― i ―
CONTENTS
| Page | |
| List of Tables | xv |
| Preface | xvii |
| 1. THE NEED FOR TAX REFORM | 1 |
| I. Reasons for a Review | 1 |
| II. Committee's Approach | 3 |
| 2. THE AUSTRALIAN TAX SYSTEM IN PERSPECTIVE | 5 |
| I. Historical Perspective | 5 |
| II. International Perspective | 8 |
| 3. CRITERIA FOR TAX SYSTEMS | 11 |
| I. Terms of Reference and their Interpretation | 11 |
| Fairness | 12 |
| Simplicity | 15 |
| Efficiency | 16 |
| Other Objectives | 17 |
| II. Appraisal of Particular Taxes | 17 |
| Personal Income Tax | 17 |
| Company Income Tax | 18 |
| Capital Gains Taxes | 18 |
| Estate and Gift Duties | 19 |
| Wealth Taxes | 19 |
| Taxes on Goods and Services | 19 |
| Narrow Based Taxes | 19 |
| Broad Based Taxes | 19 |
| Grants | 20 |
| III. Alternative Tax Systems | 20 |
| 4. THE POSITION OF PROGRESSIVITY | 23 |
| I. The Statistical Situation | 24 |
| II. Tax and Non-tax Policies in Redistribution | 29 |
| III. The Distributional Objective | 32 |
| 5. THE GOALS OF TAX REFORM | 35 |
| I. The Options | 35 |
| II. Immediate and Long-term Perspectives | 37 |
| 6. INFLATION AND TAX REFORM | 39 |
| I. Taxes and Inflation Control | 40 |
| II. Effects of Inflation on Taxes | 47 |
| Tax Payments | 48 |
| Tax Drift | 48 |
| Total Tax Receipts | 48 |
| Tax Mix | 48 |
| Income Tax Rates | 49 |
| Concessional Allowances | 53 |
| Estate and Gift Duty | 55 |
| Tax Base | 56 |
| Need for Further Investigation | 58 |
| 7. INCOME TAX: THE BASE | 59 |
| I. Problems of Definition | 59 |
| The Concept of Income | 59 |
|
― ii ― Capital Gains |
60 |
| Bequests and Gifts Received | 60 |
| Lottery and Casual Gambling Winnings | 60 |
| Retirement Benefits and Compensation for loss of office | 60 |
| Compensaton for physical injury to person received in a lump sum or for injury to reputation | 61 |
| Non-money Income | 61 |
| Deduction of Expenses | 62 |
| Expenses Incurred in Deriving Income | 62 |
| Other Deductible Expenses | 62 |
| Exempt Income | 63 |
| Annual Accounting | 63 |
| Income of Particular Industries and Activities | 63 |
| Income Moving Through Intermediaries | 64 |
| International Aspects | 64 |
| II. Specific Issues | 64 |
| Compensation for Physical Injury to the Person | 64 |
| Compensation for Injury to Reputation | 66 |
| Imputed Rent of the Owner-Occupied Home | 66 |
| Costs of Travel to and from Work | 69 |
| Child-Minding Expenses | 70 |
| Expenses of Income Earning Activities Carried on at Home | 72 |
| Subscriptions to Trade and Professional Associations | 74 |
| Income Protection Insurance Premiums | 74 |
| Self Education Expenses | 76 |
| Dissection and Apportionment of Composite Receipts and Outgoings | 76 |
| 8. INCOME TAX: ISSUES RELATING TO BUSINESS AND PROFESSIONAL INCOME | 79 |
| I. Cash or Accruals Basis | 81 |
| II. Accruals Tax Accounting and Financial Accounting | 83 |
| Holding Charges | 84 |
| Work in Progress | 84 |
| Tax on Basis of Financial Accounting Principles | 85 |
| III. Provisions and Accrued Expenses | 86 |
| Long-service Leave and Holiday Pay | 86 |
| Other Provisions for Liabilities | 89 |
| Provision for Doubtful Debts | 90 |
| IV. Depreciation and Amortisation of Fixed Assets | 90 |
| Plant and Equipment | 91 |
| Buildings | 92 |
| Classes of Buildings which should qualify | 95 |
| The inclusion of Existing Buildings | 95 |
| Treatment on Change of Ownership | 96 |
| Demolition and Damage | 96 |
| Effect on Revenue | 97 |
| Leasehold Improvements | 97 |
| Other Assets and Costs of a Capital Nature | 98 |
| V. Trading Stock | 98 |
| Definition of Trading Stock | 99 |
