Treasury Laws Amendment (Foreign Investment) Bill 2024 - Commentary on Ministerial Responses [2024] AUSStaCSBSD 79 (27 March 2024)

• Treasury Laws Amendment (Foreign Investment) Bill 2024106
• Retrospective application107

---

Treasury Laws Amendment (Foreign Investment) Bill 2024^[106]

Purpose	The bill seeks to provide an express ordering rule to ensure the law imposing non-Australian tax prevails in the event of any inconsistency with the provisions of Australia’s bilateral tax treaties.
Portfolio	Treasury
Introduced	House of Representatives on 7 February 2024
Bill status	Before the Senate

Retrospective application^[107]

2.179 Item 1 of Schedule 1 to the bill seeks to insert subsection 5(3) into the International Tax Agreements Act 1953, which provides that the operation of a provision of an agreement provided for in subsection 5(1) is subject to anything inconsistent with the provision contained in a law of the Commonwealth, or of a state or territory, that imposes a tax other than Australian tax,^[108] unless expressly provided otherwise in that law. Item 2 of Schedule 1 clarifies that the amendment applies in relation to taxes (other than Australian tax) payable on or after 1 January 2018, and in relation to tax periods that end on or after 1 January 2018.

2.180 The effect of this amendment is that where a provision of a tax treaty listed in subsection 5(1) of the International Tax Agreements Act 1953 is inconsistent with a law of the Commonwealth, state or territory, the provision of the tax treaty will not operate to the extent of the inconsistency. The explanatory memorandum explains that this is to clarify any uncertainty and to ensure that the Commonwealth, state or territory tax continues to apply as intended and that taxes collected since 1 January 2018 are valid.^[109]

2.181 The committee reported on its scrutiny concerns in relation to the matter in Scrutiny Digest 3 of 2024^[110] and on the Treasurer’s response to these concerns in Scrutiny Digest 4 of 2024.^[111]

2.182 Following receipt of correspondence concerning the bill, the committee wrote to the Treasurer seeking further advice.^[112] The correspondence and the further advice received from the Treasurer concerning the matter are available on the committee’s webpage.

2.183 The committee thanks the Treasurer for his constructive engagement with the committee on this matter.

2.184 In light of the Treasurer’s response, the committee makes no further comment.

---

^[106] This entry can be cited as: Senate Standing Committee for the Scrutiny of Bills, Treasury Laws Amendment (Foreign Investment) Bill 2024, Scrutiny Digest 4 of 2024; [2024] AUSStaCSBSD 79.

^[107] Schedule 1, item 2. The committee draws senators’ attention to this provision pursuant to Senate standing order 24(1)(a)(i).

^[108] Section 3 of the International Tax Agreements Act 1953 defines Australian tax to mean: income tax imposed as such by an Act or fringe benefits tax imposed by the Fringe Benefits Tax Act 1986.

^[109] Explanatory memorandum, p. 35.

^[110] Senate Scrutiny of Bills Committee, Scrutiny Digest 3 of 2024 (28 February 2024) pp. 48–50.

^[111] Senate Scrutiny of Bills Committee, Scrutiny Digest 4 of 2024 (20 March 2024) pp. 61–63.

^[112] See correspondence relating to Scrutiny Digest 5 of 2024.