House of Representatives

Explanatory Memorandum

(Circulated by the authority of the Treasurer, the Hon J. B. Hockey MP)

Chapter 4 - Tax law rewrite: definition of Australia

Outline of chapter

4.1 Schedule 4 to this Bill rewrites provisions from the Income Tax Assessment Act 1936 (ITAA 1936) into the Income Tax Assessment Act 1997 (ITAA 1997) and the Taxation Administration Act 1953 (TAA 1953). This is another step towards achieving a single income assessment tax act for Australia.

4.2 The rewritten provisions define 'Australia' for income tax purposes. The income tax concept applies across other taxes, with amendments as required in order to retain intended policy differences.

4.3 The rewritten provisions generally make no policy changes. However, they include the drafting changes needed to conform to the legislative approach used in the ITAA 1997, to simplify how the law is expressed, and to remove any ambiguity about the operation of the law.

Context of amendments

Outline

4.4 This context explains the historical background to the ITAA 1997 and the steps that have been taken as part of the rewrite of the ITAA 1936. It also summarises the changes the Schedule makes to the provisions it rewrites.

Creating the 1997 Act

4.5 In November 1993, the Joint Committee of Public Accounts recommended that the income tax law be rewritten. ^[3] The Keating government accepted the recommendation and created the Tax Law Improvement Project (TLIP) to implement it.

4.6 In April 1995, the TLIP team published a discussion paper proposing to rewrite the law progressively. It proposed that approach for several reasons, including:

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rewriting the law in tranches would be less disruptive for the Parliament and other users of the law;

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the benefits of the rewrite would be available sooner; and

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waiting to deliver the whole rewrite at once would almost certainly involve having to rewrite some things twice, as the law changed in the interim.

4.7 The team's proposal was adopted. This led to the ITAA 1997 (introduced into Parliament in 1996 and enacted in 1997) and two further Acts: the Tax Law Improvement Act 1997; and the Tax Law Improvement Act (No. 1) 1998. Each Act included rewrites of tranches of the income tax law.

Further stages of rewriting the income tax law

4.8 In August 1998, the Howard Government announced, in its Tax Reform: Not a New Tax, A New Tax System paper, that the TLIP team would be subsumed into the taskforce being assembled to implement the substantive reforms that paper proposed. ^[4]

4.9 Since that time, little formal work has been done on a pure rewrite of the remaining provisions of the ITAA 1936. However, rewriting has continued as part of substantive reforms. The reform of the imputation system in 2002, for example, included a rewrite of the imputation provisions from the ITAA 1936 into the ITAA 1997.

4.10 The ITAA 1936 has not been repealed. However, in 2006, the Tax Laws Amendment (Repeal of Inoperative Provisions) Act 2006 repealed all the provisions of the ITAA 1936 that had so far been rewritten, as well as other provisions of the Act that had become inoperative.

4.11 A further rewrite of certain Parts of and Schedules to the ITAA 1936 was undertaken in Tax Laws Amendment (Transfer of Provisions) Act 2010.

What does this Bill do?

4.12 TLIP had no mandate to make significant policy changes, but it did have a wide brief to improve the legislation it was rewriting. TLIP introduced many of the drafting features we now take for granted in the income tax and goods and services tax (GST) laws (such as a top-down structure, aids to navigation, asterisking of defined terms, and non-operative guide material). It also used plain English drafting for its rewrites.

4.13 Consistent with this approach, the rewrite in this Schedule involves no significant policy changes but does conform to the drafting approach used in the ITAA 1997 and in Schedule 1 to the TAA 1953.

What sorts of changes have been made to the material?

4.14 In general, the rewrite aims to reproduce the ITAA 1936 material, in language that has been changed as little as possible, and in the same order as the original material. However, some alterations have been made in order to ensure the revised material is clear and consistent with provisions elsewhere in the ITAA 1997.

