Income Tax Assessment (1936 Act) Amendment (Defence Force Eligible Duty) Regulations 2017

Administered by Department of the Treasury

Legislation au F2017L00592 Regulations Not in force Legislative Instrument

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EXPLANATORY STATEMENT

Issued by authority of the Minister for Revenue and Financial Services

Income Tax Assessment Act 1936

Income Tax Assessment (1936 Act) Amendment (Defence Force Eligible Duty) Regulations 2017

Section 266 of the Income Tax Assessment Act 1936 (the Act) provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed, for giving effect to the Act.

The purpose of Schedule 1 to the Income Tax Assessment (1936 Act) Amendment (Defence Force Eligible Duty) Regulations 2017 (the Amending Regulations) is to amend the Income Tax (1936 Act) Regulation 2015 (the Regulation) to ensure that duty performed by Australian Defence Force personnel serving on Operations Okra, Accordion, Manitou and Highroad continues to be ‘eligible duty’ for the purpose of Section 23AD of the Income Tax Assessment Act 1936 (the Act). This will allow the remuneration of Australian Defence Force personnel serving on these operations to be exempted from income tax on an ongoing basis. The Amending Regulations also update the geographic coordinates for Operations Manitou and Augury.

Section 23AD of the Act provides that the remuneration of Defence Force members is exempt from tax if:

•                 the individual is on ‘eligible duty’ with a specified organisation in a specified area outside Australia, and the Chief of the Defence Force has issued a certificate to that effect; and

•                 the eligible duty is not as, or under, an attaché at an Australian embassy or legation.

Subsection 23AD(2) of the Act provides that the regulations may declare that duty with a specified organisation in a specified area outside Australia and after a specified day is ‘eligible duty’.

Where the Chief of the Defence Force issues a certificate for the purposes of paragraph 23AD(1)(a) of the Act, paragraph 23AD(3)(b) of the Act states that the certificate continues in force until the individual’s departure from the specified area, revocation of the certificate by the Chief of the Defence Force, or any such time prescribed by the regulations (whichever is earliest). 

Defence operations declared to be ‘eligible duty’ are listed in regulation 6 of the Regulation with reference to a specific geographical area and period in which the duty is ‘eligible duty’. The Amending Regulations update regulation 6 to remove the end date for Operations Okra, Accordion, Manitou and Highroad on an ongoing basis and update the geographic coordinates for Operations Manitou and Augury.

The Amending Regulations will apply from the day after they are registered for the removal of the end dates for Operations Okra, Accordion, Manitou and Highroad. They will apply from 28 April 2016 for the changes to the geographic coordinates for Operation Augury and from 14 November 2016 for the changes to the geographic coordinates for Operation Manitou. The amendments will be beneficial to members of the Australian Defence Force on duty in the geographic areas that are being added to the table in subsection 6(3) of the Regulation, and no person is disadvantaged by the retrospective application of the amendments.

The Act specifies no conditions that need to be met before the power to make the Regulation may be exercised.

Public consultation was not undertaken as the amendments relate to Defence Force operations and do not impact directly on the public.

These amendments have a negligible compliance cost impact.

 

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Income Tax Assessment (1936 Act) Amendment (Defence Force Eligible Duty) Regulations 2017

This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

Schedule 1 to the Income Tax Assessment (1936 Act) Amendment (Defence Force Eligible Duty) Regulations 2017 amends the Income Tax (1936 Act) Regulation 2015 (the Regulation) to exempt from income tax the remuneration of Australian Defence Force personnel serving on Operations Okra, Accordion, Manitou and Highroad on an ongoing basis. The Amending Regulation also updates the geographic coordinates for Operations Manitou and Augury.

Human rights implications

This legislative instrument does not engage any of the applicable rights or freedoms.

Conclusion

This legislative instrument is compatible with human rights as it does not raise any human rights issues.

Overview

The Income Tax Assessment (1936 Act) Amendment (Defence Force Eligible Duty) Regulations 2017 were introduced to amend the Income Tax (1936 Act) Regulation 2015, ensuring that Australian Defence Force personnel serving on Operations Okra, Accordion, Manitou, and Highroad are considered to be on ‘eligible duty’ for the purposes of Section 23AD of the Income Tax Assessment Act 1936. This amendment ensures the ongoing exemption of the remuneration of these personnel from income tax. The enacting body was the Australian Parliament, and the policy objective was to provide a continuous tax exemption for Defence Force members engaged in specific overseas operations, thereby supporting the welfare and morale of these personnel by reducing their financial burden. The Regulations were enacted without public consultation due to their specific focus on Defence operations, and they are compatible with human rights as they do not engage any of the applicable rights or freedoms.

Scope and Application

The Income Tax Assessment (1936 Act) Amendment (Defence Force Eligible Duty) Regulations 2017 pertains to Australian Defence Force personnel who are on specific operations outside Australia. These Regulations amend the Income Tax (1936 Act) Regulation 2015 to ensure that remuneration for personnel serving on Operations Okra, Accordion, Manitou, and Highroad is exempt from income tax on an ongoing basis. The exemption applies when Defence Force members are on ‘eligible duty’ as defined under Section 23AD of the Income Tax Assessment Act 1936, provided that they are in a specified area outside Australia and the Chief of the Defence Force has issued a relevant certificate. This legislative instrument applies nationally, affecting all Defence Force personnel who meet the specified criteria. The amendments do not introduce new exclusions, exemptions, or thresholds but ensure the continuous exemption of income tax for ongoing operations. The Regulations also update the geographic coordinates for certain operations, thereby extending the geographic scope of the duty eligibility. The Regulations came into effect on various dates, with some provisions retroactive to 28 April 2016 and 14 November 2016, depending on the specific changes being implemented.

Key Provisions

The key provisions of the Income Tax Assessment (1936 Act) Amendment (Defence Force Eligible Duty) Regulations 2017 are contained in Schedule 1, which amends the Income Tax (1936 Act) Regulation 2015. These amendments serve to ensure that Australian Defence Force personnel serving on specific operations continue to be eligible for tax exemptions on their remuneration. Specifically, section 23AD of the Income Tax Assessment Act 1936 (the Act) is amended to exempt the remuneration of Defence Force members on ‘eligible duty’ outside Australia. Regulation 6 of the Regulation lists the Defence operations deemed to be ‘eligible duty’ and specifies the geographical areas and periods for these operations. The Amending Regulations update this list to remove end dates for Operations Okra, Accordion, Manitou and Highroad, thus extending the exemption on an ongoing basis. Additionally, the geographic coordinates for Operations Manitou and Augury are updated. The obligations imposed by the Act and the subsequent Amending Regulations primarily concern Defence Force personnel serving in specified areas outside Australia. Defence Force members must be on duty in the specified geographic areas as listed in the updated Regulation for their remuneration to qualify for the tax exemption. The Chief of the Defence Force is also required to issue a certificate confirming that the duty is ‘eligible duty’ for tax exemption purposes. The certificate remains in effect until the individual leaves the specified area, the certificate is revoked by the Chief of the Defence Force, or any prescribed time in the regulations. The Act does not explicitly detail offences, penalties, or consequences for breaches. However, the implications of non-compliance could involve the loss of tax exemptions for Defence personnel, potentially leading to significant financial repercussions for the individuals concerned. The Amending Regulations themselves do not introduce new offences or penalties; instead, they clarify and extend existing provisions to ensure continued tax exemptions for Defence personnel serving in the specified operations and areas. The compliance cost impact of these amendments is negligible, as they primarily serve to update existing regulations rather than impose new requirements.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.