Senate

Explanatory Memorandum

(Circulated by authority of the Treasurer, the Hon Peter Costello, MP)

Chapter 2 - Sales Tax (Exemptions and Classifications) Act 1992

Overview

2.1 The amendments will provide exemption from sales tax for certain goods so as to give effect to the Status of Forces Agreement (SOFA) between the Government of Australia and the Government of Malaysia which was entered into on 3 February 1997.

Summary of the amendments

Purpose of the amendments

2.2 The amendments to the Actwill provide an exemption from sales tax for certain goods used by a member of the Malaysian Visiting Force or civilian component, or a dependant of such a member.

Date of effect

2.3 The amendments will commence on the day after the date of the Royal Assent. [Item 2]

Background to the legislation

2.4 The SOFA between the Government of Australia and the Government of Malaysia was entered into on 3 February 1997. The SOFA settles formal arrangements covering bilateral defence activities, particularly personnel exchanges, with Malaysia and establishes standard conditions for the presence of Malaysian Visiting Forces on such issues as sales tax, jurisdiction, immigration and customs duty.

Explanation of the amendments

2.5 The amendments to the Act will provide exemption from sales tax on the following imported goods:

•

personal effects, furniture and household goods (other than cigarettes, cigars, tobacco and spiritous liquors) imported by a member of the Malaysian Visiting Force or civilian component, or a dependant of such a member; and

•

motor vehicles imported for the use of a member of the Visiting Force or civilian component.

[Item 1, new Item 139A(1)]

2.6 The terms "Visiting Force", "civilian component" and "dependant" have the same meaning as provided for in the SOFA between the Government of Australia and the Government of Malaysia. In the SOFA:

(a)

"Visiting Force" means any body, contingent, or detachment of any naval, land or air forces of the Sending State when stationed or present in the Receiving State in connection with defence activities mutually arranged between the Parties;

(b)

"civilian component" means the civilian personnel accompanying a Visiting Force who are employed in the service of a Visiting Force and who are not stateless persons, nor nationals of, nor ordinarily resident in, the Receiving State;

(c)

"dependant" means a person who:

(i)

is neither a national of, nor ordinarily resident in, the Receiving State; and

(ii)

in relation to a member of a Visiting Force or a civilian component is accompanying such a member and is:

(A)

a husband or wife of the member of a Malaysian Visiting Force or civilian component or a spouse of the member of an Australian Visiting Force or civilian component; or

(B)

otherwise in the custody, care or charge of the member; or

(C)

wholly or mainly maintained by the member; or

(D)

part of the family of the member and is residing with that member.

[Item 1, new Item 139A(2)]