything in relation to the land for which a permit or approval referred to in paragraph(c) would be required;

(e) developing or changing the land in any other way that would lead to the enhancement of its value;

"option" means—

(a)a right, granted by an owner of property to another person, that entitles that other person, or a person to whom the right is assigned, to require the owner to—

(i)enter into a contract of sale of the property to that other person or a subsequent assignee of that other person; or

(ii)transfer the property to that other person or a subsequent assignee of that other person; or

s. 10

(b)a right, granted to an owner of property by another person, that entitles the owner to require that other person, or a person approved by the owner and nominated by that other person, to—

(i)enter into a contract to buy the property from the owner; or

(ii)accept a transfer of the property from the owner.

Division 2—Transfers Involving Additional Consideration

32B. Application of Division

(1)This Division applies to a transfer of dutiable property referred to in section 10(1)(a) or (d) if—

(a)a person ("the vendor") enters into a contract ("the sale contract") to sell or transfer the property to another person ("the first purchaser"); and

(b) a person other than the first purchaser ("a subsequent purchaser") obtains the right to have the property or any part of it transferred,on completion of the sale contract, to the subsequent purchaser ("transfer right"); and

s. 10

(c)the subsequent purchaser or an associate of the subsequent purchaser gives or agrees to give additional considerationin order for the subsequent purchaser to obtain the transfer right; and

(d) the vendor transfers the property or any part of it to a subsequent purchaser.

(2)It is immaterial whether a subsequent purchaser obtains a transfer right—

(a)by way of an assignment, nomination, novation or otherwise; and

(b)from the first purchaser or from another subsequent purchaser.

(3)Each assignment, nomination, novation or other arrangement by which a subsequent purchaser obtains a transfer right is called a "subsequent transaction".

(4)In this section—

"additional consideration" for a transfer right means any considerationgivenor agreed to be given by the subsequent purchaser or an associate of the subsequent purchaser in order for the subsequent purchaserto obtain the transfer right (other than reimbursement of excluded costs)—

(a)if the subsequent purchaser obtained the transfer right from the first purchaser—that exceeds the consideration given or agreed to be given to the vendor by the first purchaser under the sale contract in respect of the property the subject of the transfer right;

s. 10

(b) if the subsequent purchaser obtained the transfer right from another subsequent purchaser—that exceeds the consideration given or agreed to be given by that other subsequent purchaser or an associate of that other subsequent purchaser in order for that other subsequent purchaser toobtain a transfer right, to the extent that the consideration relates to the first-mentioned transfer right;

"excluded costs" means—

(a)legal costs or other fees or charges, including reasonable selling agents' fees and any statutory fees or charges;

(b)survey or valuation payments;

(c)GSTother than in circumstances where an input tax credit or reduced input tax credit is available;

(d)any other costs that, in the Commissioner's opinion, were reasonably incurred—

(i)if the subsequent purchaser obtained the transfer right from the first purchaser—by the first purchaser as part of the sale contract;

(ii)if the subsequent purchaser obtained the transfer right from another subsequent purchaser—by that other subsequent purchaser or an associate of that other subsequent purchaser in order for that other subsequent purchaser to obtain a transfer right.

32C.How duty is charged on transfer

s. 10

(1)Duty on a transfer to which this Division applies is not charged in respect of the transfer from the vendor to the transferee, but is charged separately and distinctly on—

(a)the dutiable value of the sale contract as if it had been completed by the first purchaser; and

(b)the dutiable value of each subsequent transaction.

(2)Duty is charged at the rate set out in Part 3 on the dutiable values referred to in sub-section (1).

32D. Dutiable value of transactions

(1)For the purposes of this Division, the dutiable value of the sale contract referred to in section32C(1)(a) is the greater of—

(a)the consideration given or agreed to be given under the sale contract; and

(b)the amount for which the property might reasonably have been sold if it had been sold, free from encumbrances, in the open market on the date on which the sale contract was entered into.

