International Tax Agreements Amendment Act 2016

Administered by Department of the Treasury

Legislation au C2016A00064 In force Act

Legislation content

 

 

 

 

 

 

International Tax Agreements Amendment Act 2016

 

No. 64, 2016

 

 

 

 

 

An Act to amend the law relating to taxation, and for related purposes

 

 

Contents

1 Short title

2 Commencement

3 Schedules

Schedule 1—Amendments

Part 1—Agreement with Germany

International Tax Agreements Act 1953

Part 2—Technical amendments

International Tax Agreements Act 1953

Taxation (Interest on Overpayments and Early Payments) Act 1983

 

 

 

 

International Tax Agreements Amendment Act 2016

No. 64, 2016

 

 

 

An Act to amend the law relating to taxation, and for related purposes

[Assented to 20 October 2016]

The Parliament of Australia enacts:

1  Short title

  This Act is the International Tax Agreements Amendment Act 2016.

2  Commencement

 (1) Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.

 

Commencement information

Column 1

Column 2

Column 3

Provisions

Commencement

Date/Details

1.  The whole of this Act

The day this Act receives the Royal Assent.

20 October 2016

Note: This table relates only to the provisions of this Act as originally enacted. It will not be amended to deal with any later amendments of this Act.

 (2) Any information in column 3 of the table is not part of this Act. Information may be inserted in this column, or information in it may be edited, in any published version of this Act.

3  Schedules

  Legislation that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.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—Amendments

Part 1—Agreement with Germany

International Tax Agreements Act 1953

1  Subsection 3AAA(1) (definition of German agreement)

Repeal the definition, substitute:

German agreement means:

 (a) the Agreement between Australia and the Federal Republic of Germany for the elimination of double taxation with respect to taxes on income and on capital and the prevention of fiscal evasion and avoidance; and

 (b) the protocol to that agreement;

each done at Berlin on 12 November 2015.

Note: In 2016, the text of this agreement was accessible through the Australian Treaties Library on the AustLII website (www.austlii.edu.au).

2  Subsection 3AAB(1)

Insert:

German 1972 agreement means:

 (a) the Agreement between the Commonwealth of Australia and the Federal Republic of Germany for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital and to certain other taxes; and

 (b) the protocol to that agreement;

each done at Melbourne on 24 November 1972.

Note 1: The text of this agreement and protocol is set out in Australian Treaty Series 1975 No. 8 ([1975] ATS 8).

Note 2: Section 11 continues to give this agreement and protocol the force of law in respect of certain income.

3  Subsection 5(1) (after table item dealing with French convention)

Insert:

German agreement

nil

4  Section 11 (heading)

Repeal the heading, substitute:

11  Earlier agreement with Germany

5  Subsection 11(1)

Omit “Subject to this Act, on and after the date of entry into force of the German agreement, the provisions of the agreement, so far as those provisions affect Australian tax, have, and shall be deemed to have had,”, substitute “Subject to this Act, the provisions of the German 1972 agreement, so far as those provisions affect Australian tax, continue to have”.

6  Subsection 11(3)

Repeal the subsection, substitute:

 (2) For the purposes of the Assessment Act, income that:

 (a) is derived by a person who is a resident of the Federal Republic of Germany for the purposes of the German 1972 agreement; and

 (b) is income in relation to which the agreement remains effective; and

 (c) is income that, under Articles 6 to 8 and 10 to 16 of the agreement, may be taxed in Australia;

is taken to be derived from sources in Australia.

Part 2—Technical amendments

International Tax Agreements Act 1953

7  Subsection 3AAA(1) (note at the end of the definition of Swiss convention)

Repeal the note, substitute:

Note: The text of this convention and protocol is set out in Australian Treaty Series 2014 No. 33 ([2014] ATS 33).

8  Subsection 3AAB(1) (note 2 at the end of the definition of Swiss 1980 agreement)

Omit “or fringe benefits”.

9  Subsection 24(1) (note)

Repeal the note, substitute:

Note: Article 9 of the United Kingdom convention deals with profits of associated enterprises.

Taxation (Interest on Overpayments and Early Payments) Act 1983

10  Subsection 3A(1A)

Repeal the subsection, substitute:

 (1A) For the purposes of this Act, a decision to which this Act applies is made to provide correlative relief for economic double taxation if:

 (a) there is a double tax agreement applying to Australia and one of the following (a treaty partner):

 (i) a foreign country or a constituent part of a foreign country;

 (ii) an overseas territory; and

 (b) the treaty partner taxes profits, or purports to tax profits, in accordance with, or consistent with the principles of:

 (i) if the treaty partner is the United Kingdom—Article 9 of the United Kingdom convention (within the meaning of the International Tax Agreements Act 1953); or

 (ii) otherwise—a corresponding provision of another double tax agreement; and

Note: Article 9 of the United Kingdom convention deals with profits of associated enterprises.

