Inserts for
Tax Laws Amendment Bill 2012: tax treatment of native title benefits

EXPOSURE DRAFT

Commencement information	
Column 1	Column 2	Column 3	
Provision(s)	Commencement	Date/Details	
1.  			
2.  Schedule ??	The day this Act receives the Royal Assent.		
3.  			
Schedule ??—Tax treatment of native title benefits
Part 1—Main amendments
Income Tax Assessment Act 1936
1  Subsection 128U(1) (definition of mining payment)
Omit all the words after “but does not”, substitute:
include:
	(d)	a payment made by a distributing body; or
	(e)	a native title benefit (within the meaning of the Income Tax Assessment Act 1997).
Income Tax Assessment Act 1997
2  Section 11‑55 (after table item headed “National Rental Affordability Scheme”)
Insert:
native title benefits		
native title benefits		59‑50	
3  After section 59‑45
Insert:
59‑50  Native title benefits
	(1)	These are not assessable income and are not *exempt income:
	(a)	a *native title benefit provided to an *Indigenous holding entity;
	(b)	a native title benefit provided to one or more *Indigenous persons, or applied for their benefit.
	(2)	A payment or other benefit:
	(a)	provided to an *Indigenous holding entity; or
	(b)	provided to one or more *Indigenous persons, or applied for their benefit;
is not assessable income and is not *exempt income if the payment or benefit is provided by an Indigenous holding entity out of a *native title benefit it has received.
	(3)	Subsection (2) does not apply to a payment or other benefit to the extent that the payment or benefit:
	(a)	is for the purposes of meeting the administrative costs of the provider of the payment or benefit; or
	(b)	is remuneration or consideration for goods or services provided by another entity.
	(4)	A payment or other benefit that:
	(a)	is provided to an *Indigenous holding entity as described in paragraph (2)(a); and
	(b)	is a payment or benefit to which subsection (2) applies;
is taken to be a native title benefit for the purposes of any further applications of subsection (2).
	(5)	A native title benefit is a payment or *non‑cash benefit provided:
	(a)	under an agreement made under:
	(i)	an Act of the Commonwealth, a State or a Territory; or
	(ii)	an instrument made under such an Act;
		to the extent that the payment or benefit relates to an act affecting native title; or
	(b)	as compensation determined in accordance with Division 5 of Part 2 of the Native Title Act 1993.
In paragraph (a), act, affecting and native title have the same meaning in that paragraph as they have in the Native Title Act 1993.
Note:	Examples of agreements that can be covered by paragraph (a) include:
(a)	indigenous land use agreements (within the meaning of the Native Title Act 1993); and
(b)	recognition and settlement agreements (within the meaning of the Traditional Owner Settlement Act 2010 of Victoria).
	(6)	An Indigenous holding entity means:
	(a)	a *distributing body; or
	(b)	a trust, if the beneficiaries of the trust can only be:
	(i)	*Indigenous persons; or
	(ii)	distributing bodies; or
	(iii)	Indigenous persons and distributing bodies.
4  Subsection 995‑1(1)
Insert:
Indigenous holding entity has the meaning given by subsection 59‑50(6).
5  Subsection 995‑1(1)
Insert:
Indigenous person means a person who is:
	(a)	a member of the Aboriginal race of Australia; or
	(b)	a descendant of an Indigenous inhabitant of the Torres Strait Islands.
6  Subsection 995‑1(1)
Insert:
native title benefit has the meaning given by subsections 59‑50(4) and (5).
7  Application of amendments
The amendments made by this Part apply in relation to native title benefits provided on or after 1 July 2008.

Part 2—Other amendments
Income Tax Assessment Act 1936
8  Division 11C of Part III (heading)
Repeal the heading, substitute:
Division 11C—Payments in respect of mining operations on Indigenous land
9  Subsection 128U(1) (definition of Aboriginal)
Repeal the definition.
10  Subsection 128U(1) (definition of Aboriginal land)
Repeal the definition.
11  Subsection 128U(1) (subparagraphs (d)(i) and (ii) of the definition of distributing body)
Omit “Aboriginals” (wherever occurring), substitute “Indigenous persons”.
12  Subsection 128U(1)
Insert:
Indigenous land means any estate or interest in land that, under a law of the Commonwealth or of a State or Territory that relates to Indigenous persons, is held for the use or benefit of Indigenous persons.
13  Subsection 128U(1)
Insert:
Indigenous person means a person who is:
	(a)	a member of the Aboriginal race of Australia; or
	(b)	a descendant of an Indigenous inhabitant of the Torres Strait Islands.
14  Subsection 128U(1) (definition of mining payment)
Omit “Aboriginal or Aboriginals”, substitute “Indigenous person or persons”.
15  Subsection 128U(1) (paragraph (c) of the definition of mining payment)
Omit “Aboriginals”, substitute “Indigenous persons”.
16  Subsection 128U(1) (subparagraphs (c)(i), (ii) and (iii) of the definition of mining payment)
Omit “Aboriginal land” (wherever occurring), substitute “Indigenous land”.
Income Tax Assessment Act 1997
17  Section 11‑55 (table item headed “mining”)
Omit “Aboriginals”, substitute “Indigenous persons”.
18  Subsection 30‑300(2)
Omit “Aboriginal arts”, substitute “arts of *Indigenous persons”.
19  Paragraphs 59‑15(1)(b) and (2)(b)
Omit “*Aboriginals”, substitute “*Indigenous persons”.
20  Subsection 995‑1(1) (definition of Aboriginal)
Repeal the definition.