BILLS DIGEST NO. 68, 2020–21    16 June 2021

Treasury Laws Amendment (2021 Measures No. 2) Bill 2021

Jaan Murphy and Cassie Davis
Law and Bills Digest Section

Date introduced: 17 March 2021

House: House of Representatives

Portfolio: Treasury

Commencement: The first 1 January, 1 April, 1 July or 1 October to occur after Royal Assent.

Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill’s home page, or through the Australian Parliament website.

When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the Federal Register of Legislation website.

All hyperlinks in this Bills Digest are correct as at June 2021.

Contents

Purpose of the Bill

Structure of the Bill

Committee consideration

Senate Standing Committee for the Scrutiny of Bills

Policy position of non-government parties/independents

Position of major interest groups

Financial implications

Table 1: financial impact of offshore banking unit reforms

Statement of Compatibility with Human Rights

Parliamentary Joint Committee on Human Rights

Background: deductible gift recipient endorsement reforms

Why require deductible gift recipient to be registered charities?

Table 2: reporting obligations of registered charities

Table 3: minimum governance standards applicable to registered charities

Current criteria for endorsement of DGR status by the ATO

Non-charity deductible gift recipients

Who determines deductible gift recipient status?

History of the proposed reforms

2017 Treasury discussion paper

Government commitment to reform

Treasury consultation

Key issues and provisions: deductible gift recipients

All general deductible gift recipients required to be registered charities

Certain deductible gift recipient registers retained

Transitional provisions

Transitional period for existing deductible gift recipients

Extended transitional period

Criteria for assessing applications for an extended transitional period

Background: removing concessional taxation offshore banking units

History of offshore banking units in Australia

OECD Forum on Harmful Tax Practices

Recent offshore banking unit reforms

The OECD Forum on Harmful Tax Practices recent concerns

Key issues and provisions: offshore banking units

Current tax concessions for OBUs

Removal of corporate income tax concession

Removal of withholding tax exemption

Closing OBU regime to new entrants

1 Purpose of the Bill

The purpose of the Treasury Laws Amendment (2021 Measures No. 2) Bill 2021 (the Bill) is to:

• amend the Income Tax Assessment Act 1997 (the ITAA 1997) to require a fund, authority or institution to be a registered charity or an Australian government agency, or be operated by a registered charity or an Australian government agency, to be entitled to a deductible gift recipient (DGR) endorsement¹ and

• amend the ITAA 1997 and Income Tax Assessment Act 1936 (the ITAA 1936) to:

– remove the preferential 10 per cent effective concessional tax treatment and the withholding tax exemption² for offshore banking units (OBUs) from 2023–24, making OBUs subject to the relevant corporate income tax (CIT) rate from that time³

– close the OBU regime to any new entrants from the day after Royal Assent by removing the Minister’s ability to make a determination or declare an entity to be an OBU.⁴

2 Structure of the Bill

The Bill has two Schedules. Schedule 1 deals with the reforms to when entities are eligible for DGR status. Schedule 2 deals with the removal of OBU tax concessions. As the Bill deals with two distinctly separate taxation measures, they are examined separately below.

3 Committee consideration

At the time of writing, the Bill had not been referred to any committees for inquiry. In its report on 13 May 2021, the Senate Selection of Bills Committee deferred consideration of the Bill until its next meeting.⁵

Senate Standing Committee for the Scrutiny of Bills

The Senate Standing Committee for the Scrutiny of Bills (the Scrutiny Committee) expressed concern about the transitional rules proposed by the Bill. In brief, those transitional rules allow existing DGRs at least 12 months after the application date to become a registered charity or operated by a registered charity before the amendments in Schedule 1 affect their entitlement to DGR endorsement.⁶ If an entity needs a longer period to satisfy the new requirements they may apply to the Commissioner for an 'extended application date' – that is, a longer period of time in which to become a registered charity or operated by a registered charity.⁷

The Scrutiny Committee expressed concern that the Bill enables the Minister, by legislative instrument, to prescribe the criteria and matters that will determine if a request for an extended application date is approved or not.⁸ The Scrutiny Committee noted:

