Explanatory Statement
Issued by authority of the Assistant TreasurerIncome Tax Assessment Amendment (Exempt Entities) Regulation 2013
Subject - Income Tax Assessment Act 1997
Subsection 909-1(1) of the Income Tax Assessment Act 1997 (the Act) provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.
The purpose of the Regulation is to amend the Income Tax Assessment Regulations 1997 (the Principal Regulation) to prescribe the International Cricket Council Development International Limited (IDI) as exempt from income tax for a period of five years, from 1 July 2013 to 30 June 2018.
Section 50-70 of the Act sets out a number of conditions that must be met before certain entities (including sporting bodies) can be exempt from income tax. Despite these conditions, paragraph 50-70(c) of the Act applies so that a society, association or club may be exempt from income tax if they do not meet the general exemption conditions where that society, association or club is prescribed in the Principal Regulation.
However, in order for paragraph 50-70(c) of the Act to apply, the society, association or club must be located outside Australia and be exempt from income tax in the country in which it is a resident. The IDI is based in British Virgin Islands for tax purposes, and it is exempt from income tax in that country.
The purpose of providing the IDI with an exemption from income tax is to assist them in their role of organising and promoting the staging of the 2015 Cricket World Cup in Australia.
The Act specifies no further conditions that need to be met before the power to make the Regulation may be exercised.
Targeted consultation on the Regulation was undertaken with the IDI, however, pursuant to section 18 of the Legislative Instruments Act 2003, no further public consultation was undertaken on the Regulation as it is both minor and machinery in nature.
The Regulation is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
The Regulation commences on the day after it is registered on the Federal Register of Legislative Instruments.
A Statement of Compatibility with Human Rights has been completed for the Regulation, in accordance with the Human Rights (Parliamentary Scrutiny) Act 2011. The Statement's assessment is that the measures in the Regulation are compatible with human rights. A copy of the Statement is at Attachment A.
ATTACHMENT A
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Income Tax Assessment Amendment (Exempt Entities) Regulation 2013
This Legislative Instrument 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
The purpose of the Legislative Instrument is to amend the Principal Regulation to prescribe the International Cricket Council Development International Limited (IDI) as exempt from income tax for a period of 5 years, from 1 July 2013 to 30 June 2018.
Human rights implications
This Legislative Instrument does not engage any of the applicable rights or freedoms.
Conclusion
This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.
Assistant Treasurer, the Hon David Bradbury