Commonwealth Numbered Regulations - Explanatory Statements

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Issued by authority of the Assistant Treasurer

Income Tax Assessment Act 1936

Income Tax Amendment Regulations 2000 (No. 1)

Section 266 of the Income Tax Assessment Act 1936 (the Act) provides that the GovernorGeneral may make regulations prescribing matters required to give effect to the Act.

The purpose of the Regulations is to prescribe eligible duty for the purposes of section 23AD of the Act. This enables the pay and allowances received by Australian Defence Force (ADF) personnel from their duty with the International Force East Timor (INTERFET) in East Timor to be exempt from income tax.

Subsection 23AD(2) of the Act provides that the Regulations may declare that duty with a specified organisation in a specified area outside Australia after a specified day, is eligible duty for the purposes of section 23AD.

Subsection 23AD(1) of the Act exempts the pay and allowances earned by ADF personnel where there is a certificate in force, issued in writing by the Chief of the Defence Force, that the personnel are on eligible duty.

The certificate comes into force at the later of the time specified in the certificate and the time the person arrives for duty in the specified area. The certificate continues to be in force until the earliest of either the time of departure from the specified area, the date of revocation or a time prescribed by regulation.

In September 1999, ADF personnel were deployed to East Timor as part of INTERFET. The Government has agreed to provide an exemption from income tax under section 23AD of the Act for the-pay and allowances earned by ADF personnel deployed on INTERFET. The exemption is to apply after 15 September 1999.

This amendment to the Income Tax Regulations 1936 prescribes eligible duty.

Details of the regulations are as follows.

Regulation 1: Names the Regulations.

Regulation 2: Provides that the Regulations commence on gazettal

Regulation 3: Provides that the Income Tax Regulations are amended as set out in these Regulations, by inserting regulation 7A to prescribe the following duty to be eligible duty:

Duty with INTERFET, in East Timor and the territorial sea of Indonesia adjacent to East Timor, after 15 September 1999.

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