| Land Held for Resale | 100 |
|
― iii ― Plant Spares and Consumable Stores |
100 |
| Shares, Debentures and Similar Assets | 100 |
| Methods of Valuing Trading Stock | 101 |
| Cost Price | 101 |
| Market Selling Value | 103 |
| Replacement Price | 103 |
| Disposal of Trading Stock | 103 |
| VI. Recoupment of Losses | 106 |
| Carry-back of Losses | 106 |
| Carry-forward of Losses | 108 |
| Exempt Income | 109 |
| Effect of Dividend Income | 109 |
| VII. Implications of Inflation for Business Income | 110 |
| VIII. Sundry Costs of Business Operation | 113 |
| Lease Transactions | 113 |
| Expenditure on Repairs to Income-producing Property | 113 |
| Professional Libraries | 114 |
| Travelling and Entertainment Expenses | 115 |
| Anti-pollution and Ecological Expenditures | 115 |
| IX. Conclusion | 116 |
| 9. INCOME TAX: ISSUES RELATED TO EMPLOYMENT AND INVESTMENT INCOME | 117 |
| I. Employment Income | 117 |
| Fringe Benefits | 117 |
| Adequacy of Present Law | 118 |
| Kinds of Benefits | 119 |
| Housing | 119 |
| Board and lodging | 119 |
| Use of motor vehicle | 120 |
| Goods and services supplied at discount | 120 |
| Low interest loans | 121 |
| Prizes and gifts | 121 |
| Stock option and stock purchase schemes | 121 |
| Goods and services supplied by others and paid for directly by the employer | 122 |
| Allowances made available to employees for travel and entertainment expenses | 123 |
| Tax Instalment Deductions | 123 |
| Other Issues | 124 |
| Salary and Wages Adjustments | 124 |
| Travel and Removal Expenses | 124 |
| Travel within employment for a temporary purpose | 125 |
| Travel and removal expenses within an employment for a more permanent purpose | 125 |
| Travel and removal expenses to take up a new employment | 126 |
| Living away from home | 126 |
| Study leave expenses | 126 |
| Payments to obtain Release from Employment Contracts | 127 |
| Standard Deduction | 128 |
| II. Investment Income | 128 |
|
― iv ― 10. PERSONAL INCOME TAX: THE TAXPAYING UNIT |
131 |
| I. Overseas Experience | 131 |
| United Kingdom | 131 |
| United States | 132 |
| South Africa | 133 |
| France | 134 |
| Canada | 134 |
| II. Review of Possible Reform | 134 |
| Questions Arising over the Taxation of Family Units | 135 |
| Individual Taxation with an Election System | 137 |
| Restrictions on Right of Election | 137 |
| De Facto Relationship | 138 |
| Separated or Divorced Spouses | 138 |
| A Proposal for Public Examination | 139 |
| Reservation by the Chairman | 140 |
| 11. INCOME-SPLITTING | 143 |
| Income-splitting and Minor Children | 145 |
| Income from Gifts of Capital | 146 |
| Partnerships, Inter-Vivos Trusts and Arrangements Achieving Similar Income-sharing Results | 148 |
| Excessive Payments for Services or Benefits | 151 |
| Alienation of Income | 152 |
| Family Companies | 152 |
| Section 260 | 153 |
| Distributions of Income under a Legal Obligaton | 154 |
| Distributions of Income under a Moral Obligation | 155 |
| Retrospectivity | 155 |
| Reservation by R. W. Parsons | 157 |
| Reservation by K. Wood | 161 |
| 12. PERSONAL INCOME TAX: DEPENDANT ALLOWANCES AND OTHER CONCESSIONAL DEDUCTIONS | 163 |
| I. Concessional Deductions: Dependants | 163 |
| Dependent Spouse | 163 |
| Other Adults | 165 |
| Dependent Children | 165 |
| Student | 166 |
| II. Other Concessional Deductions: Issues of Principle | 166 |
| III. Concessional Deductions for Education and Medical Expenses | 169 |
| Education Expenses | 170 |
| Medical Expenses | 170 |
| Payments to Medical and Hospital Benefits Funds and Medical Expenses Generally | 172 |