Structural changes

4.15 In some cases, material has been consolidated or reordered to better conform to the structure of the current law. These cases are itemised later in the Chapter.

Inoperative and transitional material

4.16 Material that is clearly inoperative has been removed, and some material of a transitional nature has been moved from the principal rules into the Income Tax (Transitional Provisions) Act 1997. These cases too are itemised later in this Chapter.

Numbering

4.17 In some cases, the numbering of provisions has changed to reflect the location in the ITAA 1997 or the TAA 1953 into which the provisions have been rewritten. Structural changes and removal of inoperative provisions have also affected the numbering in some areas. The specific changes made by this rewrite are explained later in the Chapter.

General wording changes

4.18 In a few instances, wording has been changed where it produced a clearly simpler result without changing the meaning.

Guide material

4.19 Guide material has been added where none exists in the current law and, where it does exist, has often been substantially rewritten. The added material includes both formal guides to Divisions and Subdivisions, and notes that point readers to related provisions or other relevant information.

Definitional changes

4.20 The most significant changes made as part of this rewrite were made to ensure that the rewritten material conformed to the rules for defined terms used in the ITAA 1997. The most important of these rules is the 'one-term, one-meaning' protocol that requires a defined term to have the same meaning across the ITAA 1997. By contrast, it is quite common in the ITAA 1936 for definitions to apply only to a Division, or even to a section, and for the same term to be defined in many different ways throughout that Act.

4.21 In some cases, the current law defines a term inconsistently with its definition or use in the ITAA 1997, and in others a term may be defined in the ITAA 1997 but take its ordinary meaning in the current law. The changes made in the rewrites to accommodate the definitional rules have aimed to preserve the meaning of the current law.

Will the rewrite affect interpretation of the law?

4.22 Whenever the wording of legislation changes, its meaning could change too. An important consideration in undertaking the rewrites in this Schedule is to minimise any changes in meaning. It is not intended that by merely changing the structure, wording or location of provisions their meaning has been altered.

Statutory influences on interpretation

4.23 Section 1-3 of the ITAA 1997 provides that an idea expressed in one form of words in the ITAA 1936 is not taken to be different when the same idea appears to be expressed in the ITAA 1997 but in a different form of words. Section 15AC of the Acts Interpretation Act 1901 says the same thing.

4.24 Because 'this Act' is defined in the ITAA 1997 to include Schedule 1 to the TAA 1953, section 1-3 produces the same result for material rewritten into that Schedule.

4.25 In general, there is no intention that this rewrite should change the ideas expressed in the original material, so section 1-3 should prevent any changes in meaning being inferred because different words have been used. In those few cases where a different meaning is intended, the detailed explanations say so expressly.

Effect on ATO rulings

4.26 The Australian Taxation Office (ATO) publishes rulings about the interpretation of taxation laws. ^[5] Those rulings are more than just the Commissioner of Taxation's (Commissioner) opinion about what the law means; they are statements to which the Commissioner is legally bound, even if they prove to be wrong (see Division 357 in Schedule 1 to the TAA 1953).

4.27 There might be doubt about the ongoing effect of a ruling about a provision that has been rewritten. To the extent that a rewritten provision expresses the same idea as the original provision, section 357-85 of Schedule 1 to the TAA 1953 provides that the ruling applies equally to the rewritten provision. That means that taxpayers can rely on an existing ruling, and receive the same legal protection as if the ruling were about the rewritten provision.

How is this explanatory memorandum arranged?

4.28 After this context, the explanatory memorandum contains a discussion of the specific changes made by the rewrite.

4.29 Each discussion explains, in broad terms, what the rewritten material does. It also discusses particular issues relevant to the rewritten material, including:

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the material that was not rewritten because it was inoperative;

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the changes made to conform to definitional requirements; and

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the reasons for the location and structure of the rewritten material.

