Commonwealth Numbered Regulations - Explanatory Statements

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INCOME TAX AMENDMENT REGULATIONS 2000 (NO. 6) 2000 NO. 262

STATUTORY RULES 2000 No. 262

Issued by the authority of the Assistant Treasurer

Income Tax Assessment Act 1936

Income Tax Amendment Regulations 2000 (No. 6)

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

The purpose of the amendments is twofold. The first is to provide a closing date for which certain duty by Australian Defence Force (ADF) personnel is no longer considered eligible duty. During the period of eligible duty the pay and allowances received by ADF personnel, from their service with the International Force East Timor (INTERFET), will be exempt from income tax under section 23AD of the Act.

The other purpose of the amendments is to bring forward the date for which duty by certain ADF personnel is considered eligible duty. This will enable the pay and allowances received by certain ADF personnel, from their service with the United Nations Transitional Administration in East Timor (UNTAET), to be exempt from income tax under section 23AD of the Act.

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 (CDF), 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 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. Regulations 7A (a) and (b) were enacted to give effect to this decision (Statutory Rules 2000 No. 36 of 22 March 2000).

On 1 May 2000 the CDF declared that ADF personnel allotted for service with Operation Warden as part of INTERFET would no longer be eligible for such treatment under subsection 23AD(2). The Regulations will amend Regulation 7A (a) and (b) of the Principal Regulations, by inserting a closing date, to declare that duty with INTERFET serving during the period from 16 September 1999 to 10 April 2000 (inclusive), is eligible duty for the purposes of subsection 23AD(2). There were no remaining ADF personnel serving with the INTERFET contingent after 10 April 2000.

On 20 February 2000, ADF personnel were deployed with Operation Tanager as part of UNTAET. The Government 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 UNTAET. Regulations 7A (c) and (d) were enacted to give effect to this decision and a commencement date of 'after 19 February 2000' was inserted to allow ADF personnel deployed on Operation Tanager to claim the benefits available under section 23AD. (Statutory Rules 2000 No. 117 of 15 June 2000).

On 1 May 2000 the CDF declared that ADF personnel allotted for service with Operation Faber during the period 16 September 1999 to 23 February 2000 as part of UNTAET would be eligible for similar treatment to that of Operation Tanager under subsection 23AD(2). The Regulations will amend Regulation 7A (c) and (d) of the Principal Regulations, by bringing forward the commencement date (currently 'after 19 February 2000% to declare that duty with UNTAET serving after 15 September 1999, is eligible duty for the purposes of subsection 23AD(2).

This amendment to bring forward the commencement date will allow for the earlier period when Operation Faber arrived in East Timor as part of UNTAET to be included as a period of eligible duty for the purposes of subsection 23AD(2). We have not yet been advised of a closing date for Operation Tanager so Regulation 7A (c) and (d) will need to remain open for ADF personnel that are still deployed in East Timor as part of LINTAET.

This amendment to the Income Tax Regulations 1936 will firstly close the date of eligible duty for ADF personnel deployed on INTERFET. Secondly, it will bring forward the date for which eligible duty commences for ADF personnel deployed on UNTAET.

The Regulations while commencing on gazettal will operate retrospectively for the year of income tax ending 30 June 2000. The retrospective regulation amendment will not be to the disadvantage of the taxpayers concerned, and so may take effect before the date of notification as allowed under subsection 48(2) of the Acts Interpretation Act 1901.

Details of the regulations are as follows.

Regulation 1: Names the Regulations.

Regulation 2:       Provides that the Regulations commence on gazettal but that they will operate retrospectively for the income tax year ending 30 June 2000.

Regulation 3:       Provides that the Income Tax Regulations are amended as set out in these Regulations, by amending regulation 7A (a) and (b) to declare the date of eligible duty to be the period from 16 September 1999 to 10 April 2000 (inclusive).

Provides that the Income Tax Regulations are amended as set out in these Regulations, by amending regulation 7A (c) and (d) to bring forward the date of eligible duty to commence after 15 September 1999.