| Expenses of Blind Persons or Persons Confined to Bed or Invalid Chair | 174 |
| Funeral Expenses | 174 |
| IV. Zone Allowances | 174 |
| Zone Boundaries | 175 |
| Deduction or Rebate | 175 |
| The Amount of the Concession | 176 |
| Qualifying Period | 176 |
|
― v ― 13. PERSONAL INCOME TAX: SOCIAL SECURITY |
177 |
| I. Social Security Payments and the Tax System | 177 |
| II. Social Security Contributions | 180 |
| 14. PERSONAL INCOME TAX: RATE STRUCTURE | 183 |
| I. Complexity of Rate Scale | 183 |
| II. Surcharge on Property Income | 185 |
| III. Shape of Rate Scale | 188 |
| Low Range | 188 |
| High Range | 190 |
| Intermediate Range | 192 |
| IV. Frequency of Adjustment | 193 |
| Purpose of Adjustment | 194 |
| Statutory or Discretionary | 194 |
| Adjustment Procedure | 196 |
| V. Income Averaging | 197 |
| The Existing Law | 197 |
| Primary producer averaging | 197 |
| Drought bond scheme | 198 |
| Anti-bunching measures | 198 |
| Alternatives to the Existing Law | 199 |
| Averaging | 199 |
| Cumulative averaging | 200 |
| Block averaging | 200 |
| Marginal adjustment scheme | 200 |
| United States System | 201 |
| Income Equalisation Scheme | 204 |
| Anti-bunching Measures | 205 |
| Appendix A: Tax payable under Alternative Systems: 1974–75 Rates | 206 |
| 15. INCOME TAXATION IN RELATION TO TRUSTS AND PARTNERSHIPS | 207 |
| I. Trusts | 207 |
| Present Entitlement | 208 |
| Present Entitlement of a Beneficiary under a Disability | 210 |
| Net Income of the Trust Estate and Trust Income | 211 |
| Accumulating Income | 213 |
| Losses of Previous Years | 215 |
| II. Partnerships | 216 |
| Net Income of a Partnership and Partnership Profits | 216 |
| Treatment of Losses | 217 |
| Payment by Surviving Partners to Retired Partner or to Estate of Deceased Partner | 218 |
| III. International Aspects | 218 |
| Trusts | 218 |
| Partnerships | 220 |
| 16. COMPANY INCOME TAX | 223 |
| I. Present System of Company Income Taxation | 225 |
| Criticism of the Present System | 225 |
| II. Unacceptable Alternatives to the Present System | 228 |
| Tax the Allocation of Profits | 228 |
| Tax Actual Distributions and Accruals in Value of Shares | 228 |
|
― vi ― Require Distribution of All Profits and Tax these Distributions |
229 |
| Tax the Company and Exempt Dividends from Personal Income Tax | 229 |
| III. Split-rate and Imputation Systems | 229 |
| The Choice of an Imputation System | 231 |
| IV. Proposed Imputation System | 233 |
| Amount of Imputation | 234 |
| Minimum Distributions by Companies | 234 |
| International Implications of Proposed Imputation System | 235 |
| Investment by Non-residents | 236 |
| Investment by Australian Resident in Foreign Countries | 237 |
| V. Imputation and Forward Shifting | 238 |
| VI. Proposal to Allow Election to be Taxed as a Partnership | 239 |
| Eligibility to Elect | 239 |
| Amount and Nature of Company Profits | 239 |
| Number and Nature of Shareholders | 240 |
| Capital Structure of the Company | 240 |
| Manner and Timing of Election and Manner of Termination of Election | 240 |
| Consequences of Election and Termination of Election | 241 |
| VII. Appropriateness of Special Provisions for Small Enterprises | 241 |
| VIII. Aspects of Present Company Taxation | 242 |
| Minimum Distribution Requirements | 242 |
| Income of Private Investment Companies | 245 |
| Assessment of Company Groups | 246 |
| The Treatment of Company Groups in Other Countries | 246 |
| United States | 246 |
| New Zealand | 247 |
| Canada | 247 |
| United Kingdom | 247 |
| The Choice of Method of Relief | 247 |