4.30 This Chapter does not discuss the detailed policy reasons for the original provisions. However, it does list the Act that introduced the original provisions and each of the Acts that amended them. That list will help those interested in the policy reasons for the provisions to find the original explanatory memorandums and parliamentary debates that explain them.

4.31 This Chapter does discuss the reasons for any substantive changes to the original provisions. It also explains the consequential amendments to other provisions that are needed as a result of enacting the rewrite.

Finding tables

4.32 Finding tables follow the specific discussion. Those tables cross-reference the original provisions with their equivalents in the rewrites. The tables help taxpayers map the rewrite onto the existing provisions and vice versa.

Background to the rewritten provisions

Australia - what does it mean?

Summary

4.33 This Schedule introduces amendments as a means to simplify the meaning of Australia for the purposes of the income tax law.

4.34 This background briefly details why the meaning of Australia is fundamental to the operation of the income tax law and then explains what the existing meaning is and how it is arrived at.

4.35 The existing meaning is overly complicated and is derived from the application of over 13 Commonwealth Acts. The background explains the existing meaning by demonstrating how the ordinary meaning of Australia is affected by each of those Acts.

4.36 There are three deviations from the ordinary meaning of Australia. The first is to do with Australia's external Territories; the second deals with waters surrounding the main continental landmass and Australia's external Territories; and the third deviation is regarding what are referred to as offshore installations and areas surrounding such installations. Offshore installations include things such as oil platforms located somewhere in Australia's waters. As these installations also fall within the waters surrounding the continental landmass, the addition of such installations in the definition is redundant.

4.37 To summarise, Australia for the purposes of the income tax law includes the States and internal Territories, all of Australia's external Territories, Australia's territorial waters (including the territorial waters surrounding the external Territories) and much of the waters contained in Australia's exclusive economic zone. Australia also includes the airspace above and the sea-bed and subsoil beneath Australia's waters.

Object

4.38 While the main continental landmass (including the State of Tasmania) is always considered part of Australia, the difficulty is in defining what Australia includes beyond that landmass.

4.39 Which of Australia's external Territories are considered part of Australia for the purposes of the tax law?

4.40 How much of the oceans and seas surrounding the continental landmass are considered part of Australia (including the land beneath and airspace above these areas)?

4.41 How much of the waters surrounding Australia's external Territories are considered part of Australia?

4.42 And what of the oil rigs and other installations that are on those waters? Or the seabed beneath (including the minerals that may be contained within the seabed)?

4.43 Currently, what is meant by Australia (when used in a geographic sense) for taxation law purposes can only be ascertained after considering the provisions of the taxation law itself and the application of a number of other Commonwealth laws.

4.44 The intent of this Schedule is to simplify how the taxation laws define Australia without changing existing policy.

Why does the definition of Australia matter?

4.45 The primary importance of defining Australia for income tax purposes is for determining who should be taxed and on what income. Australia is used in two key concepts in the income tax law, namely Australian resident and Australian source.

4.46 Australian residents are taxable on their income from all sources. Foreign residents are taxable on only their Australian sourced income.

4.47 Australia is also important for the purposes of the capital gains tax rules as foreign residents are only subject to Australian income tax on capital gains that are connected with Australian real property or with mining rights covering areas situated in Australia.

What is currently meant when we refer to Australia in the income tax law?

4.48 The income tax law predominantly relies upon a definition of Australia that is ascertained from both the common law and Commonwealth statutes. The ITAA 1936, amongst other Acts, expands on that definition (for example, see sections 6AA and 7A). This background begins with the ordinary meaning of Australia and explains how the various Commonwealth Acts affect that meaning and how it is applied in the income tax law.

Ordinary meaning

4.49 The Macquarie Dictionary definition of Australia is limited to the main continental landmass (including Tasmania).

Effect of the Acts Interpretation Act 1901

4.50 The Acts Interpretation Act 1901 makes two additions to the meaning of Australia. One must presume that the additions are to the ordinary meaning of Australia because there is no other base definition in the Commonwealth statute book. In any event, the dictionary definition seems consistent with the additions provided by the Acts Interpretation Act 1901.