… allowing criteria and matters for assessing an application for an extended application date to be specified in a legislative instrument provides the minister with a broad discretionary power to determine the scope of which existing DGRs may benefit from an extended application date. It is unclear to the committee why at least high-level guidance in relation to these matters cannot be provided on the face of the bill … a legislative instrument, made by the executive, is not subject to the full range of parliamentary scrutiny inherent in bringing proposed changes in the form of an amending bill.⁹

As such, the Scrutiny Committee requested that the Assistant Treasurer provide advice regarding:

• why it is considered necessary and appropriate to provide the Minister with a broad power to determine the criteria and matters that the Commissioner must be satisfied of and have regard to when assessing a request for an extended application date

• why it is considered necessary and appropriate to leave these matters to delegated legislation and

• whether the bill can be amended to include additional guidance regarding the relevant criteria and matters, and the exercise of the power by the minister, on the face of the primary legislation.¹⁰

In response, the Assistant Treasurer advised:

… I consider it is necessary and appropriate to leave the criteria and matters to delegated legislation, to ensure they can remain flexible and quickly respond to the needs of affected entities … the instrument setting out the prescribed matters and criteria is a legislative instrument that is subject to disallowance. Therefore, Parliament will still have the opportunity to scrutinise any criteria and matters that the Commissioner must be satisfied of and have regard to when assessing a request for an extended application date. Additionally, the Legislation Act 2003 requires the rule-maker to be satisfied that there has been appropriate consultation and that a summary of that consultation is included in the explanatory statement to the instrument … the scope of the power is confined such that it must relate to criteria and matters that are about giving entities more time to comply with the amendments, where reasonable.¹¹

After considering the Minister’s response the Scrutiny Committee noted it:

… remains concerned in relation to the broad discretionary power granted to the minister, particularly given that the power to prescribe criteria in subitem 16(7) is itself discretionary; that is, the minister ‘may’, rather than ‘must’, prescribe criteria.¹²

The Scrutiny Committee requested an addendum to the Explanatory Memorandum containing the information provided by the Assistant Treasurer be tabled in the Parliament as soon as practicable, and otherwise left to the Senate as a whole the appropriateness of the drafting of the discretionary power to prescribe criteria and matters that will determine if a request for an extended application date is approved or not and leaving such matters to delegated legislation.¹³

4 Policy position of non-government parties/independents

No comments on this Bill from non-government parties or independents were apparent at the time of writing this Bills Digest regarding the specific measures proposed by the Bill.

5 Position of major interest groups

At the time of writing, it appears that major interest groups have not commented on the Bill as presented to Parliament. However, Schedule 1 to the Bill is the same in substance as the Exposure Draft of the Schedule 1 amendments released by Treasury, on which submissions were received.¹⁴

In its submission on the Exposure Draft, the Law Council of Australia (LCA) supported the increase in accountability that it considered would result from requiring existing DGRs to become a registered charity or operated by a registered charity, and thereby come under the purview of the Australian Charities and Not-for-profits Commission (ACNC).¹⁵ However, the LCA suggested that the Commissioner should be given a ‘very limited discretion’ to exempt an entity from the amendments and gave some examples of circumstances in which it considered that this might be appropriate, including where a declaration of trust or transfer of assets to a charitable trust will result in significant loss of funds due to tax or duty being imposed as a result of the restructure; or where a trust or unincorporated association needs to apply to court or requires a legislative change in order to make the required changes to be eligible.¹⁶

While considering a more comprehensive reform of the DGR framework is desirable, Philanthropy Australia advised that it welcomed the reforms as announced. However, Philanthropy Australia expressed concern that the amendments did not align with the Government’s initial ‘announcement of 5 December 2017 and the description of the measure within MYEFO 2017–18’, which stated that ‘all non-Government DGRs will be required to be registered charities’. Philanthropy Australia noted that the Exposure Draft legislation (and the Bill) would exempt ancillary funds and specifically listed DGRs from this requirement and called for ‘[t]his inconsistency between the details of the proposal as announced and the practical effects’ of the Bill to be addressed.¹⁷

