Record keeping requirements for foreign general insurers carrying on business in Australia through a permanent establishment: 2006/LBI/Fsig1 (Cth)

Record keeping requirements for foreign general insurers carrying on business in Australia through a permanent establishment

Legislative instrument

I, Paul Duffus, make the following instrument for the purposes of subsection 820-960(4) of the Income Tax Assessment Act 1997 (ITAA 1997).

Citation

1. This instrument may be cited as: Record keeping requirements for foreign general insurers carrying on business in Australia through a permanent establishment:2006/LBI/FSIG1.

Commencement

2. This instrument commences on 1 July 2002.

Context

3. Section 820-960 of ITAA 1997 provides that an entity which is—

1.an inward investor (general); ^[1]

[1] An inward investor (general) is an entity which is a foreign entity throughout a period that is all or a part of an income year, but is not a financial entity, nor an authorised deposit-taking institution (ADI), at any time during that period (subsection 820-185(2)).

2.an inward investor (financial); ^[2] or

[2] An inward investor (financial) is an entity which is both a foreign entity and a financial entity throughout a period that is all or a part of an income year (subsection 820-185(2)).

3.an inward investing entity (ADI); [3]

[3] An inward investing entity (ADI) is a foreign bank that carries on its banking business in Australia at or through one or more of its Australian permanent establishments (subsection 820-395(2)).

during all or any part of an income year, and which carries on business in Australia through one or more Australian permanent establishments throughout that year must keep certain records for the Australian permanent establishments.

4. These entities may, pursuant to subsection 820-960(1A), subsection 820-960(1B), subsection 820-960(1C) and subsection 820-960(1D) choose to prepare the relevant records according to either:

1.   the Australian accounting standards; or

2.     the corresponding standards (however described) of Germany, Japan, France, USA, UK, Canada, New Zealand; or

3.      the international accounting standards.

5. Subsection 820-960(4), grants power to the Commissioner of Taxation (the Commissioner) to exempt an entity or a class of entities from complying with the requirement to use Australian accounting standards for one or more income years if he is satisfied that it would be unreasonable that the entity, or the entities in that class, to be required to do so.

6., The Commissioner has reviewed the record keeping requirements in subsection 820-960(1A), and after consultation with industry, has decided that foreign general insurers who choose to prepare the required records pursuant to the above referred subsection, will be exempted from the requirement to use the Australian accounting standards in preparing the financial statements.

Decision

7. Pursuant to subsection 820-960(4), foreign general insurers authorised to operate in Australia by the Australian Prudential Regulation Authority under the Insurance Act 1973 need not comply with all or any part of the accounting standards for the purposes of subsection 820-960(1A) from the year of income commencing on or after 1 July 2002.

Application

8. The exemption applies to the foreign general insurer in relation to the income year commencing on or after 1 July 2002.

Dated this 22 May 2006

(Original signed by)

Paul Duffus

Deputy Commissioner of Taxation