| Holding and Subsidiary Companies | 248 |
| Trading and Consortium Companies | 248 |
| Restrictions on Carry-forward of Company Losses | 249 |
| Loan Capital and Share Capital | 250 |
| Convertible Notes | 251 |
| High Gearing | 251 |
| 17. INTERNATIONAL ASPECTS OF INCOME TAXATION | 253 |
| I. The Taxation of Foreign-source Income of Australian Residents | 254 |
| Concept of Resident of Australia | 254 |
| Foreign-source Income not Subject to Australian Tax | 256 |
| Credit for Foreign Tax on Foreign-source Income subject to Australian Tax | 256 |
| Exemption and Credit as Methods of Giving Relief Against Double Taxation | 257 |
| Equity | 257 |
| Efficiency | 258 |
| Simplicity | 259 |
|
― vii ― Committee's Proposals |
260 |
| II. Australian-origin Income of Non-residents | 262 |
| Justification for Taxing Income of Non-residents on the Basis of Origin in Australia | 263 |
| Taxation on the Basis of Source in Australia | 264 |
| Tax on Australian-origin Income by Withholding | 265 |
| Tests of Foreign Origin of Income | 266 |
| Reconstruction of Australian-source Income of Non-residents | 266 |
| Reconstruction of Income of Australian Residents from Transactions with Non-residents | 268 |
| Taxation of Branch Operations in Australia | 269 |
| III. Double Taxation Agreements | 270 |
| Appendix A: Rules for Determining Source of Income of Non-residents | 273 |
| Income from Sale of Goods Imported into Australia | 273 |
| Income from Purchase and Sale of Goods that are at all times in Australia | 273 |
| Income from Purchase of Goods in Australia and their Sale Abroad | 273 |
| Income from Manufacturing Operations in Australia | 274 |
| Income from Sale of Australian Real Property | 274 |
| Income from Sale of Shares | 274 |
| Income from Services Performed as an Employee | 275 |
| Income from Services Performed Otherwise than as an Employee | 275 |
| Income in the Form of Rentals in respect of Real Property | 276 |
| Income in the Form of Rents of Chattels | 276 |
| Income in the Form of Payments for the use of Commercial or Industrial Property | 277 |
| Income Arising from Payments for Commercial or Industrial Property | 277 |
| Income Arising from Payments for Scientific, Technical, Industrial or Commercial Knowledge or Information | 277 |
| Income in the Form of Dividends | 278 |
| Income in the Form of Interest | 278 |
| 18. INCOME TAXATION IN RELATION TO PARTICULAR INDUSTRIES: PRIMARY PRODUCTION | 281 |
| The Definition Provisions | 282 |
| Valuation of Livestock | 282 |
| Spreading and Averaging Provisions | 284 |
| Capital Expenditure and Depreciation | 285 |
| Losses of Previous Years | 286 |
| Restriction of Benefit of Primary Production Provisions | 286 |
| 19. INCOME TAXATION IN RELATION TO PARTICULAR INDUSTRIES: MINING | 289 |
| I. General Mining | 289 |
| Conduct of Mining Operations | 290 |
| Determination of Net Income from Mining | 292 |
| Provisions of the Act | 293 |
| Exploration and Prospecting Expenditure | 293 |
|
― viii ― Development of a Mine and Mining Infrastructure |
294 |
| Processing and Treatment of Minerals | 296 |
| Overseas Exploration and Prospecting | 297 |
| Anti-pollution and Ecological Expenditure | 297 |
| Depletion Allowance | 299 |
| Purchase of Mining or Prospecting Right or Information | 300 |
| Proceeds of Sale of Mining Right or Information | 302 |
| Section 23(o) | 302 |
| II. Recent Amendments to the Act | 303 |
| Exploration Expenditure by General Mining Companies | 304 |
| Allowable Capital Expenditure: Costs of Company Formation and Capital Raising | 305 |