Arnold Bloch Leibler Lawyers and Advisers ‘acts for a range of philanthropic families and foundations, not-for-profits and charities [and] actively contribute[s] to law reform and policy in relation to charitable tax concessions’.¹⁸ Arnold Bloch Leibler does not support measures to require all DGRs to be registered as charities, unless it is introduced ‘with the complimentary reform that DGR status be extended to all charities that are registered with the ACNC’, as recommended by the Not-For-Profit Sector Tax Concession Working Group in 2013.¹⁹ Arnold Bloch Leibler is also concerned that ‘requiring all DGRs to become registered charities would increase rather than streamline administrative burden’.²⁰ More broadly, Arnold Bloch Leibler considered that the differing policy objectives of charitable status and DGR endorsement have not been adequately taken into account in formulating the legislation:

Charitable status is a recognition of the public benefit of an organisation. DGR endorsement is intended to achieve the related but distinct policy purpose of encouraging philanthropy. The government’s move to require all DGRs to be registered as charities, should be based on a clear and declared policy objective that DGR status should only be afforded to entities that have a charitable purpose. It should then only be done after an analysis of the financial impact such a move would have on philanthropic giving. To our knowledge this has not occurred.²¹

Mills Oakley law firm, which assists clients with governance issues and advises on Australian Taxation Office (ATO) and ACNC endorsement, welcomed the proposed amendments, considering that they ‘will have a positive and effective impact upon the current system of DGR registration’.²²

6 Financial implications

The Explanatory Memorandum notes that the amendments in Schedule 1 dealing with DGR status will have negligible impact on revenue over the forward estimates.²³ In relation to the amendments in Schedule 2 dealing with OBUs, the Explanatory Memorandum notes it will have the following impact (see Table 1) on the underlying cash balance over the forward estimates period:

Table 1: financial impact of offshore banking unit reforms    

Year

2020-21

2021-22

2022-23

2023-34

2024-25

Cost ($m)

0.0

0.0

-30.0

-70.0

-60.0

Source: Explanatory Memorandum, Treasury Laws Amendment (2021 Measures No. 2) Bill 2021, p. 4.

7 Statement of Compatibility with Human Rights

As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government considers that the Bill is compatible.²⁴

Parliamentary Joint Committee on Human Rights

The Parliamentary Joint Committee on Human Rights had no comment in relation to the Bill.²⁵

8 Background: deductible gift recipient endorsement reforms

Deductible gift recipient (DGR) is a special tax status that an organisation can seek from the Commissioner of the ATO. Once an organisation is approved as a DGR it is entitled to receive gifts which are deductible from the donor’s income tax. That is, a taxpayer will be entitled to a tax deduction in respect of donations to a DGR of at least $2.²⁶ DGRs are either:

• endorsed by the ATO and fall within a general DGR category or

• are named as a DGR in the tax Acts (specifically listed).²⁷

Why require deductible gift recipient to be registered charities?

Whilst currently most DGRs are registered charities, some are not.²⁸ Entities that are a registered charity with the ACNC must meet various reporting and governance standards, depending on their size, as set out in Table 2 below.

Table 2: reporting obligations of registered charities

Entity

Annual revenue

Reporting obligations

Small

<$250 000²⁹

Must submit an Annual Information Statement, which includes information on the charity generally such as the identification of activities it undertakes, human resources, and finances.

Medium

>$250 000 but <$1 million³⁰

Annual Information Statement and

Annual Financial Report (which must be reviewed or audited).³¹

Large

>$1 million³²

Annual Information Statement and

Annual Financial Report (which must be audited).³³

Source: as per footnotes in table above.

In addition to the above reporting obligations, registered charities must meet minimum governance standards to be registered and remain registered with the ACNC.³⁴ A summary of those governance standards is set out in Table 3 below.

Table 3: minimum governance standards applicable to registered charities

Standard

Summary

Standard 1: Purposes and not-for-profit nature

Registered charities must be not-for-profit and work towards their charitable purpose. They must be able to demonstrate this and provide information about their purposes to the public.

Standard 2: Accountability to members

Charities that have members must take reasonable steps to be accountable to their members and provide them with adequate opportunity to raise concerns about how the charity is governed.

Standard 3: Compliance with Australian laws

Charities must not commit a serious offence (such as fraud) under any Australian law or breach a law that may result in a penalty of 60 penalty units (currently $13,320³⁵) or more.

