Commonwealth Numbered Regulations - Explanatory Statements

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INCOME TAX AMENDMENT REGULATIONS 2001 (NO. 3) 2001 NO. 104

STATUTORY RULES 2001 No. 104

Issued by authority of the Assistant Treasurer

Income Tax Assessment Act 1936

Income Tax Amendment Regulations 2001 (No. 3)

The Governor-General may make regulations under section 266 of the Income Tax Assessment Act 1936 (the Act) for the purposes of the Act.

The purpose of these regulations is to prescribe for the purposes of section 23AB of the Act, certain Australian residents who are performing United Nations (UN) service with the United Nations Transitional Administration in East Timor (UNTAET) on or after 23 February 2000. The regulations entitle prescribed Australian residents to receive certain tax concessions under section 23AB of the Act. The tax concessions apply, for example, to members of the Australian Federal Police (AFP), Australian Quarantine Inspection Service (AQIS), civilian employees of the Department of Defence and to other Australian residents serving with UNTAET in East Timor.

The tax rebate under section 23AB of the Act applies to prescribed Australian residents who perform UN service, as defined by subsection 23AB(1) of the Act. That is, Australian residents, other than members of the Australian Defence Force (ADF), who serve outside Australia with an armed force under the control of the UN and with the approval of the Commonwealth. UNTAET is an armed force under the control of the UN.

Subsection 23AB(2) of the Act provides that a person, or class of persons, cannot be prescribed unless the salary, wages and allowances received in respect of this UN service is paid by, or on behalf of, the Commonwealth.

Section 23AB of the Act operates in a similar manner to section 79B of the Act, which gives members of the ADF serving in certain overseas localities a tax rebate. Under subsection 23AB(1), 'United Nations service' does not include service as a member of the ADF.

Regulation 6 of the Income Tax Regulations 1936 (the Regulations) prescribes classes of persons for the purposes of section 23AB, and formerly only prescribed members of the AFP serving in specified areas or operations.

Australian residents serving with UNTAET, whose salary, wages and allowances received in respect of this UN service are paid by, or on behalf of, the Commonwealth, satisfy the requirements of section 23AB of the Act. To enable the rebate to apply to this class of person, the regulations amended Regulation 6 to include Australian residents serving with UNTAET on or after 23 February 2000.

UNTAET was established by a Security Council Resolution after the formal separation of East Timor on 25 October 1999. Operations in East Timor were formally handed over to UNTAET on 23 February 2000 and the regulations take effect on that date.

The retrospective application of the regulations is permitted under subsection 23AB(4) of the Act which provides that regulations made for the purposes of section 23AB may be deemed to have taken effect on a date earlier than the date that the regulations are notified in the Gazette. Additionally, the regulations do not contravene subsection 48(2) of the Acts Interpretation Act 1901 as they provide a benefit to the affected taxpayers. That is, the regulations do not disadvantage or impose a liability upon any person to which this retrospectively applies. In fact, the regulations entitle the prescribed Australian residents to the rebate from 23 February 2000.

Details of the Regulations are as follows:

Regulation 1: Names the Regulations.

Regulation 2: Provides that the Regulations commence on 23 February 2000.

Regulation 3: Provides that Schedule 1 amends the Regulations.

Schedule 1: This prescribes, for the purposes of subsection 23A13(2) of the Act, Australian residents who performed service on or after 23 February 2000 with UNTAET. This extends the concessions available under section 23AB to certain Australian residents who served with UNTAET.