STATUTORY RULES.
1943. No. 195.
REGULATION UNDER THE NATIONAL SECURITY ACT 1939-1943.*
I, THE Deputy of the GOVERNOR-GENERAL in and over the Commonwealth of Australia, acting with the advice of the Federal Executive Council, hereby make the following Regulation under the National Security Act 1939-1943.
Dated this sixteenth day of August, 1943.
Deputy of the Governor-General.
By His Excellency’s Command,
for and on behalf of the Minister of State for Defence.
———
Amendment of the National Security (Supplementary) Regulations.†
The National Security (Supplementary) Regulations are amended by adding at the end thereof the following regulation:—
Deduction of instalments of income tax from pay of persons employed by Governments of other countries.
“110.—(1.) The Commissioner of Taxation may enter into an arrangement with an authority in Australia of the Government of a country other than the Commonwealth providing for deductions, in accordance with the provisions of the Income Tax Assessment Act 1936-1943 and of this regulation, to be made from the salary or wages of persons who are or become employed by that Government through that authority and to whom paragraph (a) of sub-regulation (2.) of this regulation applies, and for the amounts deducted to be paid to the Commissioner of Taxation in accordance with the arrangement.
“(2.) Any person who—
(a) is in receipt of salary or wages which are not exempt from income tax under the Income Tax Assessment Act 1936-1943; and
(b) is a person in relation to whom an arrangement made under this regulation applies,
shall, within fourteen days after he has been notified by or on behalf of his employer that the arrangement is in force, by writing under his hand delivered to the person charged with the payment of his salary or
* Notified in the Commonwealth Gazette on , 1943.
† Statutory Rules 1940, No. 126, as amended to date. For previous National Security (Supplementary) Regulations see footnote † to Statutory Rules 1943, No. 169, and see also Statutory Rules 1943, Nos. 172, 173, 180 and 182.
4725.—Price 3d 32/3.8.1943.
wages, authorize his employer, and shall at all times keep his employer authorized, to make deductions from his salary or wages at the rates at which deductions would be required, by the provisions of the Income Tax Assessment Act 1936-1943, to be made from his salary or wages if he were an employee as defined in section 221a of that Act receiving that salary or those wages from an employer as so defined.
“(3.) The amounts of any deductions made in pursuance of an authority given under the last preceding sub-regulation shall be paid to the Commissioner of Taxation and shall be treated by the Commissioner as if they represented the face value of tax stamps delivered to the person giving the authority in accordance with the provisions of the Income Tax Assessment Act 1936-1943 and produced by him to the Commissioner”.
By Authority: L. F. Johnston, Commonwealth Government Printer, Canberra.
Overview
Statutory Rules 1943 No. 195, made under the National Security Act 1939-1943, was introduced to address the need for streamlined tax collection from employees of foreign governments operating in Australia during World War II. The Act was enacted by the Commonwealth of Australia, with the authority exercised by the Deputy of the Governor-General acting on advice from the Federal Executive Council. The policy objective was to facilitate the deduction of income tax from the salaries and wages of employees of foreign governments in a manner consistent with Australian tax law, ensuring that these individuals contribute to the national tax base while employed in Australia. This regulation was designed to operate in conjunction with the Income Tax Assessment Act 1936-1943, allowing for the Commissioner of Taxation to collect taxes through employers of foreign government staff.
Scope and Application
This legislation pertains to the amendment of the National Security (Supplementary) Regulations under the National Security Act 1939-1943. Specifically, the amendment allows for the deduction of income tax instalments from the pay of persons employed by the governments of other countries through an arrangement between the Commissioner of Taxation and the relevant authority in Australia of the employing government. This arrangement applies to individuals who are in receipt of salary or wages not exempt from income tax under the Income Tax Assessment Act 1936-1943. The regulation mandates that these individuals must authorise their employer to make the deductions within fourteen days of being notified of the arrangement, and the deductions are to be made at the rates specified in the Income Tax Assessment Act 1936-1943. The amounts deducted are to be paid to the Commissioner of Taxation and treated as if they were the face value of tax stamps. This regulation extends to the Commonwealth of Australia and applies to any arrangements made under its authority, impacting employees of foreign governments who are subject to Australian income tax laws.
Key Provisions
The regulation introduced under the National Security Act 1939-1943 permits the Commissioner of Taxation to make arrangements with authorities in Australia representing foreign governments to deduct income tax from the salaries or wages of employees of these foreign governments. This arrangement is to be made in accordance with the Income Tax Assessment Act 1936-1943 and the provisions of the regulation itself (Regulation 110(1)). Specifically, Regulation 110(2) mandates that employees of foreign governments, who are receiving salaries or wages not exempt from income tax and who are covered by such an arrangement, must authorize their employer to deduct income tax from their pay within fourteen days of being notified that the arrangement is in force. The employee must also maintain this authorization at all times (Regulation 110(2)(a) and (b)).
The regulation imposes several obligations on the parties involved. Firstly, the Commissioner of Taxation must enter into an arrangement with the relevant foreign government authority, ensuring that income tax is deducted from the salaries or wages of employees according to the Income Tax Assessment Act 1936-1943 (Regulation 110(1)). Secondly, employees who are covered by these arrangements must provide written authorization to their employer to make the necessary deductions from their salary or wages (Regulation 110(2)(a) and (b)). Employers, in turn, are required to comply with the terms of the arrangement and ensure that deductions are made at the appropriate rates as stipulated by the Income Tax Assessment Act 1936-1943. Lastly, the amounts deducted are to be treated as if they were the face value of tax stamps, and they must be paid to the Commissioner of Taxation (Regulation 110(3)).
Failure to comply with the provisions of this regulation could result in civil or criminal consequences. Although the regulation itself does not explicitly state the penalties for non-compliance, breaches of tax laws, such as the Income Tax Assessment Act 1936-1943, can lead to substantial penalties. For example, under the Income Tax Assessment Act, penalties for non-compliance can include fines and, in severe cases, imprisonment. The exact penalties depend on the nature and extent of the non-compliance but can be significant, reflecting the importance of adhering to tax regulations.