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International Tax Agreements Amendment Bill (No. 1) 2006

Schedule 1 Mutual assistance in collection of tax debts

   

Income Tax Assessment Act 1997

1  Subsection 995-1(1)

Insert:

foreign revenue claim has the meaning given by section 263-10 in Schedule 1 to the Taxation Administration Act 1953 .

Taxation Administration Act 1953

2  Subsection 8AAB(5) (after table item 17J)

Insert:

17K

263-30 in Schedule 1

Taxation Administration Act 1953

3  Section 8AAZA (definition of credit )

Repeal the definition, substitute:

credit includes:

                     (a)  an amount that the Commissioner must pay to a taxpayer under a taxation law (other than the Product Grants and Benefits Administration Act 2000 ), whether or not described as a credit; and

                     (b)  an amount received by the Commissioner in respect of a taxpayer as a result of the Commissioner having made a claim that is similar in nature to a foreign revenue claim (as defined in section 263-10 in Schedule 1).

4  Subsection 250-10(2) in Schedule 1 (after table item 135)

Insert:

137

amount to be recovered from a debtor under a registered foreign revenue claim

263-30 in Schedule 1

Taxation Administration Act 1953

5  At the end of section 255-40 in Schedule 1

Add:

             (3)  For the purposes of giving effect to a provision of an international agreement of a kind referred to in Subdivision 263-A (about foreign revenue claims), if a document needs to be served on a person and the Commissioner, after making reasonable inquiries, is satisfied that:

                     (a)  the person is absent from Australia and does not have an agent in Australia on whom the document can be served; and

                     (b)  the person has an address in a foreign country, a constituent part of a foreign country or a foreign territory;

the Commissioner may serve the document on the person at the address mentioned in paragraph (b).

6  Paragraph 255-45(1)(a) in Schedule 1

After “subsection (2)”, insert “or (3)”.

7  At the end of section 255-45 in Schedule 1

Add:

             (3)  A certificate may state:

                     (a)  that a * foreign revenue claim for an amount specified in the certificate has been made by the competent authority under the relevant international agreement; or

                     (b)  that the relevant requirements of the relevant international agreement have been complied with in relation to the foreign revenue claim; or

                     (c)  that the claim was registered under Division 263 on the date specified in the certificate; or

                     (d)  that, as at the date of the certificate, the Commissioner has or has not received advice from the competent authority under the relevant international agreement about the reduction or discharge of an amount to be recovered under the claim; or

                     (e)  that the particulars of any reduction or discharge of an amount to be recovered under the claim are as specified in the certificate.

8  After Division 260 in Schedule 1

Insert:

Division 263 Mutual assistance in collection of foreign tax debts

Table of Subdivisions

263-A   Foreign revenue claims

Subdivision 263-A Foreign revenue claims

Guide to Subdivision 263-A

263-5   What this Subdivision is about

This Subdivision can be activated if there is in force an agreement between Australia and a foreign country or territory that contains an article relating to assistance in collection of foreign tax debts.

The Commissioner can collect from an entity an amount in respect of a tax debt that the person owes to such a country or territory or take action to conserve assets of the entity.

The Commissioner is required to remit amounts collected to the foreign country or territory concerned.

Table of sections

Operative provisions

263-10      Meaning of foreign revenue claim

263-15      Requirements for foreign revenue claims

263-20      Foreign Revenue Claims Register

263-25      Registering claims

263-30      When amount is due and payable

263-35      Amending the Register

263-40      Payment to competent authority

Operative provisions

263-10   Meaning of foreign revenue claim

                   A foreign revenue claim is a claim made to the Commissioner:

                     (a)  in accordance with an agreement (the international agreement ) between Australia and:

                              (i)  a foreign country or a constituent part of a foreign country; or

                             (ii)  an overseas territory;

                            (the overseas entity ); and

                     (b)  for one or both of these purposes:

                              (i)  the recovery by the Commissioner of an amount from an entity (the debtor ) in respect of taxes imposed otherwise than by an * Australian law (including any associated amounts);

                             (ii)  the conserving of assets for the purposes of a recovery of that kind.

