Explanatory Statement

Issued by authority of the Assistant Treasurer

Income Tax Assessment (1936 Act) Amendment (Operation Steadfast Eligible Duty) Regulations 2019

Income Tax Assessment Act 1936

Section 266 of the Income Tax Assessment Act 1936 (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 Income Tax Assessment (1936 Act) Amendment (Operation Steadfast Eligible Duty) Regulations 2019 (the Amending Regulations) is to amend the Income Tax Assessment (1936 Act) Regulation 2015 (the Regulation) to ensure that duty performed by Australian Defence Force (ADF) personnel serving on Operations Steadfast is 'eligible duty' for the purpose of section 23AD of the Act. This allows the remuneration of ADF personnel serving on this operation to be exempted from income tax on an ongoing basis.

Section 23AD of the Act provides that the remuneration of ADF members is exempt from tax if:

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the individual is on 'eligible duty' with a specified organisation in a specified area outside Australia and the Chief of the ADF has issued a certificate to that effect; and

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the eligible duty is not as, or under, an attaché at an Australian embassy or legation.

Subsection 23AD(2) of the Act provides that regulations may declare that duty with a specified organisation in a specified area outside Australia and after a specified day is 'eligible duty'.

Where the Chief of the ADF issues a certificate for the purposes of paragraph 23AD(1)(a) of the Act, paragraph 23AD(3)(b) of the Act states that the certificate continues in force until the individual's departure from the specified area, revocation of the certificate by the Chief of the ADF, or any such time prescribed by the regulations (whichever is earliest).

Defence operations declared 'eligible duty' are listed in section 6 of the Regulation with reference to a specific geographical area and period in which the duty is 'eligible duty'. The Amending Regulations update section 6 by including Operation Steadfast, which is carried on in the land area, territorial waters, airspace and superadjacent airspace of Iraq.

The Amending Regulations applies after 9 September 2018. This date of application reflects the first day when ADF personnel were deployed on Operation Steadfast. The amendments are beneficial to members of the ADF on duty for Operation Steadfast and no person is disadvantaged by the retrospective application of the amendments.

The Act specifies no conditions that need to be met before the power to make the Amending Regulations may be exercised.

Public consultation was not undertaken as the Amending Regulations relates to ADF operations and do not impact directly on the public. The Department of Defence has been consulted in the development of this measure.

The Amending Regulations has a negligible compliance cost impact.

The Amending Regulations is a legislative instrument for the purposes of the Legislation Act 2003.

The Amending Regulations commenced on the day after it was registered.

A statement of Compatibility with Human Rights 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 (1936 Act) Amendment (Operation Steadfast Eligible Duty) Regulations 2019

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 of the Legislative Instrument

The purpose of the Income Tax Assessment (1936 Act) Amendment (Operation Steadfast Eligible Duty) Regulations 2019 is to amend the Income Tax Assessment (1936 Act) Regulation 2015 to ensure that duty performed by ADF personnel serving on Operations Steadfast is 'eligible duty' for the purpose of section 23AD of the Income Tax Assessment Act 1936. This would allow the remuneration of ADF personnel serving on this operation to be exempted from income tax on an ongoing basis.

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.