| Immediate Write-off Provisions | 305 |
| Housing and Welfare Expenditure | 307 |
| Transportation Expenditure: Division 10AAA | 308 |
| III. Petroleum Mining | 308 |
| Overseas Exploration and Prospecting | 309 |
| Exploration and Prospecting Expenditure | 309 |
| Development Expenditure | 311 |
| Depreciation Allowances | 312 |
| Acquisition of Prospecting Information or Mining Right | 312 |
| IV. Quarrying | 312 |
| Nature of Quarrying Industry | 313 |
| Expenditure Incurred in Quarrying | 313 |
| Quarrying Plant Depreciation | 314 |
| Exploration Expenditure | 314 |
| Development Expenditure | 315 |
| Anti-pollution and Ecological Expenditure | 316 |
| Acquisition Costs and Proceeds of Sale of Quarry | 316 |
| Appendix A: Mining Taxation: A Comparative Survey | 319 |
| I. Exploration Costs | 319 |
| Australia | 319 |
| General Mining | 319 |
| Petroleum | 320 |
| Transfer to Purchaser of Benefit of Deduction | 320 |
| United Kingdom | 321 |
| Canada | 322 |
| ‘Principal Business Corporations’ | 322 |
| Taxpayers other than ‘Principal Business Corporations’ | 322 |
| United States | 323 |
| South Africa | 323 |
| New Zealand | 324 |
| Mining Companies | 324 |
| Loss Carry-forward | 324 |
| Appropriations | 324 |
| Mining Operators | 325 |
| Non-resident Mining Operators | 325 |
| II. Capital Expenditure on Plant and Development | 325 |
| Australia | 325 |
| General Mining | 325 |
| Railways, Roads, Pipelines | 326 |
|
― ix ― Petroleum |
327 |
| Sale of Prospecting or Mining Rights or Information | 328 |
| Disposal of Mining and Petroleum Mining Assets | 328 |
| United Kingdom | 328 |
| Canada | 330 |
| Depletion Allowances | 330 |
| Additional Allowances | 331 |
| Capital Cost Allowances | 331 |
| United States | 332 |
| Depletion Allowances | 332 |
| Percentage Depletion | 332 |
| Development Expenditure | 333 |
| South Africa | 333 |
| Computation of Deduction | 333 |
| Closing Down of Mine | 334 |
| Change of Ownership | 334 |
| New Zealand | 334 |
| III. Investment Incentives | 335 |
| Australia | 335 |
| Deductibility of Capital Subscription | 335 |
| Exempt Income | 336 |
| Losses Incurred in Gaining Exempt Income | 336 |
| United States | 337 |
| Canada | 337 |
| New Zealand | 337 |
| South Africa | 338 |
| 20. INCOME TAXATION IN RELATION TO PARTICULAR INDUSTRIES: GENERAL INSURANCE, EXEMPT ORGANISATIONS AND MUTUAL ASSOCIATIONS | 339 |
| I. General Insurance | 339 |
| Determination of Earned Premiums | 339 |
| Claims Incurred but not Reported | 340 |
| Catastrophe Fund | 341 |
| Reinsurance with Non-residents | 341 |
| II. Exempt Organisations and Mutual Associations | 342 |
| Local Governing Bodies, Public Authorities and Institutions of a Charitable Kind | 342 |
| Non-profit Associations and Societies Formed for Particular Purposes | 342 |
| Co-operative Companies | 344 |
| Friendly Society Dispensaries | 346 |
| 21. INCOME TAXATION IN RELATION TO SUPERANNUATION AND LIFE INSURANCE | 349 |
| I. The Case for Special Treatment | 349 |
| II. Superannuation, Retiring Allowances and Related Matters | 350 |
| Background and Present Legislation | 350 |
| Taxation of Lump Sum Payments on Retirement | 351 |
| Deductibility of Retiring Allowances Paid by Employers | 353 |
| Deductibility of Contributions to Superannuation Funds | 354 |
| Taxation of Income of Superannuation Funds | 355 |
|
― x ― Taxation of Benefits Received from Superannuation Funds |
358 |
| International Comparisons: A Brief Summary | 360 |
| Proposals | 361 |
| The First View | 361 |
| The ultimate position | 362 |
