EXPLANATORY STATEMENT
Issued by authority of the Assistant Treasurer
Income Tax Assessment Act 1997
Income Tax Assessment Amendment (Kiribati Phoenix Islands Protected Area Conservation Trust) Regulations 2019
The Income Tax Assessment Act 1997 (the Act) provides for various matters relevant to the assessment of income tax, including various types of assessable income and exempt income.
Section 909-1 of 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 carrying out or giving effect to the Act.
The purpose of the Income Tax Assessment Amendment (Kiribati Phoenix Islands Protected Area Conservation Trust) Regulations 2019 (the Amending Regulations) is to amend the Income Tax Assessment Regulations 1997 to allow the Kiribati Phoenix Islands Protected Area Conservation Trust to be exempt from income tax from 1 July 2015 to 30 June 2023.
Division 50 of the Act provides that the income of certain entities is exempt from income tax. Section 50-5 of the Act provides that a scientific institution is exempt from income tax if they meet the special conditions located under section 50-55 of the Act. One of the special conditions is located at paragraph 50-55(1)(c) of the Act, where the scientific entity must be a prescribed institution that is located outside Australia and is exempt from income tax in the country in which it is resident.
The Amending Regulations list the Kiribati Phoenix Islands Protected Area Conservation Trust as a prescribed institution.
The Amending Regulations will assist the Kiribati Phoenix Islands Protected Area Conservation Trust’s ability to fund its charitable, educational and scientific purposes. Kiribati’s Phoenix Islands Protected Area is listed on the UNESCO Word Heritage List.
The Amending Regulations applies to allow the Kiribati Phoenix Islands Protected Area Conservation Trust exempt from income tax from 1 July 2015 to 30 June 2023. The retrospective operation of the exemption is beneficial to the Kiribati Phoenix Islands Protected Area Conservation Trust.
Public consultation was not undertaken as the Amending Regulations relate only to the Kiribati Phoenix Islands Protected Area Conservation Trust.
The Amending Regulations has a negligible compliance cost impact.
The Amending Regulations is a legislative instrument for the purposes of the Legislation Act 2003.
The Amending Regulations commenced on the day after it was registered.
A statement of Compatibility with Human Rights is below.
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Income Tax Assessment Amendment (Kiribati Phoenix Islands Protected Area Conservation Trust) Regulations 2019
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
The purpose of the Income Tax Assessment Amendment (Kiribati Phoenix Islands Protected Area Conservation Trust) Regulations 2019 (the Amending Regulations) is to amend the Income Tax Assessment Regulations 1997 by including the Kiribati Phoenix Islands Protected Area Conservation Trust as a prescribed institution from 1 July 2015 to 30 June 2023 for the purposes providing an income tax exemption.
The Amending Regulations will assist the Kiribati Phoenix Islands Protected Area Conservation Trust’s ability to fund its charitable, educational and scientific purposes. Kiribati’s Phoenix Islands Protected Area is listed on the UNESCO Word Heritage List.
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 Amendment (Kiribati Phoenix Islands Protected Area Conservation Trust) Regulations 2019 were enacted to amend the Income Tax Assessment Regulations 1997, allowing the Kiribati Phoenix Islands Protected Area Conservation Trust to be exempt from income tax from 1 July 2015 to 30 June 2023. This was introduced by the Australian Government to support the Trust’s charitable, educational, and scientific objectives. The Trust is recognised as a prescribed institution under Division 50 of the Income Tax Assessment Act 1997, which provides exemptions for certain scientific entities. The regulations were made under the authority of the Assistant Treasurer and aim to facilitate the Trust's ability to fund its operations, given that the Kiribati Phoenix Islands Protected Area is a UNESCO World Heritage site. Public consultation was not deemed necessary as the regulations specifically pertain to the Trust, and they are expected to have a negligible impact on compliance costs.
Scope and Application
The Income Tax Assessment Amendment (Kiribati Phoenix Islands Protected Area Conservation Trust) Regulations 2019 applies specifically to the Kiribati Phoenix Islands Protected Area Conservation Trust, allowing it to be exempt from income tax for a period from 1 July 2015 to 30 June 2023. This exemption is contingent on the Trust meeting certain criteria under the Income Tax Assessment Act 1997, specifically being recognised as a scientific institution that is located outside Australia and is exempt from income tax in its country of residence. The exemption is designed to support the Trust's charitable, educational, and scientific activities within the Kiribati Phoenix Islands Protected Area, which is recognised by UNESCO as a World Heritage site. The Regulations are a subordinate instrument of the Income Tax Assessment Act 1997, extending the Act's provisions to provide specific tax exemptions as per the outlined conditions. There are no stated exemptions or exclusions within these Regulations beyond the specified period and conditions of the exemption. The Regulations came into effect the day after they were registered, and their impact on compliance is deemed negligible.
Key Provisions
The Income Tax Assessment Amendment (Kiribati Phoenix Islands Protected Area Conservation Trust) Regulations 2019 (the Amending Regulations) is a legislative instrument that amends the Income Tax Assessment Regulations 1997. It does so by including the Kiribati Phoenix Islands Protected Area Conservation Trust as a prescribed institution (section 1). This amendment permits the Trust to be exempt from income tax from 1 July 2015 to 30 June 2023 (section 2). This legislative change is significant as it aligns with the special conditions under section 50-5 of the Income Tax Assessment Act 1997, which grants tax exemptions to scientific institutions that meet specific criteria, including being located outside Australia and being exempt from income tax in their country of residence (section 50-55(1)(c)).
The obligations imposed by these Regulations on the Kiribati Phoenix Islands Protected Area Conservation Trust include compliance with the conditions set forth in the Income Tax Assessment Act 1997. The Trust must ensure that it remains a scientific institution as defined by the Act and continues to operate for charitable, educational, and scientific purposes. Additionally, the Trust must maintain records and documentation to demonstrate compliance with the tax exemption provisions and adhere to any reporting requirements stipulated by the Commissioner of Taxation. The Trust’s status as a prescribed institution is contingent upon its continued compliance with these obligations.
Any breach of the conditions for tax exemption could lead to the Trust losing its status as a prescribed institution and, consequently, its exemption from income tax. While the Amending Regulations themselves do not specify penalties for non-compliance, the Income Tax Assessment Act 1997 provides for general penalties and enforcement measures. For instance, failure to comply with the Act's provisions could result in the imposition of penalties, including fines and interest charges on unpaid taxes. The severity of penalties would depend on the nature and extent of the non-compliance, with potential maximum penalties varying based on the specific breach.
Overall, the Amending Regulations aim to facilitate the Trust’s ability to operate without the financial burden of income tax, thereby supporting its conservation efforts within the Kiribati Phoenix Islands Protected Area, which is recognised as a UNESCO World Heritage site.