International Tax Agreements Amendment Act 2003
No. 123, 2003
An Act to amend the International Tax Agreements Act 1953, and for related purposes
Contents
1 Short title
2 Commencement
3 Schedule(s)
Schedule 1—The 2003 United Kingdom convention
International Tax Agreements Act 1953
Schedule 2—The Mexican agreement
International Tax Agreements Act 1953
Schedule 3—Miscellaneous
Income Tax Assessment Act 1936
International Tax Agreements Act 1953
Taxation (Interest on Overpayments and Early Payments) Act 1983
International Tax Agreements Amendment Act 2003
No. 123, 2003
An Act to amend the International Tax Agreements Act 1953, and for related purposes
[Assented to 5 December 2003]
The Parliament of Australia enacts:
1 Short title
This Act may be cited as the International Tax Agreements Amendment Act 2003.
2 Commencement
This Act commences on the day on which it receives the Royal Assent.
3 Schedule(s)
Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.
Schedule 1—The 2003 United Kingdom convention
International Tax Agreements Act 1953
1 Subsection 3(1) (paragraph (b) of the definition of agreement)
Repeal the paragraph, substitute:
(b) the 1946 United Kingdom agreement;
(ba) the 1967 United Kingdom agreement;
(bb) the 1967 United Kingdom agreement as amended by the 1980 Protocol to the 1967 United Kingdom agreement;
2 Subsection 3(1) (definition of the previous United Kingdom agreement)
Repeal the definition.
3 Subsection 3(1) (definition of the United Kingdom)
Repeal the definition.
4 Subsection 3(1) (definition of the United Kingdom agreement)
Repeal the definition.
5 Subsection 3(1) (definition of the United Kingdom protocol)
Repeal the definition.
6 Subsection 3(1) (definition of United Kingdom tax)
Repeal the definition.
7 Subsection 3(1)
Insert:
the 1946 United Kingdom agreement means the Agreement between the Government of Australia and the Government of the United Kingdom for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income that was signed at London on 29 October 1946.
8 Subsection 3(1)
Insert:
the 1967 United Kingdom agreement means the Agreement between the Government of the Commonwealth of Australia and the Government of the United Kingdom of Great Britain and Northern Ireland for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital gains that was signed at Canberra on 7 December 1967.
9 Subsection 3(1)
Insert:
the 1980 Protocol to the 1967 United Kingdom agreement means the Protocol, signed at Canberra on 29 January 1980, between the Government of the Commonwealth of Australia and the Government of the United Kingdom of Great Britain and Northern Ireland amending the 1967 United Kingdom agreement.
10 Subsection 3(1)
Insert:
the 2003 United Kingdom convention means the Convention between the Government of Australia and the Government of the United Kingdom of Great Britain and Northern Ireland for…
Overview
The International Tax Agreements Amendment Act 2003 was enacted by the Parliament of Australia to amend the International Tax Agreements Act 1953 and related Acts, aiming to address gaps in the existing tax agreements with the United Kingdom and Mexico. This Act introduces amendments to update and replace outdated tax agreements, ensuring they reflect current tax policies and international standards. The policy objective is to facilitate smoother cross-border tax transactions by preventing double taxation and fiscal evasion, thereby fostering economic relations between Australia and its treaty partners.
Scope and Application
The International Tax Agreements Amendment Act 2003 amends the International Tax Agreements Act 1953 to implement two new tax treaties between Australia and the United Kingdom and Australia and Mexico. The Act applies to individuals, companies, and entities that are residents of Australia or the other treaty partner and to income or gains derived from sources within Australia or the other treaty partner. The Act also applies to transactions and activities conducted by these residents in or through Australia or the other treaty partner. The Act does not apply to income or gains that are specifically excluded under the terms of the treaties. The Act extends to all income or gains arising after the treaties come into force and may be amended or extended by subordinate instruments.
Key Provisions
- The International Tax Agreements Amendment Act 2003 amends the International Tax Agreements Act 1953 to update the provisions governing double taxation agreements with the United Kingdom and Mexico. Specifically, the Act introduces the 2003 United Kingdom Convention, replacing previous agreements, and incorporates the Agreement with Mexico. Key provisions of the 2003 United Kingdom Convention include the avoidance of double taxation on income and capital gains, definitions of terms such as 'permanent establishment', and provisions on income from real property, business profits, and dividends. The Convention also outlines mechanisms for eliminating double taxation, including credits for taxes paid in the other Contracting State. Similarly, the Agreement with Mexico aims to avoid double taxation on income, with specific provisions on the taxation of income from immovable property, business profits, and dividends, as well as rules on the elimination of double taxation. The Act also includes miscellaneous amendments to other Acts to reflect the changes made by this legislation.
- Parties governed by this Act, such as taxpayers and enterprises, are required to comply with the provisions of the double taxation agreements. This includes adhering to the rules on residency, determining the source of income, and applying the provisions on the taxation of various types of income, such as business profits, dividends, and royalties. Non-compliance with these provisions can result in civil or criminal penalties, including fines and imprisonment, depending on the severity and intent of the breach.
- For instance, deliberately underreporting income or falsely claiming tax credits can lead to fines and imprisonment. The specific penalties vary based on the nature of the offence and the jurisdiction's laws. In Australia, for example, serious tax evasion can result in fines of up to $22,200 and imprisonment for up to five years. Similarly, in the United Kingdom, penalties for tax evasion can include fines and imprisonment, with the severity depending on the extent and impact of the evasion.
- Area of Law
- International Tax Law
- Taxation Law
- Instrument
- Act
- Concepts
- Definitions & Interpretation
- Repeal & Amendment
- Double Taxation Relief
- Compliance Obligations
