Explanatory Memorandum
(Circulated by the Treasurer, the Hon. B.M. Snedden, Q.C., M.P.)Introductory Note.
The purpose of this memorandum is to explain the provisions of four Bills amending taxation laws administered by the Commissioner of Taxation.
The main purpose of each of these Bills is to repeal provisions which will become redundant upon the Vienna Convention on Consular Relations being given the force of law in Australia by the proposed Consular Privileges and Immunities Bill 1972. The provisions which are to be repealed correspond in practical effect with the terms of the Consular Convention. They were inserted in the taxation Acts to achieve this correspondence and in order to preserve appropriate relationships between consular and diplomatic exemptions (the latter being derived from the Diplomatic Privileges and Immunities Act 1967 which gives the force of law in Australia to the Vienna Convention on Diplomatic Relations). For example, section 23AAA of the Income Tax Assessment Act, which it is proposed to repeal, was inserted in 1967 to authorise income tax exemptions for consular personnel that correspond with those required by the Consular Convention.
So far as income tax, sales tax, Territory pay-roll tax and A.C.T. stamp duty are concerned, the giving of the force of law to the Vienna Convention by the Consular Privileges and Immunities Bill 1972 will, in broad terms, have the following effects in relation to consular posts in Australia:
Income Tax.
The various categories of consular personnel will continue to be entitled to the following exemptions -
| Category of person | Exemption |
|---|---|
| . Consular officers, including heads of consular posts, other than honorary consular officers. | Exempt from Australian tax, except on private income having its source in Australia. No exemption if the person is an Australian citizen or permanently resident here. (Articles 49 and 71 of the Convention.) |
| . Families of consular officers (other than honorary consular officers) forming part of their household. | Exempt from Australian tax, except on private income having its source in Australia. No exemption if the person is an Australian citizen or permanently resident here, or is engaged in any private gainful occupation in Australia. Exemption is also unavailable if the family head is an Australian citizen or permanently resident here. (Articles 49, 57 and 71.) |
| . Honorary consular officers. | Exempt from Australian tax on remuneration and emoluments received in respect of the exercise of consular functions. No exemption if an Australian citizen or permanently resident here. (Articles 66 and 71.) |
| . Families of honorary consuls. | No exemption. (Article 58(3.).) |
| . Administrative and technical staff. | Exempt from Australian tax, except on private income having its source in Australia. No exemption if the person is carrying on any private gainful occupation in Australia or is an Australian citizen or permanently resident here. (Articles 49, 57 and 71.) |
| . Families of administrative and technical staff forming part of their household. | Same as for families of consular officers. No exemption if the family head is engaged in any private gainful occupation in Australia. No exemption to families of staff serving at a post headed by an honorary consular officers. (Articles 49, 57, 58(3.) and 71.) |
| . Domestic servants of a consular post. | Exempt from Australian tax on remuneration received for services rendered. No exemption if the person is carrying on any private gainful occupation in Australia or is an Australian citizen or permanently resident here. (Articles 49, 57 and 71.) |
| . Private servants. | No exemption. |
The exemptions will operate for the purposes of assessments based on income derived during the 1972-73 income year and subsequent years of income (clause 5(4.) of the Consular Privileges and Immunities Bill). Because, however, existing exemptions from income tax are, for all practical purposes, the same as those required by the Consular Convention, it is not anticipated that the income tax position of any person already employed in the consular field will be altered by the changeover to the new legislation.
Pay-roll Tax.
Salaries and wages paid to his staff by a consular officer who is not an Australian citizen or permanently resident here will continue to be exempt from pay-roll tax (Article 49). Pay-roll tax is levied by the Commonwealth only in the Australian Capital Territory and the Northern Territory.
Sales Tax.
Consular posts, consular officers together with members of their families and members of the staff of consular posts will continue to be entitled to the following exemptions from sales tax -
- (a)
- a consular post headed by a person who is not an honorary consul - exemption of goods imported for its official use (Article 50); a consular post headed by a person who is not an Australian citizen, not ordinarily resident here and not otherwise engaged in a profession, business or occupation - exemption of excisable goods purchased in Australia and cleared from bond for its official use (clause 8 of the Consular Privileges and Immunities Bill 1972);
- (b)
- a consular officer and, generally, member of his family forming part of his household - exemption of goods imported for personal use (Article 50), and excisable goods purchased in Australia for this purpose and cleared from bond (clause 8 of the Consular Privileges and Immunities Bill 1972);
- (c)
- a member of the administrative and technical staff of a consular post - exemption of goods for his personal use imported at the time of first entry to take up duty (Article 50);
- (d)
- a consular post headed by an honorary consular officer - exemption of certain classes of goods imported for its official use (Article 62), and of some excisable goods purchased in Australia and cleared from bond for its official use (clause 8(2.) of the Consular Privileges and Immunities Bill 1972).
The exemptions specified in (b) and (c) are not available to persons who are Australian citizens or permanently resident here or are otherwise engaged in a profession, business or occupation.
Quantitative restrictions may be imposed by Ministerial direction in any particular case where it is considered that exemption is claimed for goods in excess of the claimant's requirements.
Australian Capital Territory Stamp Duty.
A.C.T. stamp duty will, as now, not be payable on a conveyance of land or premises to be used as consular premises or, where the consular post is not headed by an honorary consul, as the residence of the head of the post (Articles 32 and 60).
The clauses of each of the four taxation Bills are explained below.
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