Stephan Teale | May 2012 | Corporate and Commercial
Recent changes to the Duties Act 2000 (Vic) (the Act) have reduced the time period for the payment of duty from 3 months to 30 days.
Who does this impact? All parties who are liable to pay duty on dutiable transactions and relevant acquisitions which occur on or after 1 April 2012.
What action should be taken? Parties liable to pay duty under the Act in relation to dutiable transactions and relevant acquisitions occurring on or after 1 April 2012, must ensure that duty is paid within 30 days after the liability arises. Penalties continue to apply for late payment of duty.
New time limits for the payment of Victorian duty
Background Under various provisions of the Act, transactions concerning dutiable property (refer Chapter 2), certain transactions treated as transfers (refer Chapter 3 which includes, Part 2 – Acquisitions of interests in certain land holders, Part 3 – Entitlements arising from capital reductions or rights alterations, Part 4 – Allotment of shares by direction and Part 5 – Acquisition of land use entitlements by allotment of shares or units) and financial sector transfers of business (refer Chapter 4), are subject to duty which was due and payable within 3 months after liability for the duty arose. Under the Taxation Administration Act 1997 (Vic), interest is payable for underpayment, late payment or failure to pay tax at the market rate, (presently 5% pa) plus the premium rate of 8% pa. The Commissioner has power to remit interest in full or in part, in circumstances deemed appropriate. In addition, penalty tax may be payable where a taxpayer fails to meet various obligations, including underpayment, late payment or failure to pay tax. The penalty can range from 25% to 75% of the tax payable. Reductions in these rates of between 20% & 80% can be made where voluntary disclosures are made. The Commissioner has power to remit penalty tax in full or in part, in circumstances deemed appropriate.
New time limits for the payment of Victorian duty Stephen Teale | May 2012
Transitional Provisions The State Revenue Office is instituting a transitional period from 1 April 2012 to 30 June 2012 which will provide for the non-imposition of: >> penalty tax on late payments of duty during this period; >> premium interest on late payments during this period; and >> market interest on late payments of duty, where the taxpayer can demonstrate circumstances beyond their control that led to the late payment.
Conclusion All taxpayers who are engaged in various transactions giving rise to a liability to duty after 1 April 2012, must be cognisant of the reduction in the period permitted for the lodgement of documents and payment of duty. Transitional provisions will mitigate penalties for late payment, only until 30 June 2012.
For more information, please contact: Stephen Teale Partner T: 03 8600 5008 M: 0419 374 728 firstname.lastname@example.org
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