House of Representatives

Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill 2014

Excess Exploration Credit Tax Bill 2014

Excess Exploration Credit Tax Act 2015

Explanatory Memorandum

(Circulated by the authority of the Treasurer, the Hon J. B. Hockey MP)

Chapter 5 - Disclosing tax information relating to proceeds of crime orders

Outline of chapter

5.1 Schedule 5 to this Bill amends the Taxation Administration Act 1953 (TAA 1953) to allow taxation officers to record or disclose protected information to support or enforce a proceeds of crime order. It also clarifies that all orders relating to unexplained wealth made under a state or territory law are included in the definition of 'proceeds of crime order'.

Context of amendments

5.2 Taxation officers may record or disclose protected information for the purpose of the making, or proposed or possible making, of a proceeds of crime order under certain Commonwealth, state or territory laws (section 355-70 of Schedule 1 to the Taxation Administration Act 1953). A person's tax information may be of central importance to investigations, litigation and enforcement concerning the proceeds of crime.

5.3 These records or disclosures may be made for or to:

·
authorised law enforcement agency officers;
·
courts or tribunals; or
·
prescribed Royal Commissions, commissions of inquiry and boards of inquiry of a state or territory.

5.4 In practice, these entities may also seek tax information to support or enforce a proceeds of crime order after it has been made.

5.5 Proceeds of crime order is defined in subsection 355-70(5) of Schedule 1 to the TAA 1953 and currently includes an unexplained wealth order (within the meaning of the Proceeds of Crime Act 2002) or a corresponding order under a state law or territory law. Differences between the Commonwealth's unexplained wealth orders and state and territory unexplained wealth schemes may raise some doubt as to whether certain state and territory unexplained wealth orders 'correspond to' Commonwealth unexplained wealth orders.

Summary of new law

5.6 The amendments allow taxation officers to record or disclose protected information for the purpose of supporting or enforcing a proceeds of crime order.

5.7 The amendments also clarify that the definition of proceeds of crime order includes unexplained wealth orders made under a state or territory law.

Comparison of key features of new law and current law

New law Current law
Taxation officers may make records for or disclosures to certain entities for the purpose of the making, or proposed or possible making, or supporting or enforcing, of a proceeds of crime order. Taxation officers may make records for or disclosures to certain entities for the purpose of the making, or proposed or possible making, of a proceeds of crime order.
The definition of proceeds of crime order includes an order (including a declaration or direction), under a state law or territory law, relating to unexplained wealth. The definition of proceeds of crime order includes an order, under a state law or territory law, corresponding to an unexplained wealth order (within the meaning of the (Proceeds of Crime Act 2002).

Detailed explanation of new law

5.8 It is an offence for a taxation officer to record or disclose protected information (section 355-25 of Schedule 1 to the TAA 1953). Section 355-70 of Schedule 1 to the TAA 1953 provides that the offence will not apply in certain circumstances, including where taxation officers make a record for or a disclosure to certain entities for the purpose of the making, or proposed or possible making, of a proceeds of crime order. This includes disclosure of protected information for the purposes of an investigation before any criminal proceeds action is commenced.

5.9 This Schedule extends the operation of this exception to circumstances where taxation officials made a record or disclosure for the purpose of supporting or enforcing a proceeds of crime order. [Schedule 5, items 1 and 2, subsection 355-70(1) of Schedule 1 to the TAA 1953]

5.10 Proceeds of crime order is defined in subsection 355-70(5) of Schedule 1 to the TAA 1953 and currently includes an unexplained wealth order (within the meaning of the Proceeds of Crime Act 2002) or a corresponding order under a state law or territory law.

5.11 Differences between the unexplained wealth framework under the Proceeds of Crime Act 2002 and unexplained wealth schemes under state and territory laws may raise a level of uncertainty as to whether certain state and territory unexplained wealth orders 'correspond to' Commonwealth unexplained wealth orders.

5.12 This Schedule clarifies that all orders (including declarations or directions) relating to unexplained wealth that may be made under a state or territory law will be included in the definition of proceeds of crime order. This ensures that taxation information can be disclosed to law enforcement for the purposes of unexplained wealth investigations and prosecutions, notwithstanding that the legislative model in a State or Territory may be different to the Commonwealth scheme. This includes any preliminary orders relating to unexplained wealth such as an order to freeze or restrain property. [Schedule 5, item 3, subsection 355-70(5) of Schedule 1 to the TAA 1953]

Application and transitional provisions

5.13 The amendments will apply from Royal Assent.

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill 2014 -

Disclosing tax information relating to proceeds of crime orders

5.14 This Schedule 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

5.15 Schedule 5 to this Bill amends the Taxation Administration Act 1953 to allow taxation officers to record or disclose protected information for the purpose of supporting or enforcing a proceeds of crime order. It also clarifies the definition of proceeds of crime order to ensure that it extends to unexplained wealth orders made under a state or territory law.

Human rights implications

5.16 These amendments engages the right to privacy in Article 17 of the International Covenant on Civil and Political Rights, which prohibits arbitrary or unlawful interference with privacy, because personal tax information may be recorded for or disclosed to entities other than the person the information relates to.

5.17 The amendments are consistent with the right to privacy because the records or disclosures will be authorised by law and not arbitrary. The amendments provide a reasonable, necessary and proportionate means of achieving the legitimate objective of confiscating financial benefits gained through criminal activities.

5.18 Where a proceeds of crime order has been made against an individual under a Commonwealth, state or territory law, these amendments will ensure that law enforcement bodies and other relevant entities have access to the information they need to support and enforce the order. The amendments also clarify that proceeds of crime orders relating to unexplained wealth state or territory laws are included.

Conclusion

5.19 This Schedule is consistent with the right to privacy in Article 17 of the International Covenant on Civil and Political Rights.


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