Debits Tax
Debits Tax - Abolished 1 July 2005
Debits Tax was abolished for all debits made on or after 1 July 2005 to accounts with cheque drawing facilities kept with financial institutions. (Refer Circular 246)
Prior to 1 July 2005
What was debits tax charged on?
Debits tax was payable on debits (withdrawals) to cheque accounts or accounts with cheque facilities. This means that debits tax is payable on any debit to either of these types of accounts, regardless of the method used to make the withdrawal. Commonly, this includes:
- Drawing a cheque
- Making an ATM or EFTPOS withdrawal
- Withdrawing cash over the counter
- Transferring money from one account to another (eg, transferring money from a cheque account to pay a loan instalment)
- A credit card debit (where the account has a cheque facility)
Rate of Tax
Debits Tax was charged on withdrawals of $1 or more and the amount charged is shown on the following table:
| Amount of Withdrawal | Tax Payable Per Withdrawal |
|---|---|
| $1 to $99.99 | $0.30 |
| $100.00 to $499.99 | $0.70 |
| $500.00 to $4,999.99 | $1.50 |
| $5,000.00 to $9,999.99 | $3.00 |
| $10,000.00 or more | $4.00 |
What was free from debits tax?
- Accounts without cheque facilities (eg. savings accounts, investment accounts, term deposits)
- Accounts with credit unions and building societies (although they may pass on debits tax charged to them by banks)
- Debits tax and Withholding tax debits
- Bank Cheques and Travelers Cheques
- Accounts that are classed as exempt
Exemptions
Accounts operated by specific organisations may be granted an exemption from debits tax. In general, the types of organisations included are:
- Public Benevolent Institutions eg. Red Cross, St John Ambulance
- Public and non profit hospitals
- Non profit universities, schools or colleges
- Support organisations for an exempt public benevolent institution, religious institution, hospital, university, college or school
- Local, State or Federal Government bodies which are not primarily involved in business activities
- A financial institution which carries on a banking business in South Australia
- Offshore banking units
- State Governors or the Governor General
- Foreign diplomatic and consular personnel Governments of another country
- Organisations exempt under Commonwealth Law
To apply for exemption, you will need to complete an Application for Exemption from Debits Tax form and forward the application to RevenueSA.
Refunds
Refunds relating to debits made on exempt accounts will need to be requested through yout financial institution for verification purposes.
This page was last reviewed 16 October, 2007