Standard 4: Suitability of responsible persons

Charities must take reasonable steps to:

be satisfied that its responsible persons (such as board or committee members or trustees) are not disqualified from managing a corporation under the Corporations Act 2001 or disqualified from being a responsible person of a registered charity by the ACNC Commissioner and

remove any responsible person who does not meet these requirements.

Standard 5: Duties of responsible persons

Charities must take reasonable steps to make sure that responsible persons are subject to, understand and carry out the duties set out in this standard (including to act with reasonable care and diligence; to disclose conflicts of interest; and to ensure that the financial affairs of the charity are managed responsibly).

Standard 6: Maintaining and enhancing public trust and confidence in the Australian not-for-profit sector

A charity must take reasonable steps to become a participating non-government institution if the charity is, or is likely to be, identified as being involved in the abuse of a person either:

in an application for redress made under section 19 of the National Redress Scheme for Institutional Child Sexual Abuse Act 2018 (the Redress Act) or

in information given in response to a request from the National Redress Scheme Operator under the Redress Act.

Source: Australian Charities and Not-for-profits Commission Regulation 2013, Division 45; ACNC, ‘ACNC Governance Standards’, ACNC website, n.d.

In contrast to the above, DGRs that are not a registered charity are not necessarily subject to comparable reporting or governance standards to those noted above.³⁶ This can result in inconsistent governance and reporting requirements for those DGRs.³⁷

The Treasury noted in 2017 that a DGR is ‘subject to minimal governance unless it is an ACNC regulated charity’.³⁸ The Treasury also argued that making charity registration a prerequisite for DGR status will ‘strengthen governance requirements and provide consistent, clear administrative and regulatory requirements for all DGRs’.³⁹

As such, by requiring general DGRs to be a registered charity the Bill aims to improve the consistency of regulation, governance and oversight of DGRs, while also reducing unnecessary compliance costs by imposing a consistent set of governance requirements on DGRs (other than ancillary funds or funds specifically listed in the ITAA 1997).⁴⁰

Current criteria for endorsement of DGR status by the ATO

There are now 51 DGR categories. Eligibility is based on the organisation's purpose or the purpose of a fund, authority or institution it operates.⁴¹

The legal requirements for an organisation or fund to be endorsed as a DGR are set out in Division 30 of the Income Tax Assessment Act 1997 (ITAA 1997). Generally, an organisation must meet the following eligibility criteria to be registered as a DGR:

• it must have an Australian Business Number (ABN)

• it must fall within a DGR category, because either:

– the organisation itself, as a whole, falls within a DGR category⁴² or

– part of the organisation, being either a ‘fund’, ‘authority’ or ‘institution’, falls within a DGR category⁴³

• in the case of most DGR categories – the organisation must also be a registered charity (that is, it is registered with the ACNC)

• the organisation or the part of it that that falls within a DGR category is ‘in Australia’⁴⁴

• it must have acceptable rules for transferring surplus gifts and deductible contributions on winding up or revocation of endorsement

• it must maintain a gift fund if seeking endorsement for a part of it that falls within a general DGR category (unless an exception applies).⁴⁵

Currently most DGRs are registered charities.⁴⁶ There is guidance on the legal meaning of charity, and therefore the meaning of a registered charity for DGR endorsement purposes on the ACNC website.⁴⁷

Non-charity deductible gift recipients

Whilst most entities that are DGRs are registered charities, currently an entity is not in all cases required to be a registered charity to be endorsed by the ATO as a DGR. For example, a body that is a ‘cultural organisation’ or ‘environmental organisation’ does not need to be a charity.⁴⁸

Who determines deductible gift recipient status?