 (c) the decision is made in giving effect to subsection 24(3) of that Act.

 

 

 

 

[Minister’s second reading speech made in—

House of Representatives on 1 September 2016

Senate on 13 October 2016]

 

(90/16)

 

Overview

The International Tax Agreements Amendment Act 2016, enacted by the Parliament of Australia, is a legislative measure aimed at updating and refining the legal framework surrounding international tax agreements, specifically addressing taxation issues between Australia and its treaty partners. This Act primarily seeks to incorporate recent tax agreements into Australian law and make technical adjustments to existing tax legislation to ensure consistency and accuracy in tax treatments. The 2016 Act amends the International Tax Agreements Act 1953 to reflect the updated agreement with Germany, ensuring that the provisions of this agreement continue to apply under Australian tax law. Additionally, it makes minor technical amendments to both the International Tax Agreements Act 1953 and the Taxation (Interest on Overpayments and Early Payments) Act 1983 to align these Acts with the most recent international tax conventions. The policy objective of the International Tax Agreements Amendment Act 2016 is to maintain and enhance the effectiveness of Australia's international tax agreements, ensuring they reflect current economic realities and international tax standards. By updating the legal definitions and provisions related to these agreements, the Act aims to facilitate smoother cross-border tax transactions and reduce the potential for double taxation, thereby supporting Australia's broader economic and trade relationships.

Scope and Application

The International Tax Agreements Amendment Act 2016 serves to amend the International Tax Agreements Act 1953 and the Taxation (Interest on Overpayments and Early Payments) Act 1983, focusing on updating and clarifying tax agreements, particularly with Germany, and addressing technical aspects of the existing tax framework. This Act applies to entities and individuals who are subject to taxation under the relevant agreements, with specific focus on those who are residents of Germany for the purposes of the German 1972 agreement and those affected by the provisions concerning the elimination of double taxation and prevention of fiscal evasion. Its jurisdictional reach is nationwide, aligning with the Commonwealth of Australia's legislative authority. The Act modifies existing definitions and provisions to reflect updated tax agreements and protocols, ensuring that the legislative framework remains current and effective. Notably, the Act also includes technical amendments to improve the clarity and enforceability of the existing tax agreements. The application of the Act is further extended through subordinate instruments as necessary to implement the changes effectively across the relevant jurisdictions.

Key Provisions

The International Tax Agreements Amendment Act 2016 primarily amends the International Tax Agreements Act 1953 and the Taxation (Interest on Overpayments and Early Payments) Act 1983. The amendments introduced by the Act pertain to the agreement with Germany, with specific modifications made to the definitions and provisions related to the tax agreements with Germany. For instance, the Act repeals the definition of the "German agreement" in subsection 3AAA(1) and substitutes it with a new definition that specifies the agreement and its protocol done at Berlin on 12 November 2015 (Schedule 1, Part 1, item 1). Similarly, the Act introduces a new definition for "German 1972 agreement" in subsection 3AAB(1), detailing the agreement and its protocol done at Melbourne on 24 November 1972 (Schedule 1, Part 1, item 2). Furthermore, the Act modifies subsection 5(1) to insert a new item for the "German agreement" (Schedule 1, Part 1, item 3). The International Tax Agreements Amendment Act 2016 imposes certain obligations and requirements on the parties and entities it governs. For instance, the Act mandates that the provisions of the German 1972 agreement continue to have effect for Australian tax purposes, as specified in subsection 11(1) (Schedule 1, Part 1, item 5). Additionally, the Act requires that income derived by a resident of Germany, in relation to which the agreement remains effective, and which may be taxed in Australia under specified articles of the agreement, is taken to be derived from sources in Australia, as outlined in subsection 11(2) (Schedule 1, Part 1, item 6). These provisions ensure that the tax agreements with Germany are properly implemented and enforced within the Australian tax framework. The International Tax Agreements Amendment Act 2016 also addresses offences, penalties, and consequences for breaches of the Act. While the Act does not explicitly state specific offences or penalties, it is implicit that any breaches of the tax agreements or the provisions of the Act could lead to legal consequences. Given the nature of tax legislation, breaches could potentially result in civil or criminal penalties, including fines and imprisonment, depending on the severity and intent of the breach. However, the exact penalties would be determined in accordance with the relevant tax laws and regulations in force at the time of the breach.

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Area of Law
Taxation Law
Instrument
Act
Concepts
Commencement Provisions
Repeal & Amendment
Definitions & Interpretation
Offence Provisions

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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.