Territorial seas

4.51 The first addition (see section 15B) includes as part of Australia, Australia's territorial seas, a definition of which can be found in the Seas and Submerged Lands Act 1973. However, the Acts Interpretation Act 1901 makes no reference to that Act. Nonetheless, reference to that Act can be reasonably assumed. It is under the Seas and Submerged Lands Act 1973 that the Commonwealth has assumed sovereignty over the territorial sea. This Act has enacted into domestic law the international law governing, amongst other similar matters, territorial seas.

4.52 Section 15B also has the effect of including airspace above and sea-bed and subsoil beneath the territorial sea as part of Australia.

4.53 In addition, section 15B also includes within the definition of Australia any seas on the landward side of Australia's territorial waters (but not those waters that are within the limits of states or internal territories). By way of example, seas on the landward side of the territorial sea would include bays and rivers that flow into the territorial sea.

External Territories

4.54 The second addition (see section 17) is to include the external Territories of Christmas Island and the Cocos (Keeling) Islands as part of Australia. The territorial seas adjacent to those territories would also form part of Australia because of section 15B.

4.55 The Acts Interpretation Act 1901 specifies that no other external Territory is to be considered part of Australia. However, as with most definitions in the Acts Interpretation Act 1901, this definition is subject to a contrary interpretation being expressed by a particular statute.

Governing Acts of the external Territories

4.56 The Acts Interpretation Act 1901, in including Christmas Island and the Cocos (Keeling) Islands within the meaning of Australia, is consistent with the Acts governing those territories. The territories' governing Acts apply all Commonwealth laws to those territories except where an Act expressly provides that it does not apply to the territory.

4.57 In addition to the Territory of Christmas Island and the Territory of Cocos (Keeling) Islands, the Territory of Ashmore and Cartier Islands also forms part of Australia. That Territory's governing Act also provides that all Commonwealth laws apply to the Territory unless an Act expressly provides otherwise. To properly and practically apply many Commonwealth Acts to this territory it would be necessary to adjust parts of the terminology of certain Acts (for example, you would need to read references to Australia to include the external Territory). Attempting to apply Commonwealth laws without making such adjustments to terminology may be contrary to the intention of the Act. For example, because there is no express statement otherwise in the income tax laws, these laws would apply to Ashmore and Cartier Islands under the territory's governing Act. However, applying the Act to the territory when the territory would not be part of Australia under the income tax law cannot be practically undertaken.

4.58 However, the Acts Interpretation Act 1901 does expressly provide that Australia does not include external territories other than the Territory of Christmas Island and the Territory of Cocos (Keeling) Islands. That said, this is subject to a contrary intention. By adopting a strict interpretation consistent with the Acts Interpretation Act 1901, the provision applying Commonwealth laws to the territory (in the territory's governing Act) would often be made meaningless and would therefore produce an absurd outcome. The better interpretation would be that the Territory's governing Act applies the income tax law and other comparable Commonwealth Acts to the territory as if the territory were part of Australia. It is noted that such an interpretation is not beyond doubt and does potentially conflate the separate concepts of 'extension to the territory' and 'application to the territory'.

Income tax law

4.59 Turning now to the provisions of ITAA 1936, section 7A of that Act provides that it extends to, and that Australia includes, the Territories of Christmas Island and the Cocos (Keeling) Islands. Given the definition of Australia in the Acts Interpretation Act 1901, this part of section 7A is now redundant; however, it does give important guidance to the reader. Section 7A also includes the Territory of Norfolk Island as part of Australia.

4.60 Section 7A, in respect of Norfolk Island, displaces the provision in the territory's governing Act that provides that unless expressly provided otherwise, Commonwealth laws do not apply in the territory.

4.61 The remaining Australian external Territories (except the Australian Antarctic Territory) are brought within the Australia tax system under section 6AA - however, not in the same manner as in section 7A.