(2)For the purposes of this Division, the dutiable value of a subsequent transaction referred to in section 32C(1)(b) is the greater of—

s. 10

(a)the consideration given or agreed to be given by the subsequent purchaser or an associate of the subsequent purchaser in order for the subsequent purchaser to obtain the transfer right under the transaction, other than—

(i)legal costs or other fees or charges, including reasonable selling agents' fees and any statutory fees or charges;

(ii)survey or valuation payments;

(iii)GST other than in circumstances where an input tax credit or reduced input tax credit is available;

(iv) any other costs that, in the Commissioner's opinion, were reasonably incurred—

(A) if the subsequent purchaser obtained the transfer right from the first purchaser—by the first purchaser as part of the sale contract;

(B) if the subsequent purchaser obtained the transfer right from another subsequent purchaser—by that other subsequent purchaser or an associate of that other subsequent purchaser in order for that other subsequent purchaser to obtain a transfer right; and

(b)the amount for which the property might reasonably have been sold if it had been sold, free from encumbrances, in the open market on the date on which the subsequent transaction was entered into.

32E. When does the liability to duty arise?

s. 10

A liability for duty charged by this Division arises when the transfer occurs.

32F. Who is liable to pay the duty?

(1)Duty charged by this Division is payable—

(a)in the case of duty referred to in section32C(1)(a)—by the first purchaser;

(b)in the case of duty referred to in section32C(1)(b)—by the subsequent purchaser who obtains a transfer right under the relevant subsequent transaction.

(2)A transferee who pays duty payable under this Division by another person may recover the amount of that duty as a debt due to the transferee from the other person.

32G.Exemptions and concessions

(1)Duty is not chargeable under section32C(1)(a) if the sale contract would be exempt from duty under this Chapter if it were a transfer of dutiable property to the first purchaser.

(2)If the first purchaser would be entitled to a concession under this Chapter if the sale contract were a transfer to the first purchaser, the first purchaser is entitled to that concession in respect of duty charged under section 32C(1)(a).

s. 10

(3) Duty is not chargeable under section32C(1)(b) if the subsequent transaction would be exempt from duty under this Chapter if it were a transfer of dutiable property to the subsequent purchaser who obtains the transfer right under the subsequent transaction.

(4) If a subsequent purchaser would be entitled to a concession under this Chapter if the subsequent transaction were a transfer to the subsequent purchaser, the subsequent purchaser is entitled to that concession in respect of duty charged under section32C(1)(b).

32H. No double duty

Duty is not chargeable on a transfer under this Division if duty is chargeable on the transfer under Division 3 or 4.

Division 3—Transfers Involving Land Development

32I. Application of Division

(1)This Division applies to a transfer of dutiable property referred to in section 10(1)(a) or (d) if—

(a)a person ("the vendor") enters into a contract ("the sale contract") to sell or transfer the property to another person ("the first purchaser"); and

(b) a person other than the first purchaser ("a subsequent purchaser") obtains the right to have the property or any part of it transferred, on completion of the sale contract, to the subsequent purchaser ("transfer right"); and

s. 10

(c)after the sale contract is entered into, but before the propertyor any part of it is transferred, land development occurs in relation to the property or part; and

(d) the vendor transfers the property or any part of it to a subsequent purchaser.

(2)It is immaterial whether a subsequent purchaser obtains a transfer right—

(a)by way of an assignment, nomination, novation or otherwise; and

(b)from the first purchaser or from another subsequent purchaser.

(3)Each assignment, nomination, novation or other arrangement by which a subsequent purchaser obtains a transfer right is called a "subsequent transaction".

32J. How duty is charged on transfer

(1)Duty ona transfer to which this Division applies is not charged in respect of the transfer from the vendor to the transferee, but is charged separately and distinctly on—

(a)the dutiable value of the sale contract as if it had been completed by the first purchaser; and

(b)the dutiable value of each subsequent transaction.

(2)Duty is charged at the rate set out in Part 3 on the dutiable values referred to in sub-section (1).

s. 10

(3)Despite sub-section (1), duty is not charged under this Division on the dutiable value of a sale contract if—

(a) the consideration given or agreed to be given by the first purchaser under the sale contract included consideration for the land development; or

(b) the land development did not occur until after a subsequent transaction occurred.

(4)Sub-section (3)(a) does not apply if the first purchaser or an associate of the first purchaser undertook or participated in the land development at any time before a subsequent transaction occurred.

(5) Despite sub-section (1), duty is not charged under this Division on the dutiable value of a subsequent transaction if—

(a) the consideration given or agreed to be given by the subsequent purchaser or an associate of the subsequent purchaser in order for the subsequent purchaserto obtain a transfer right under the transaction included consideration for the land development; or

(b) the land development did not occur at any time at which the subsequent purchaser held a transfer right.

32K. Dutiable value of transactions