Second Reading Speech
by the Treasurer, the Rt. Hon. Harold Holt, M.P., 17th November, 1959.This Bill proposes drafting amendments to the existing legislation giving the force of law to reciprocal taxation agreements entered into by Australia for the purpose of relieving double taxation on incomes flowing between Australia, on the one hand, and the United Kingdom, the United States of America and Canada, on the other.
For the purposes of these agreements it is necessary to ascertain the amount of Australian tax payable on dividends and also to allow rebates of tax to give effect to the agreements. The relevant provisions of the present law have operated satisfactorily, but with the introduction of dividend withholding tax it has become necessary to ensure that the effect of these provisions is not disturbed.
Amendments proposed by this Bill achieve this objective.
A further amendment is also proposed consequent on the reduction of 5 per cent in the income tax and social services contribution payable by individuals for the 1959-1960 financial year. The reduction in tax will be effected by the allowance of a rebate and a lower average rate of tax will accordingly be payable.
This Bill includes a provision that will enable the rebate to be taken to account in determining the average rate of tax payable on dividends. The amendment will maintain the principle upon which the amount of Australian tax on dividends has been ascertained in the past.
I commend the Bill to Honorable Members.
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