| Transitional provisions: lump-sum retirement benefits | 365 |
| The income of superannuation funds | 367 |
| Contributions to approved superannuation funds | 369 |
| Provision for self-employed persons | 369 |
| Transitional provisions for superannuation funds | 370 |
| The 30/20 requirements | 370 |
| The Second View | 370 |
| The amount of tax-assisted saving | 372 |
| Contributions to the fund | 372 |
| Approved funds | 372 |
| The taxing of receipts from an approved fund | 372 |
| The phasing out of funds approved under the old law | 373 |
| Comparison of the Two Views | 373 |
| III. Life Insurance | 375 |
| Background and Present Legislation | 375 |
| Deductibility of Premiums | 375 |
| Taxation of Life Insurance Companies | 376 |
| The 30/20 Requirements | 377 |
| Taxation of Policy Proceeds | 377 |
| International Comparisons: A Brief Summary | 378 |
| Conclusion | 379 |
| 22. INCOME TAX ADMINISTRATION | 381 |
| I. Legislature, Appeals and Prosecutions | 381 |
| The Commissioner's Discretion | 381 |
| Amendment of an Assessment | 383 |
| Objections to an Assessment | 384 |
| Powers and Procedures of a Board of Review | 385 |
| Appellate Powers and Procedures | 388 |
| Costs of Objections, Reviews and Appeals | 390 |
| Interest Upon Pre-paid Tax Liabilities | 391 |
| Taxation Prosecution Procedures and Penalties | 392 |
| Hardship Relief | 394 |
| Public Interest in Taxation Legislation | 396 |
| Independent Standing Committee | 396 |
| II. Procedures and Compliance | 397 |
| Adjustment Sheets | 397 |
| Supply of Information | 397 |
| Return Forms | 397 |
| Information Bulletins | 397 |
| Advance Rulings | 398 |
| Non-taxable ‘Assessments’ | 398 |
| Taxpayer Compliance | 399 |
| Registered Tax Agents | 400 |
| III. Payment of Tax | 401 |
| Tax Instalment Deduction System | 401 |
| Excess Instalment Deductions | 401 |
|
― xi ― Limited Effectiveness |
402 |
| Other Aspects | 404 |
| Provisional Tax System | 405 |
| Company Tax System | 409 |
| Withholding Tax | 411 |
| 23. CAPITAL GAINS TAX | 413 |
| I. The General Issue | 414 |
| II. The Method of Taxing | 416 |
| III. Specific Issues | 419 |
| Transitional Provisions | 419 |
| Bunching and Spreading | 420 |
| Determination of Amount of Gain | 421 |
| Treatment of Companies | 422 |
| Treatment of Trusts | 423 |
| Treatment of Gifts | 424 |
| Treatment of Unrealised Gains at Death | 425 |
| Exemption on Retirement, Death or Disablement | 425 |
| Treatment of Taxpayer's Principal Residence | 426 |
| Exemption of Small Gains | 427 |
| Exemption of Certain Assets | 427 |
| Life Assurance Policies | 428 |
| Superannuation Rights | 428 |
| Depreciable Assets | 428 |
| Intangible Assets | 428 |
| Roll-over for Certain Assets | 428 |
| Treatment of Losses | 429 |
| IV. The Distinction Between Capital and Income | 430 |
| Section 26(a) | 430 |
| Section 26AAA | 431 |
| Replacement of Sections 26(a) and 26 AAA upon their Repeal | 431 |
| V. Development Gains Tax | 432 |
| VI. Conclusion | 433 |
| Reservation by R. W. Parsons | 435 |
| Reservation by K. Wood | 438 |
| 24. ESTATE AND GIFT DUTY | 439 |
| I. The Form of a Death Tax | 441 |
| II. Proposed Reforms | 442 |
| The Tax Base | 442 |
| Integration of Gift Duty with Estate Duty | 443 |
| Deductions in Determining the Estate Duty Base | 444 |
| Rate Structure | 444 |
| Concessions for Dependants | 445 |
| Other Concessions | 447 |
| Adjustments for Inflation | 447 |
| Advance Provision for Payment of Tax | 448 |
| Quick-succession Relief | 448 |
| Fall in Value of Assets after Death | 450 |
| Valuation of Assets | 451 |