4.62 Section 6AA brings within Australia's tax system (by applying the Act and expanding the definition of Australia) the Coral Sea Islands Territory, the Territory of Heard Island and McDonald Islands and the Territory of Ashmore and Cartier Islands (noting that the last case is possibly redundant - see above). However, it purports to do so only in a limited manner.

4.63 Section 6AA also brings within the income tax system sea installations and most of the offshore areas within Australia's contiguous zone, exclusive economic zone ^[6] and continental shelf. All sea installations brought expressly within the income tax system are also brought in with the inclusion of offshore areas as all affected sea installations fall within those offshore areas.

4.64 Section 6AA limits the inclusion of the above mentioned extensions to activities related (directly or indirectly) to specific purposes. These purposes are exploration and prospecting for minerals, the carrying out of mining operations, or the carrying on of an 'environmental related activity' as well as activities that relate to 'acts, matters, circumstances and things touching, concerning, arising out of or connected with the primary activities'. Effectively, a loose nexus needs to be established between the activity undertaken and the exploration or mining of minerals or the undertaking of an environmental activity undertaken in one of those areas.

4.65 Prima facie, the expansion does seem relatively narrow. However, the definition of 'environmental related activity' is significantly wider than the ordinary meaning of the term would suggest.

4.66 Environmental related activity is defined as any activity relating to:

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tourism or recreation;

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the carrying on of a business;

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exploring, exploiting or using the living resources of the sea, of the sea bed or of the subsoil of the seabed, whether by way of fishing, pearling oyster farming, fish farming or otherwise;

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marine archaeology; or

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a prescribed purpose,

and includes a scientific activity and a transport activity.

4.67 Both scientific activity and transport activity are further defined.

4.68 It should also be noted that the territories in question are uninhabited (except for a small manned meteorological station on one of the Coral Sea Islands).

4.69 There does not appear to be any activities likely to be undertaken in the Territories in question and relevant for purposes of the income tax law that are not included within the definition of 'environmental related activities' or mineral exploration or exploitation or loosely related to such activities. Effectively, for the purposes of the income tax law, the external Territories and offshore areas appear to be fully included as part of Australia.

Opportunity for reform and significant simplification

4.70 To do away with the complex and ad hoc nature of the existing definition, the amendments codify and consolidate in one place a definition of Australia for income tax purposes.

4.71 This approach also does away with the current complexities associated with section 6AA. Given the findings outlined above, it is difficult to ascertain what activities would not result in the external Territories and offshore areas (including installations in those areas) being considered part of Australia for income tax purposes. From a practical perspective, particularly given the current limited activities undertaken in those areas, those areas are included in Australia for all known tax law purposes. This Schedule therefore amends the income tax law so that those Territories and areas are included as part of Australia for all purposes under the income tax laws. It results in a reduction in the complexity of the law without affecting the current income tax base.

4.72 This approach also does away with the specific inclusion of installations in offshore areas within the definition of Australia for income tax purposes. As outlined earlier, the specific inclusion of installations was redundant due to the inclusion within the definition of Australia of all offshore areas in which such installations were located.

4.73 The new consolidated definition includes a number of notes and signposts to ensure that the reader has all information readily available to understand what the meaning of Australia is.

4.74 Geoscience Australia publishes maps of Australia and its maritime zones and external territories. ^[7] These maps provide a useful pictorial illustration of the textual descriptions contained in law.

Summary of new law

4.75 Schedule 4 to this Bill rewrites sections 6AA and 7A of the ITAA 1936 into the ITAA 1997.

4.76 These amendments also ensure that the new definition of Australia is then cross referenced across taxation laws with appropriate, and clearly articulated, adjustments being made to the definition in order to preserve intended policy differences.

4.77 In some cases, labels and terms have been changed in order to ensure the application of the various taxation laws is clearly articulated and can be understood and applied more easily.

