Tax Laws Amendment (2010 Measures No. 3) Act 2010 (90 of 2010)

Schedule 3   Exempting certain transactions involving security agencies

Taxation Administration Act 1953

1   At the end of Chapter 5 in Schedule 1

Add:

Part 5-100 - Miscellaneous

Division 850 - Transactions exempt from application of taxation laws

Table of Subdivisions

850-A Declaration relating to security or intelligence agency

Subdivision 850-A - Declaration relating to security or intelligence agency

Table of sections

850-100 Declaration relating to security or intelligence agency

850-100 Declaration relating to security or intelligence agency

Object

(1) The object of this section is to remove the possibility of a conflict arising between Australia's national security interests and Australia's taxation laws.

Making a declaration

(2) The Director-General of Security holding office under the Australian Security Intelligence Organisation Act 1979 may declare that this section applies to one or more specified entities (the Australian Security Intelligence Organisation itself may be specified) in relation to one or more specified transactions.

(3) The Director-General of the Australian Secret Intelligence Service ( ASIS ) may declare that this section applies to one or more specified entities (ASIS itself may be specified) in relation to one or more specified transactions.

(4) A declaration under this section may only be made if the relevant Director-General is satisfied that the making of the declaration is necessary for the proper performance of the functions of:

(a) for the Director-General of Security - the Australian Security Intelligence Organisation; or

(b) for the Director-General of ASIS - ASIS.

(5) A declaration under this section must be in writing, signed by the relevant Director-General.

Note 1: A declaration may specify an entity or transaction by reference to a class of entities or transactions (see subsection 46(3) of the Acts Interpretation Act 1901). For example, a declaration may specify the subsidiaries of a specified company, or the parties to a specified transaction.

Note 2: For variation and revocation, see subsection 33(3) of the Acts Interpretation Act 1901.

(6) A declaration may be made even though:

(a) a transaction it specifies has already been entered into or carried out; or

(b) an entity it specifies has died or ceased to exist;

(whether before or after the commencement of this section).

(7) A written document signed by the relevant Director-General purporting to be a declaration is prima facie evidence that this section has been complied with in making the declaration, but this subsection does not affect the performance of the functions of the Inspector-General of Intelligence and Security.

Effect of declaration

(8) For an entity specified in a declaration in relation to a specified transaction, the transaction is to be disregarded in determining any of the following:

(a) the existence or amount of a liability of the entity relating to taxation under any *Commonwealth law, even if the law requires express words to be used to exempt an entity or transaction from liability to taxation under that law;

Example: Examples of liabilities covered by paragraph (a) are a liability to GST (despite section 177-5 of the A New Tax System (Goods and Services Tax) Act 1999), and amounts required to be paid by Part 2-5 in this Schedule (Pay as you go (PAYG) withholding).

(b) the existence or amount of any kind of benefit (however the benefit is expressed) relating to taxation under any Commonwealth law;

Example: Examples of benefits covered by paragraph (b) are deductions, credits and offsets under the Income Tax Assessment Act 1997, and input tax credits under the A New Tax System (Goods and Services Tax) Act 1999.

(c) the existence or extent of any other obligation (or right) of the entity relating to a liability or benefit of a kind mentioned in paragraph (a) or (b).

Example: Examples of obligations covered by paragraph (c) include the following:

(a) an obligation to withhold money from a payment;

(b) an obligation to lodge a return, or to provide information, to the Commissioner of Taxation;

(c) an obligation to become registered under a taxation law.

(9) A declaration under this section is not a legislative instrument.