Whilst the ACNC is responsible for assessing whether an organisation is a charity, the ATO ultimately determines DGR status. However, the following DGR categories require an organisation to be endorsed by another Department before the ATO can register it as a DGR:

• Cultural organisations – Department of Infrastructure, Transport, Regional Development and Communications

• Environmental organisations – Department of Agriculture, Water and the Environment

• Harm prevention charities – Department of Social Services

• Overseas aid funds – Department of Foreign Affairs and Trade.⁴⁹

In relation to the above categories, harm prevention charities and overseas aid funds must be a registered charity.⁵⁰ No such requirement is currently imposed on cultural or environmental organisations seeking DGR endorsement by the ATO.⁵¹

History of the proposed reforms

An intention to link eligibility for DGR endorsement to being a registered charity was flagged in 2012 with the passage of the Australian Charities and Not-for-profits Commission Act 2012 (ACNC Act) (which established the ACNC). The Explanatory Memorandum to the Australian Charities and Not-for-profits Commission Bill 2012 noted:

In the long term, the role of the ACNC will expand to include responsibility for the regulation of all NFP entities which access tax concessions or other Australian government benefits, regardless of their legal form.⁵²

A key driver of the establishment of the ACNC was to improve the governance, accountability and transparency of not-for-profit (NFP) entities (and therefore, by implication, NFP entities with DGR status).⁵³

2017 Treasury discussion paper

The Treasury released the Tax Deductible Gift Recipient Reform Opportunities Discussion Paper on 15 June 2017 for consideration and comment. The Discussion Paper noted:

Around eight per cent of the current stock of 28,000 DGRs are not registered charities or government entities. These organisations are not necessarily subject to robust reporting and governance standards.

The four DGR registers, which are not administered by the ATO, have separate reporting requirements. Not all organisations on the environmental and cultural registers are charities, so organisations on the same register can have different reporting requirements and governance standards. This also means that there are organisations which report both to the register and the ACNC.⁵⁴

The Discussion Paper proposed that all DGRs (other than government entities) be required to be registered as a charity with the ACNC.⁵⁵

The Discussion Paper also proposed transferring the assessment and registration of the four DGR registers, that is, cultural organisations, environmental organisations, harm prevention charities and overseas aid funds to the ATO.⁵⁶

Government commitment to reform

On 5 December 2017 (then) Minister for Revenue and Financial Service, Kelly O’Dwyer announced that the Government would reform the administration and oversight of DGRs.⁵⁷ Reforms announced relevant to this Digest included:

• all non-government DGRs will be automatically registered as a charity with the ACNC from 1 July 2019

• a 12-month transitional period to assist non-charity DGRs with compliance

• the integration of the DGR registers with the ACNC charity register

• retaining the Commissioner of Taxation’s discretion to exempt organisations with DGR status from the requirement to register as a charity in limited circumstances and

• the abolition of certain public fund requirements.⁵⁸

Treasury consultation

In August 2018 the Treasury released a consultation paper regarding the proposed reforms announced by the Government in December 2017.⁵⁹ This was followed by the release of Exposure Draft legislation and explanatory materials in October 2020.⁶⁰

9 Key issues and provisions: deductible gift recipients

Currently, the majority of the general DGR categories in Subdivision 30-B of the ITAA 1997 require that the fund, authority or institution be a registered charity, an Australian Government agency or operated by a registered charity or an Australian Government agency to be eligible to be endorsed as a DGR. However, there are 11 general DGR categories that do not impose those requirements, namely:

• Health: public fund for hospitals (item 1.1.3 in section 30-20) and public fund for public ambulance services (item 1.1.8 in section 30-20)

• Education: public fund for religious instruction in government schools (item 2.1.8 in section 30-25), Roman Catholic public fund for religious instruction in government schools (item 2.1.9 in section 30-25), school building fund (item 2.1.10 in section 30-25) and public fund for rural school hostel building (item 2.1.11 in section 30-25)

• Research: approved research institute (item 3.1.1 in section 30-40)

• Welfare and rights: public fund for persons in necessitous circumstances (item 4.1.3 in section 30-45)

• Environment: public fund on the Register of Environmental Organisations (item 6.1.1 in section 30-55)

• Cultural organisations: public fund on the Register of Cultural Organisations (item 12.1.1 in section 30-100) and

• Fire and emergency services: fire and emergency services fund (item 12A.1.3 in section 30-102).

All general deductible gift recipients required to be registered charities

Part 1 of Schedule 1 of the Bill amends the ITAA 1997 for those 11 general DGR categories noted above so that a fund, authority or institution seeking to rely (or relying) on any of these categories for DGR endorsement must be:

• a registered charity

• an Australian government agency or

• operated by a registered charity or an Australian government agency.

