On Friday 5 March 2010, the Assistant Treasurer, Senator Nick Sherry, gave a speech to the Taxation Institute of Australia's 25th National Convention, held at the Melbourne Convention and Exhibition Centre, Melbourne, Victoria.
The Assistant Treasurer's speech covered the following topics:
- Australia's economic performance
- Australia's tax system - Henry and Johnson reviews
- Tax Practitioners Board, and
- Changes to the taxation of foreign employment income (s 23AG ITAA 1936), including FBT liability.
In relation to the changes to s 23AG, the Assistant Treasurer said:. "This is an important equity measure and we stand firmly by it."
The Assistant Treasurer said that "Australians working overseas will not be required to lodge a foreign tax return to demonstrate and claim amounts of foreign tax paid, as has been claimed. All they will be required to do is to keep their normal pay slips and under our self-assessment regime these pay slips will only need to be provided if the ATO undertakes an audit."
In relation to FBT on foreign employment income, the Assistant Treasurer referred to the fact that in Australia, FBT is levied on the employer while in foreign jurisdictions the FBT is regularly imposed on the employee, so a situation arises where a double FBT payment becomes a possibility. The Assistant Treasurer said:
"...at my instruction, the Treasury has provided the Tax Office with a series of scenarios and how the FBT arrangements apply in practice, and they are working together on a solution. This work is proceeding with the highest of priority and is almost complete.
On my current advice, I understand that it is likely that an administrative solution can be found that will prevent the payment of Australian FBT on the basis that the relevant costs would be 'otherwise deductible' in Australia."