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Wednesday, 6 February 2013
Page: 311

Mr TONY SMITH (Casey) (11:31): On behalf of the opposition I rise to speak on the International Tax Agreements Amendment Bill 2012. This bill was introduced by the Treasurer, Mr Swan, in the last sitting week of last year. As was made clear in the second reading speech and in the explanatory memorandum, it amends the International Tax Agreements Act 1953 to bring into force new taxation agreements with India, the Marshall Islands and Mauritius. I will deal with each aspect briefly.

The India protocol was signed in New Delhi on 16 September 2011 and will amend the agreement between both governments for the avoidance of double taxation and the prevention of fiscal evasion with respect to tax on income. That was signed in 1991. The protocol will also seek to improve the administrative framework for tax co-operation between both countries and will update the rules for the taxation of business profits and services, bringing them into line with international practice. As well, it will insert rules to protect taxpayers from tax discrimination.

With respect to the Marshall Islands and Mauritius agreements, both cover allocation of taxing rights and transfer pricing adjustments. The Marshall Islands agreement was signed in May 2010. There was no pre-existing agreement of this type between Australia and the Marshall Islands. The Mauritius agreement was signed in December 2010. Both agreements include provisions dealing with a range of circumstances. They were outlined in the explanatory memorandum and in the second reading speech.

Very briefly, income from pensions and retirement annuities will generally be taxed only in the country of the recipient's residence, provided the income is subject to tax in that country. Income from government services will generally be taxed only in the country that pays the remuneration. Payments from abroad to visiting students and business apprentices for the purpose of their maintenance, education and training will be exempt from tax in the country visited, and a non-binding administrative mechanism will be established to assist taxpayers to seek resolution of transfer pricing disputes.

These are noncontroversial international agreements that seek to avoid double taxation, codify tax allocation and combat tax avoidance. The coalition supports the bill.