| Jurisdiction of Integrated Estate and Gift Duty | 451 |
| Incidence of Integrated Estate and Gift Duty | 452 |
|
― xii ― Assessment Procedures |
453 |
| A National Estate and Gift Duty | 453 |
| Appendix A: The Base of an Integrated Estate and Gift Duty | 455 |
| I. Powers Over Property | 445 |
| II. Options | 457 |
| III. Settled Property | 459 |
| Life Estates | 460 |
| Estates for a Term of Years or for the Life of Another Person | 462 |
| Discretionary Trusts | 462 |
| Accumulating Income | 463 |
| Special Cases | 464 |
| IV. Annuities | 465 |
| V. Gift of Services | 466 |
| VI. Use of Property | 467 |
| VII. Debts | 468 |
| VIII. Partnerships | 468 |
| IX. Companies | 469 |
| Transfer of Assets to a Company | 469 |
| Power or Control in Relation to Companies | 469 |
| Benefits from a Company | 470 |
| Gifts in Transactions Involving Companies | 470 |
| Gift to a company | 471 |
| Gift by a company | 471 |
| Allotment of shares | 472 |
| Variation in share rights | 472 |
| Change in share rights without concurrent company action | 472 |
| An obligation to sell shares to specified persons at a price specially determined | 473 |
| Declaration of dividends | 473 |
| Definition of a ‘Family’ or ‘Closely Controlled’ Company | 474 |
| X. Involuntary Gifts | 474 |
| XI. Insurance and Superannuation | 475 |
| XII. Joint Ownership | 475 |
| XIII. Exempt Transactions | 475 |
| XIV. Interrelation of Income Tax and Gift Tax | 476 |
| Appendix B: Rate Structure | 479 |
| I. Present Duties and Grossing-up | 479 |
| II. Illustration of a Scale of Integrated Duty | 479 |
| III. Adjusting the Rate Scale | 480 |
| IV. Quick-succession Relief | 481 |
| Appendix C: Situs of Assets | 483 |
| Reservation by R. W. Parsons | 485 |
| Reservation by K. Wood | 487 |
| 25. CHARITIES | 489 |
| I. Deductibility from Income of Gifts to Charities | 489 |
| II. Income of Charities | 490 |
| III. Charities in Relation to Gift and Estate Duties | 491 |
| IV. Issues of Principle | 492 |
| Subsidy by Deduction | 492 |
| Subsidy by Exemption of Income | 493 |
| V. Uniformity of Tax Treatment | 495 |
|
― xiii ― Appendix A: Extract from Income Tax Assessment Act |
497 |
| Appendix B: Extract from Estate Duty Assessment Act | 501 |
| Appendix C: Tax Treatment of Charities | 503 |
| 26. WEALTH TAX | 505 |
| I. Overseas Experience | 505 |
| II. Appraisal | 506 |
| III. Conclusion | 510 |
| 27. TAXATION OF GOODS AND SERVICES | 511 |
| I. Existing Taxes on Goods and Services | 511 |
| II. Broad-based Taxes | 515 |
| Turnover Tax | 516 |
| Wholesale Sales Tax | 517 |
| Retail Sales Tax | 517 |
| Value-added Tax | 518 |
| III. Level of VAT and Transitional Problems | 520 |
| Appendix A: Sales Tax as a Continuing Tax | 523 |
| I. Tax Base and Rates of Tax | 523 |
| II. Structure and Administration of the Law | 523 |
| Simplification of the Law | 523 |
| Time for Lodgment of Returns | 524 |
| Objections and Appeals | 524 |
| Freight Charges | 526 |
| Avoidance of Tax | 526 |
| 28. CONCLUSION | 529 |
| Advertisement of Terms of Reference and Invitation to Submit | 533 |
| List of Authors of Submissions | 535 |
| List of Commissioned Studies | 547 |
| Treasury Taxation Papers | 549 |
| Members of the Professional Staff who assisted the Committee for varying periods | 551 |
| Professional Firms, Universities and Organisations who made Professional Staff Available to the Committee | 551 |
| Members of the General Services Staff | 551 |
| Important Statutory Alterations to the Taxation Legislation since the Taxation Review Committee commenced its work | 553 |
| Index | 559 |