Clause 63

by repealing section 33A and substituting the following sections:“Commissioner to disregard certain transactions and dispositions33A.—

Subsection (2) applies where the Commissioner is satisfied that the purpose or effect of any arrangement is, directly or indirectly —

to alter the incidence of any duty that is payable or that would otherwise have been payable by any person;

to relieve any person from any liability to pay duty; or

to reduce or avoid any liability imposed or that would otherwise have been imposed on any person by this Act.(2) Without affecting any validity the arrangement may have in any other respect or for any other purpose, the Commissioner must disregard or vary the arrangement and make any adjustment that the Commissioner considers appropriate, including the amount of duty payable, or the imposition of liability to duty, so as to counteract any reduction in or avoidance of duty payable by that person from or under that arrangement.(3) In this section, “arrangement” means any scheme, trust, grant, covenant, agreement, disposition, transaction and includes all steps by which it is carried into effect.(4) This section applies to any arrangement made or entered into before, on or after the date of commencement of section 63 of the Income Tax (Amendment) Act 2020, but not one made or entered into before 1 September 1999.(5) This section does not apply to any arrangement carried out for bona fide commercial reasons and had not as one of its main purposes the avoidance or reduction of duty.Surcharge on adjustments under section 33A33B.—

This section applies to any instrument, or any thing treated as an instrument, that is executed or treated as executed on or after the date of commencement of section 63 of the Income Tax (Amendment) Act 2020.(2) Where the Commissioner makes any adjustment under section 33A, a surcharge equal to 50% of the amount of —

the additional duty payable by a person; or

(where a liability to duty is imposed) the duty payable by a person,as a result of the adjustment is imposed on the person, and is recoverable by the Commissioner from the person as a debt due to the Government.Payment, collection and recovery of duty and surcharge imposed under sections 33A and 33B and remission of surcharge, etc.33C.—

Despite any objection under section 39A to an adjustment under section 33A or an appeal against it under section 40 —

the duty or additional duty resulting from the adjustment; and

the surcharge,(collectively called the amounts due) must be paid —

within one month after the date of the notice of the amounts due from the Commissioner to the person liable for the amounts due; and

in the manner stated in the notice.(2) The Commissioner may, in the Commissioner’s discretion and subject to any term and condition (including the imposition of interest) as the Commissioner may impose, extend the time specified in subsection (1) within which payment is to be made.(3) If any part of the amounts due and any interest imposed under subsection (2) is not paid within the period specified in subsection (1) or extended under subsection (2), the person is liable to pay the following penalties:

where the outstanding amount is paid to the Commissioner within 3 months after the date of expiry of such period — a penalty of $10 or the outstanding amount, whichever is the greater;

where the outstanding amount is not paid to the Commissioner within 3 months after the date of expiry of such period — a penalty of $25 or 4 times the outstanding amount, whichever is the greater.(4) Sections 50 and 70AA apply to the collection and recovery by the Commissioner of the amounts due, interest imposed under subsection (2) and any penalty imposed under subsection (3) as they apply to the collection and recovery of duty and penalty required to be paid under this Act.(5) The Commissioner may, for good cause, remit wholly or in part the surcharge imposed under section 33B(2) or penalty imposed under subsection (3).(6) If, upon an objection under section 39A or an appeal under section 40, an adjustment made under section 33A is increased, reduced or annulled, then the surcharge is correspondingly increased, reduced or annulled (as the case may be), and —

if the amounts due are increased, subsections (1) to (5) apply to the increased amounts as they apply to the amounts due; or

if the amounts due are reduced or annulled and they or any part of them have already been paid to the Commissioner, the amount of the reduction or the entire amount (including any interest paid on the amount) must be refunded.”;

by deleting the heading of Part V and substituting the following Part heading:“ADJUDICATION, OBJECTION AND APPEAL”;

by inserting, immediately after the words “the duty” in section 39A(8), the words “or surcharge on the duty (if applicable)”;

by inserting, immediately after the words “subsection (6)” in section 39A(9), the words “and an adjustment under section 33A”;

by inserting, immediately after the words “payment of duty” in section 40(1)(a), the words “, and surcharge (if applicable),”;

by deleting subsection (3) of section 40 and substituting the following subsection:“(3) Upon hearing the case, the High Court is to determine the question submitted and —

in the case of a decision on a notice of objection to an adjustment under section 33A — if the Court is of the opinion that the purpose or effect of the arrangement in question is that specified in section 33A(1), and section 33A(5) does not apply, the Court is to either confirm or vary the adjustment; and

in any other case — if the Court is of the opinion that the instrument in question is chargeable with duty, the Court is to assess the duty with which it is chargeable.”;

by inserting, immediately after the words “together with any” in section 40(4), the words “interest, surcharge,”; and

by inserting, immediately after subsection (5) of section 40, the following subsection:“(6) In this section —“arrangement” has the meaning given by section 33A(3);“surcharge” means a surcharge imposed under section 33B.”.