House of Representatives

Explanatory Memorandum

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

Chapter 2 - Amendments to the International Tax Agreements Act 1953

Part 1: Amendments in relation to the Swiss Convention

2.1 Part 1 of Schedule 1 of this Bill amends the International Tax Agreements Act 1953 (Agreements Act 1953) to give the force of law in Australia to the Convention between Australia and the Swiss Confederation for the Avoidance of Double Taxation with Respect to Taxes on Income, and Protocol (Swiss Convention), which was signed in Sydney on 30 July 2013.

2.2 Part 1 of Schedule 1 prescribes the Swiss Convention as an agreement that is to have the force of law according to its terms. [Schedule 1, item 4, Agreements Act 1953 subsection 5(1)]

2.3 Part 1 also provides that the Agreement between Australia and Switzerland for the Avoidance of Double Taxation with respect to Taxes on Income, and Protocol (Swiss 1980 Agreement ), which entered into force on 13 February 1981, continue to have the force of law for transitional purposes (see paragraph 1.335). [Schedule 1, items 6 and 7, Agreements Act 1953 section 11E]

Consequential amendments

2.4 New definitions are created to refer to the Swiss Convention and the Swiss 1980 Agreement. [Schedule 1, items 2 and 3, Agreements Act 1953 subsections 3AAA(1) and 3AAB(1)]

2.5 The current definition for the Swiss 1980 Agreement, the 'Swiss agreement', is repealed. [Schedule 1, item 1, Agreements Act 1953 subsection 3AAA(1)]

2.6 A minor amendment is also made to include a note to section 5A. Section 5A provides that a number of past agreements continue to have the force of law. The note informs the reader that some earlier agreements may continue to have force of law because of other provisions of the Act, i.e. the Swiss 1980 agreement under section 11E. [Schedule 1, item 5, Agreements Act 1953 subsection 3AAA(1)]

Part 2: Minor Amendments to the Agreements Act 1953

2.7 Part 2 of Schedule 1 makes a number of minor amendments to the Agreements Act 1953.

2.8 An amendment is made to clarify that any reference, in an international agreement, to the concept of 'immovable property' having its Australian domestic law meaning, includes a reference to real property. [Schedule 1, item 8, Agreements Act 1953 subsection 3(5)]

2.9 This amendment will apply to the reference to immovable property in Article 6 of the Swiss Convention (see paragraph 1.87). It is also intended that the amendment will apply to any future agreements that use the same concept.

2.10 None of Australia's current international agreements use the term 'immovable property' exclusively.

2.11 Part 2 of Schedule 1 also makes a number of minor amendments to add notes containing the Australian Treaty Series citations for a number of recently enacted agreements. [Schedule 1, items 9 to 12, Agreements Act 1953 subsection 3AAA(1)]