Detailed explanation of new law

4.78 Schedule 4 to this Bill rewrites sections 6AA and 7A of the ITAA 1936 into the ITAA 1997.

How the rewrite is different

Guide material

4.79 The rewrite contains newly written guide material in respect of what areas are included in Australia for income tax (that is, the effect of sections 6AA and 7A of the ITAA 1936). The guide material summarises the definition of Australia for income tax purposes and the definition is constructed. [Schedule 4, item 6, section 960-500 of the ITAA 1997]

Structural changes

4.80 The contents of sections 6AA and 7A of the ITAA 1936 are combined together and are more clearly linked with the concepts for which they are important.

4.81 Many of the complexities, duplications, carve outs and limitations incorporated into the existing provisions are removed given they do not result in an identifiable policy outcome.

4.82 Common or duplicated concepts and cross references contained within the following Acts are repealed and instead linked with the rewritten provisions:

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ITAA 1997;

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ITAA 1936;

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TAA 1953;

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A New Tax System (Goods and Services Tax) Act 1999;

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A New Tax System (Australian Business Number) Act 1999;

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A New Tax System (Luxury Car Tax) Act 1999;

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A New Tax System (Wine Equalisation Tax) Act 1999;

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Fringe Benefits Tax Assessment Act 1986;

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Petroleum Resource Rent Tax Assessment Act 1987; and

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Superannuation Guarantee (Administration) Act 1992.

Differences in rewrite

4.83 The rewrite is a simplified expression of section 7A of the ITAA 1936 but contains no substantive policy changes. [Schedule 4, item 6, section 960-505 of the ITAA 1997]

4.84 The rewrite is also a simplified expression of section 6AA of the ITAA 1936 but removes many of the complexities, duplications, carve outs and limitations contained in the section that achieve no identifiable policy outcome and serve solely to increase red tape for taxpayers and other users of the law. [Schedule 4, item 6, section 960-505 of the ITAA 1997]

4.85 The current terminology and associated labelling around the geographic operation of the GST, luxury car tax and wine equalisation tax has been adjusted to reflect both the new definition of Australia and the differing operation of the indirect taxes when compared against the direct taxes. [Schedule 4, Part 3, items 38 to 64]

4.86 Unlike income tax, the GST does not operate in Australia's external territories and in certain offshore areas. As opposed to referring to the GST as operating in 'Australia' when the GST does not apply to certain parts of the Australia, a new label, the indirect tax zone, is applied to make clear the difference in application of the indirect taxes. The scope of the indirect tax zone is no different to the current scope of 'Australia' for indirect tax purposes. That is, there is no policy change in regard to the application of the GST. This change in terminology allows the policy outcome to be preserved while still having a consistent definition of Australia across the taxation laws. [Schedule 4, item 26, section 195-1 of the A New Tax System (Goods and Services Tax) Act 1999]

4.87 An Australian business number (ABN) is used for numerous tax and other purposes throughout Australia. When the ABN was first introduced, it was closely connected with the operation of the GST and incorporated many of the GST's geographic limitations. However, as the use of the ABN has expanded, these limitations have been overridden by new provisions, allowing access to the ABN for entities which are not necessarily subject to GST. This has created unnecessary complexity. Further, the remnants of the original link to GST have artificially limited the natural evolution of the ABN as the single business identifier for the Australian governments. The rewrite instead aligns the geographic scope of the A New Tax System (Australian Business Number) Act 1999 with the income tax definition of Australia so as to allow the ABN to better achieve is stated purposes. [Schedule 4, items 32 to 37, sections 8 and 41 of the A New Tax System (Australian Business Number) Act 1999]