Items 10 and 11 also amend the definitions of environmental organisation and cultural organisation such that they must be a registered charity or an Australian Government agency.

Importantly, charity registration is not required for Australian Government agencies as government entities are excluded from being a charity under the Charities Act 2013.⁶¹

Certain deductible gift recipient registers retained

As noted above, the 2017 Discussion Paper proposed transferring the assessment and registration of the four DGR registers relating to cultural organisations, environmental organisations, harm prevention charities and overseas aid funds to the ATO.⁶²

The Explanatory Memorandum notes that in relation to Schedule 1 the Bill ‘partially implements’ the proposed reforms discussed above.⁶³ In that regard, the Bill does not transfer the four DGR registers to the ATO. They will remain under the joint administration of the ATO and the relevant departments as discussed above.⁶⁴ However, the Department of Foreign Affairs and Trade notes that ‘the [Overseas Aid Gift Deduction Scheme] OAGDS program is to be transferred to the ACNC and the ATO in the future’.⁶⁵

This suggests that further reforms related to the DGR registers may be likely.

Transitional provisions

The transitional rules in Part 2 of Schedule 1 apply to existing DGRs that are not a registered charity or operated by a registered charity on the application date (three months after the day the Bill receives Royal Assent).⁶⁶ In effect, they give existing DGRs and existing DGR applicants an additional 12 months (and in some cases, four years) to comply with the requirement to become a registered charity.⁶⁷

Transitional period for existing deductible gift recipients

Item 14 provides that the requirement to be a registered charity or operated by a registered charity will apply to existing DGRs on the earlier of the following:

• when the DGR becomes a registered charity or operated by a registered charity or

• 12 months after the application date.⁶⁸

Extended transitional period

An existing DGR or an entity that has applied for DGR status but has not had its application determined (DGR applicant) can apply on an approved form to the Commissioner for an extended application date.⁶⁹ As the extended application date is three years after the transitional application date, if an application is approved by the Commissioner, an existing DGR (or DGR applicant) that is not a registered charity or operated by a registered charity will have four years to either become a registered charity or operated by a registered charity.⁷⁰

After considering the application and any criteria prescribed by the Minister, the Commissioner can issue a written determination providing the existing DGR or DGR applicant an extended application date (that is, an additional three years in which to become a registered charity or operated by a registered charity).⁷¹ Such a determination is not a legislative instrument and is therefore not disallowable.⁷² Importantly, the Commissioner cannot grant an extended application date:

• in the absence of an application on an approved form or

• where the application is made after the transitional application date.⁷³

Where an existing DGR or DGR applicant has an application for an extended application date refused by the Commissioner, it can object to the decision.⁷⁴ This allows for both internal review by the Commissioner, merit review by the Administrative Appeals Tribunal, and a potential appeal to the Federal Court of Australia.⁷⁵

Criteria for assessing applications for an extended transitional period

The Minister can, by legislative instrument, prescribe the criteria and matters that the Commissioner must be satisfied of and have regard to when assessing an application for an extended application date by an existing DGR. As such rules are legislative instruments, they will be subject to parliamentary scrutiny and potential disallowance. The Government argues:

This flexibility is necessary to ensure the relevant criteria and matters remain fit for purpose, as it will allow the Government to respond quickly to evolving industry practices and needs as required. Any such legislative instrument would be subject to disallowance and parliamentary scrutiny.⁷⁶

Further, in response to concerns raised by the Scrutiny Committee, the Minister noted:

The entities that are likely to require an extended application date are generally those with complex structures and arrangements. However, it may not be immediately clear to some of these entities whether they need an extended application date, particularly given the relatively long transitional period … and the nature of the entities (which are not-for-profit organisations).