263-15   Requirements for foreign revenue claims

                   A * foreign revenue claim must:

                     (a)  be made by or on behalf of an entity that is, under the relevant international agreement, the competent authority; and

                     (b)  be consistent with the provisions of that agreement; and

                     (c)  be made in the * approved form; and

                     (d)  specify the amount owed by the debtor in Australian currency (calculated as at the day the claim is made); and

                     (e)  be accompanied by a declaration by the competent authority stating that the claim fulfils the requirements of that agreement.

263-20   Foreign Revenue Claims Register

             (1)  The Commissioner must keep a register called the Foreign Revenue Claims Register (the Register ).

             (2)  The regulations may make provision in relation to the form in which the Register may be kept.

             (3)  The register is not a legislative instrument.

263-25   Registering claims

                   If the Commissioner is satisfied that a * foreign revenue claim has been made in accordance with section 263-15, the Commissioner must register the claim by entering particulars of it in the Register within 90 days after receiving the claim.

263-30   When amount is due and payable

             (1)  When particulars of a * foreign revenue claim are entered in the Register, the amount owed by the debtor becomes a pecuniary liability to the Commonwealth by the debtor.

Note 1:       The amount to be recovered from the debtor will be a primary tax debt for the purposes of Part IIB and the Commissioner may allocate the debt to a running balance account under that Part.

Note 2:       For provisions about collection and recovery of the debt, see Part 4-15.

             (2)  That amount becomes due and payable 30 days after notice of the particulars of the * foreign revenue claim is given to the debtor or on a later day specified in the notice.

             (3)  If that amount remains unpaid after it is due and payable, the debtor is liable to pay * general interest charge on the unpaid amount for each day in the period that:

                     (a)  started at the beginning of the day by which the amount was due to be paid; and

                     (b)  finishes at the end of the last day at the end of which either of the following remains unpaid:

                              (i)  the amount;

                             (ii)  general interest charge on any of the amount.

263-35   Amending the Register

             (1)  The Commissioner may, with the agreement of the relevant competent authority, amend the Register to correct an error.

             (2)  The Commissioner may, with the agreement of the relevant competent authority:

                     (a)  remove from the Register the particulars of a * foreign revenue claim; or

                     (b)  reduce an amount to be recovered from a debtor under the claim.

             (3)  A debtor may, after receiving a copy of the particulars of a * foreign revenue claim entered in the Register, apply to the Commissioner in the * approved form to have those particulars removed from the Register.

             (4)  The Commissioner may, after considering the application, remove those particulars from the Register.

             (5)  If the Commissioner removes particulars of a * foreign revenue claim relating to the recovery of an amount from the Register under paragraph (2)(a) or subsection (4), the debtor is taken never to have been liable to pay an amount (including any * general interest charge) as a result of the foreign revenue claim.

             (6)  If the Commissioner reduces the amount to be recovered from a debtor under a * foreign revenue claim under paragraph (2)(b), the amount of the reduction is taken never to have been payable by the debtor.

263-40   Payment to competent authority

             (1)  The Commissioner must, if the Commissioner recovers all or part of an amount to be recovered from a debtor under a registered * foreign revenue claim, pay that amount to the competent authority concerned or to another entity on behalf of that competent authority.

             (2)  The Commissioner may also pay to the competent authority all or part of an amount that the Commissioner has received and that is attributable to * general interest charge in relation to the claim.

Taxation (Interest on Overpayments and Early Payments) Act 1983

9  Subsection 3(1) (after paragraph (c) of the definition of decision to which this Act applies )

Insert:

                  (caa)  a decision under Subdivision 263-A (about foreign revenue claims) in Schedule 1 to the Taxation Administration Act 1953 ; or

10  Section 3C (after table item 90 of the definition of relevant tax )

Insert:

92

An amount payable to the Commissioner under Subdivision 263-A (about foreign revenue claims) in Schedule 1 to the Taxation Administration Act 1953

11  Application

The amendments made by this Schedule apply to claims for assistance in collection of foreign tax debts made after the day on which this Act receives the Royal Assent.