4.88 In the course of the rewrite, a possible inconsistency between the operation of the income tax law and Australia's international obligations under the United National Convention on the Law of the Sea has been identified, with the income tax law purporting to tax certain activities in Australia's exclusive economic zone and continental shelf that the treaty may not allow. To ensure the income tax law can brought into compliance with Australia's treaty obligations, a new regulation making power will be incorporated into the rewrite to allow income from certain prescribed activities undertaken by foreign residents in the exclusive economic zone and continental shelf to be exempted from income tax in cases where the treaty limits Australia's taxing rights over those activities. A regulation making power will allow activities to be fully assessed on a case-by-case basis to determine whether the activity falls inside or outside Australia's obligations under the Convention. [Schedule 4, item 5, section 768-110 of the ITAA 1997]

4.89 The Superannuation Guarantee (Administration) Act 1992 currently uses the ordinary meaning of Australia, an adjusted definition of Australia (that is, a definition of Australia as expressly extended under that Act), and the income tax definition of Australia, as adopted through cross references to concepts used in the income tax law (for example, Australian resident). This has created significant ambiguity and complexity as it is difficult to work out what definition is to be used in what context. Schedule 4 amends the Superannuation Guarantee (Administration) Act 1992 to use only the income definition of Australia and to make clear that the superannuation guarantee entitlements or obligations do not apply to:

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foreign resident employees for work done outside Australia (as defined for income tax purposes);

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Norfolk Island resident employees for work done in Norfolk Island or outside Australia (as defined for income tax purposes);

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foreign resident employers for work done outside Australia (as defined for income tax purposes); and

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Norfolk Island resident employers for work done in Norfolk Island.

4.90 These amendments do not alter the on-going policy objective or the Commissioner's current administration of the superannuation guarantee system. By adopting the income tax definition in full and expressly carving out the application of the superannuation guarantee in specific situations ensures the law is clear in its operation. [Schedule 4, items 67 to 70]

Consequential amendments

4.91 Cross references to provisions that have been rewritten have been updated to instead refer to the rewritten provisions. Similar definitions and concepts used in other tax laws have also repealed and replaced so that they align with the rewritten definition. [Schedule 4, items 4, 9 to 23 and 65 to 78]

Application and transitional provisions

4.92 The amendments apply to tax years or quarters commencing on or after 1 July 2015 and to all later tax years or quarters. [Schedule 4, item 79]

Legislative history of the provisions

4.93 Section 6AA of the ITAA 1936 was added by Income Tax Assessment Act (No. 4) 1968 (Act No. 87 of 1968).

4.94 Section 7A of the ITAA 1936 was added by Income Tax Assessment Act (No. 4) 1973 (Act No. 164 of 1973) and has not be subsequently amended.

4.95 These Acts have amended section 6AA:

Finding tables

4.96 This Chapter includes finding tables to assist in identifying which provision in this Bill corresponds to a provision in the old law that has been rewritten, and vice versa.

4.97 References to old law in the finding tables are to these provisions in the ITAA 1936.

4.98 References to the new law are to provisions of the ITAA 1997, unless otherwise indicated. Also, in the finding tables:

•

No equivalent means that this is a new provision that has no equivalent in the old law. Typically, these would be Guide material.

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Omitted means that the provision of the old law has not been rewritten in the new law.

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Tax law rewrite: definition of Australia

4.99 This Schedule is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview

4.100 Schedule 4 to this Bill rewrites provisions from the Income Tax Assessment Act 1936 into the Income Tax Assessment Act 1997 (ITAA 1997) and the Taxation Administration Act 1953. This is another step towards achieving a single income tax assessment act for Australia.

4.101 The rewritten provisions define Australia for income tax purposes. The income tax term is then applied to other taxes with amendments as required in order to retain intended policy differences.

4.102 The rewritten provisions generally make no policy changes. However, they include the drafting changes needed to conform to the legislative approach used in the ITAA 1997, to simplify express, and to remove any ambiguity.

Human rights implications

4.103 This Schedule does not engage any of the applicable rights or freedoms.

Conclusion

4.104 This Schedule is compatible with human rights as it does not raise any human rights issues.