Therefore, I consider it is necessary and appropriate to leave the criteria and matters to delegated legislation, to ensure they can remain flexible and quickly respond to the needs of affected entities.⁷⁷

As noted above, the Scrutiny Committee expressed concern about the power of the Minister to prescribe, by legislative instrument, the criteria and matters that will determine if a request for an extended application date is approved or not. However, the Committee left to the Senate as a whole consideration of the appropriateness of the drafting of the discretionary power to prescribe criteria and matters that will determine if a request for an extended application date is approved or not, and leaving such matters to delegated legislation.⁷⁸

10 Background: removing concessional taxation offshore banking units

Offshore banking involves the provision of banking services to non-resident individual or entities.⁷⁹ An offshore banking unit (OBU) is a separate branch of an Australian licenced bank, foreign exchange dealer or foreign bank that conducts offshore banking activities.⁸⁰ The OBU regime was originally introduced to assist Australian financial services entities to compete with financial services providers located in low tax jurisdictions in the Asia-Pacific region. Currently, OBUs are entitled to interest withholding tax exemption and CIT concessions.⁸¹

History of offshore banking units in Australia

In 1979, a committee was established to ‘inquire into and report on the structure and methods of operation of the Australian financial system’ including ‘banks and non-bank financial institutions, including in relation to foreign exchange’.⁸² It was noted that, since the last inquiry into the Australian financial system in 1936, ‘the international economic environment [had] altered greatly, and world financial markets [had become] more closely integrated.’⁸³

The Australian Financial System: Final Report of the Committee of Inquiry (the Campbell Report) commented on the possibility of establishing an offshore banking market in Australia, involving domestic banking institutions and local units of foreign banks referred to as ‘authorised offshore banking units’.⁸⁴ The Campbell Committee advised that ‘a ‘formal offshore market' would be facilitated by some relaxation of the regulations around currency deposits, noting that the current regulations prevented offshore banking units from accepting foreign currency deposits.⁸⁵

The Report of the Committee Established by the Premier of New South Wales to Report on the Steps Necessary to Establish Offshore Banking Activity in Australia with Particular Reference to Sydney (Whitlam Report) was released in 1984. The Whitlam Report recommended the ‘establishment of offshore banking units and new offshore banks as the vehicle for introducing foreign banks to offshore banking activities’⁸⁶ and federal tax exemptions.⁸⁷

Consistent with those recommendations, changes to the Income Tax Assessment Act 1936 (the 1936 Act) to enable withholding tax exemptions for offshore banking units were introduced to Parliament on 9 December 1987, via the Taxation Laws Amendment Bill (No. 5) 1987 (enacted as the Taxation Laws Amendment Act 1988).⁸⁸ Amid the recession in 1992 and industry requests for concessions, Prime Minister Paul Keating announced that:

… to help establish Offshore Banking Units (OBUs) in Australia … the Government has decided that the taxable income derived from pure offshore banking transactions by an authorised offshore banking unit in Australia will be taxed at the reduced rate of 10 per cent.⁸⁹

This change was implemented via the Taxation Laws Amendment Act (No. 4) 1992, introduced on 25 June 1992.

OECD Forum on Harmful Tax Practices

In 1998, the Organisation for Economic Co-operation and Development (OECD) produced the Harmful Tax Competition: An Emerging Global Issue report and identified ‘ring fencing’ practices as harmful. The OECD advised:

There are good reasons for the international community to be concerned where regimes are partially or fully isolated from the domestic economy. Since the regime’s “ring fencing” effectively protects the sponsoring country from the harmful effects of its own incentive regime, that regime will have an adverse impact only on foreign tax bases. Thus, the country offering the regime may bear little or none of the financial burden of its own preferential tax legislation. Similarly, taxpayers within the regime may benefit from the infrastructure of the country providing the preferential regime without bearing the cost incurred to provide that infrastructure. Ring fencing may take several forms.⁹⁰

In the same year, the OECD established the Forum on Harmful Tax Practices (FHTP). The FHTP conducts reviews of preferential tax regimes in order to determine whether they could be harmful to the tax base of other jurisdictions.⁹¹ In 2000 the FHTP identified OBUs in Australia as a ‘potentially harmful’ preferential tax regime and noted that:

… a preferential tax regime is identified as potentially harmful if it has features that suggest that the regime has the potential to constitute a harmful tax practice, even though there has not yet been an overall assessment of all the relevant factors to determine whether regimes are actually harmful.⁹²

In 2004, the FHTP advised that it had determined Australia’s OBU regime, and the similar Canadian International Banking Centre regime, to be not harmful. It reported:

