Senator SHERRY (11:16 AM) —I move:

(3) Page 21 (after line 10), after Schedule 4, insert:

Schedule 4A—Non-deductibility of bribes to public officials

Income Tax Assessment Act 1997

1 Section 12-5 (before table item headed "buildings")

Insert:

bribes to public officials . . . . . . . . . 26.53

2 After section 26-52

Insert:

26-53 Bribes to public officials

(1) You cannot deduct under this Act a loss or outgoing you incur that is a *bribe to a public official.

(2) An amount is a bribe to a public official to the extent that:

(a) you incur the amount in, or in connection with:

(i) providing a benefit to another person; or

(ii) causing a benefit to be provided to another person; or

(iii) offering to provide, or promising to provide, a benefit to another person; or

(iv) causing an offer of the provision of a benefit, or a promise of the provision of a benefit, to be made to another person; and

(b) the benefit is not legitimately due to the other person (see subsection (3); and

(c) you incur the amount with the intention of influencing a *public official (who may or may not be the other person) in the exercise of the official's duties as a foreign public official in order to:

(i) obtain or retain business; or

(ii) obtain or retain an advantage in the conduct of business that is not legitimately due to you, or another person, as the recipient, or intended recipient, of the advantage in the conduct of business (see subsection (4)).

The benefit may be any advantage and is not limited to property.

Benefit not legitimately due

(3) In working out if a benefit is not legitimately due to another person in a particular situation, disregard the following:

(a) the fact that the benefit may be customary, or perceived to be customary, in the situation;

(b) the value of the benefit;

(c) any official tolerance of the benefit.

Advantage in the conduct of business that is not legitimately due

(4) In working out if an advantage in the conduct of business is not legitimately due in a particular situation, disregard the following:

(a) the fact that the advantage may be customary, or perceived to be customary, in the situation;

(b) the value of the advantage;

(c) any official tolerance of the advantage.

Duties of public official

(5) The duties of a *public official are any authorities, duties, functions or powers that:

(a) are conferred on the official; or

(b) the official holds himself or herself out as having.

3 At the end of section 110-25

Add:

(1) Expenditure does not form part of the cost base to the extent that it is a *bribe to a public official.

4 Subsection 995-1(1)

Insert:

bribe to a public official has the meaning given by section 26-53.

5 Subsection 995-1(1)

Insert:

public official means an employee or official of an *Australian Government Agency or of a local governing body. Local governing body has the same meaning as in section 74A of the Income Tax Assessment Act 1936 .

6 Application

The amendments made by this Schedule apply to losses, outgoings or expenditure incurred in the 1999-2000 income year or a later income year.

This amendment is consistent with the two amendments that the opposition has just moved and which have been passed. There are two very minor corrections to this amendment. They correct what would be described as typographical errors. Where we have `insert "bribes to public officials"', we have 26.53. It should read 26-53. We have at the end of section 110-25:

Add:

(1) Expenditure does not form part of—

it should read `Add: (10) Expenditure does not form part of'. They are typographical errors. I do not want to unduly keep the Senate. The arguments we put forward in respect of the two previous amendments that were carried are the same as those for this amendment.