EXPLANATORY STATEMENT

Diplomatic Privileges and Immunities (Indirect Tax Concession Scheme) Amendment Determination 2005 (No.1)

Issued by the Authority of the Minister for Foreign Affairs

Subject: Diplomatic Privileges and Immunities Act 1967

Diplomatic Privileges and Immunities (Indirect Tax Concession Scheme) Amendment Determination 2005 (No. 1)

Section 10B of the Diplomatic Privileges and Immunities Act 1967 provides that the Minister may make Determinations to provide the Commissioner of Taxation to pay the head of the mission (or a person in a class of persons determined by the Minister) an amount equal to the amount of indirect tax payable (if any) in respect of the supply of that acquisition. 

The purpose of the Determination is to amend the Diplomatic Privileges and Immunities (Indirect Tax Concession Scheme) Determination 2000 to create new and amend existing Indirect Tax Concession Scheme (ITCS) packages which provide tax concessions to diplomatic missions and accredited staff.  The effect of the Determination is to update the schedule of countries by amending existing entries and adding new entries that detail the ITCS package available to particular countries. 

Diplomatic missions and accredited staff are exempt from paying direct taxes under the Vienna Convention on Diplomatic Relations (Articles 23, 34 and 37).  In line with international practice, tax concessions on indirect taxes are also extended to Diplomatic missions and accredited staff.  In Australia, indirect tax concessions are provided under the ITCS.  Individual packages are negotiated with each country, and the level of concessions provided is broadly based on reciprocity.