Commonwealth Numbered Regulations - Explanatory Statements

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TAXATION ADMINISTRATION AMENDMENT REGULATIONS 2000 (NO. 4) 2000 NO. 184

STATUTORY RULES 2000 No. 184

Issued by authority of the Assistant Treasurer

subject - Taxation Administration Act 1953

Taxation Administration Amendment Regulations 2000 (No. 4)

Section 18 of the Taxation Administration Act 1953 (the Act) provides that the GovernorGeneral may make regulations prescribing matters required to give effect to the Act.

Australia is party to a number of international agreements with other countries. These agreements may provide for certain taxation concessions to be granted. To ensure that Australia continues to meet these commitments, tax reform legislation has included a number of measures that allow these concessions.

Section 62C of the Act was one of several measures designed to ensure that following the introduction of the goods and services tax (GST), wine equalisation tax (WET) and luxury car tax (LCT), Australia continues to meet its international obligations in relation to indirect taxes.

The purpose of the regulations is to enable the payment of refunds of GST, WET and LCT, to the extent required under each agreement, on acquisitions in Australia. The concessions will be granted by way of an exemption for goods imported by the eligible body or person and by way of a refund by the Commissioner for eligible acquisitions in Australia.

The regulations will allow for a refund of tax to entities covered by the regulations. The regulations will specify the kind of entities and the kind of acquisitions that are eligible; the conditions and limitations of refund; the manner and period in which an application for refund must be made; and the manner of payment of the refund.

The regulations can only specify entities and acquisitions for which the Commonwealth is under an international obligation to grant indirect tax concessions in relation to the kind of entity and the kind of acquisition. Refunds will be payable by the Commissioner.

The types of international obligations under which indirect tax concessions may be required include:

-       Treaties, which are binding under international law;

-       Memoranda of understanding, arrangements and other documents of less than treaty status, which implement general obligations under a treaty; and

-       Memoranda of understanding etc., which stand alone but which document Australia's international political and moral obligations.

Although the regulations were gazetted after 1 July 2000 they operate retrospectively from 1 July 2000 to ensure entitlement to indirect tax refunds from that date. Accordingly, the retrospectivity creates no detriment to any person in respect of subsection 48(2) of the Acts Interpretation Act 1901.

The Regulations commence on the commencement of items 4 to 9 of Schedule 4 to the A New Tax System (Tax Administration) Act (No. 1) 2000 which commenced on 1 July 2000.

ATTACHMENT

Taxation Administration Amendment Regulations 2000 (No. 4)

Regulation 1 provides the name of the Regulations.

Regulation 2 provides that the Regulations commence on the commencement of Items 4 to 9 of Schedule 4 to the A New Tax System (Tax Administration) Act (No. 1) 2000 ie 1 July 2000.

Regulation 3 provides that the Taxation Administration Regulations 1976 are amended by Schedule 1.

Schedule 1, Item 1 inserts the following regulations

21A:       Regulation 21A contains definitions of borne wine tax, car,

goods, international agreement, taxable supply, tax invoice and

wine.

21B:       Regulation 21B specifies that the entity must be of a kind that is the subject of an international agreement under which the Commonwealth is obliged to grant indirect tax concessions.

21C:       Regulation 21C specifies the kind of acquisitions to which refunds will apply. The acquisitions must be those on which tax has been paid and must be acquisitions permitted under the terms of the relevant international agreement.

21D:       Regulation 21D states the conditions and limitations applicable to refunds. These include the rules under which refunds may be required to be repaid to the Commonwealth. The amount of the refund is limited to the extent of the concession given under the relevant agreement. There is also a requirement that things on which refunds are to be paid must be used in accordance with the terms of the international agreement to which the refund applicant is subject.

21E:       Regulation 21E states the period and manner of payment of refunds. This includes the requirements to lodge quarterly refund applications with the Australian Taxation Office and to submit tax invoices with refund claims. Refunds will be paid to a single recipient or nominated bank account.