25 Nov 09 International Tax Agreements Amendment Bill (No 2) 2009 introduced
On 25 November 2009, International Tax Agreements Amendment Bill (No 2) 2009 was introduced into the House of Representatives. The following is extracted from the Explanatory Memorandum.
The Bill amends the ITAA 1997 to align the definition of a dual listed company arrangement with the 2009 Australia-New Zealand Convention. This amendment applies to CGT events happening on or after the Bill receives Royal Assent.
The Bill also amends the International Tax Agreements Act 1953 (the Agreements Act) to give the force of law in Australia to the Convention between Australia and New Zealand for the Avoidance of Double Taxation with Respect to Taxes on Income and Fringe Benefits and the Prevention of Fiscal Evasion (the Convention) that was signed in Paris on 26 June 2009. The Convention will become law from the date of Royal Assent. Further, the Convention will enter into force after the date of the last notification by diplomatic notes and once the domestic processes to give the Convention the force of law in the respective countries have been completed.
The Bill also amends the Agreements Act to give the force of law in Australia to a Second Protocol amending the Agreement between Australia and the Kingdom of Belgium for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income signed at Canberra on 13 October 1977 as amended by the Protocol signed at Canberra on 20 March 1984 (Second Protocol), which was signed in Paris on 24 June 2009. Date of effect: 1 January 2010.
The Bill also amends the Agreements Act to give the force of law in Australia to the Agreement between the Government of Australia and the Government of Jersey for the Allocation of Taxing Rights with Respect to Certain Income of Individuals and to Establish a Mutual Agreement Procedure in Respect of Transfer Pricing Adjustments (the Jersey Agreement), which was signed in London on 10 June 2009. The amendments will take effect from the date of Royal Assent. The Jersey Agreement will enter into force on the date of the last exchange of diplomatic notes notifying that the domestic procedures to give this Agreement the force of law have been completed.
In a media release issued on 25 November 2009, the Assistant Treasurer, Senator Nick Sherry, announced the introduction of the Bill into Parliament, saying that the treaties "will further improve investment and trade flows between Australia and New Zealand and boost the Rudd Government's efforts to combat global tax evasion."
The Minister said that key outcomes from the Australia New Zealand treaty include:
- reduced withholding taxes on certain inter-corporate dividends, and their complete removal on others;
- the removal of withholding tax on interest payments made to unrelated financial institutions or to the Australian and New Zealand governments;
- lower royalty withholding tax;
- the extension of treaty benefits to Australian managed investment trusts;
- the cross recognition of the tax exempt status of pensions in both Australia and New Zealand; and
- a short-term secondment provision which will preclude individuals from being caught up in the other country's tax system when they are seconded to that other country for less than 90 days.
For a copy of the Bill, go here
For a copy of the Explanatory Memorandum, go here
For a copy of the Minister's media release, No 2009/094, 25 November 2009, go here