The Australian Offshore Banking Unit regime and the Canadian International Banking Centre regime caused some concerns under the ring fencing criterion. In its overall assessment, the Committee determined that these potentially harmful regimes were nevertheless not actually harmful on the basis that they do not appear to have created actual harmful effects. This determination was made on the specific facts relating to the current limited nature and reduced scope and size of the regimes. Of crucial importance to this determination was the fact that the relevant countries apply very high standards regarding transparency and exchange of information for tax purposes.⁹³

After the Addressing Base Erosion and Profit Shifting report was released in February 2013, OECD and G20 countries adopted an action plan to address base erosion and profit shifting (BEPS). The plan ‘identified 15 actions along three key pillars: introducing coherence in the domestic rules that affect cross-border activities, reinforcing substance requirements in the existing international standards, and improving transparency as well as certainty.’⁹⁴

Importantly, Action 5 of the BEPS initiative focused on harmful tax practices, including peer review and assessment of preferential tax regimes that facilitate base erosion and profit shifting, and therefore have the potential to unfairly impact the tax base of other jurisdictions, including offshore banking.⁹⁵

Recent offshore banking unit reforms

In 2013, the Gillard Government announced reforms to the corporate tax system, including ‘closing loopholes in the Offshore Banking Unit regime to prevent banks shifting profits from domestic banking activities to the Offshore Banking Unit (while continuing to allow genuine offshore banking activities)’. It noted ‘[t]he Commissioner of Taxation has identified a range of aggressive tax minimisation strategies, currently being exploited to take advantage of design flaws, vulnerabilities and unexpected interactions in Australia's corporate tax laws.’⁹⁶

It was announced by the Abbott Government in 2014 that ‘following additional consultation with stakeholders and the Australian Taxation Office’, the start date of these measures relating to OBUs would be deferred.⁹⁷

In 2015, the Treasury conducted a consultation process on reforms to offshore banking units and released proposed amendments to the Income Tax Assessment Act 1997 through the publication of an Exposure Draft on 12 March 2015.⁹⁸ The Bill moving these amendments was introduced on 27 May 2015 and the resulting Tax and Superannuation Laws Amendment (2015 Measures No. 1) Act 2015 received Royal Assent on 25 June 2015.⁹⁹ The amendments were partly based on the recommendations of a 2009 report, Australia as a Financial Centre: Building on our Strengths — Report by the Australian Financial Centre Forum (commonly known as the Johnson Report), which found that ‘the combined effects of the current taxing arrangements were that Australia was unable to take advantage of some potential financial transactions, investment flows and new business opportunities’.¹⁰⁰

The OECD Forum on Harmful Tax Practices recent concerns

On 26 October 2018, Treasurer Josh Frydenberg announced that the FHTP had ‘raised concerns during a review of [the OBU] regime, including the concessional tax rate and the ring-fenced nature of the regime’, meaning that the FHTP was concerned that Australia benefitted or suffered no adverse effects from a regime that had the potential to negatively impact other jurisdictions’ tax base. In response, the Government ‘committed to amend the regime to address these concerns with legislation to be introduced as soon as practicable and following consultation.’¹⁰¹

The concerns raised by the OECD do not appear to have been made publicly available. It reported in February 2018 that Canada had abolished its International Banking Centre regime,¹⁰² and the Harmful Tax Practices – 2018 Progress Report on Preferential Regimes report identified Australia’s offshore banking unit regime as being ‘in the process of being amended’ with ‘potentially harmful features [to be] addressed’.¹⁰³

In a submission to the Select Committee on Australia as a Technology and Financial Centre, the Australian Financial Markets Association (AFMA) noted that there is ‘no clarity from the OECD as to the specific amendments to the regime that would be appropriate from an OECD perspective.’¹⁰⁴

11 Key issues and provisions: offshore banking units

Schedule 2 of the Bill amends the 1936 Act to:

• remove the concessional tax treatment for OBUs

• remove the interest withholding tax exemption and

• close the regime to new entrants.

Current tax concessions for OBUs

The 1936 Act currently provides that income from eligible offshore banking activities (as defined) is effectively subject to a tax rate of 10 per cent, rather than the general corporate income tax (CIT) rate of 30 per cent.¹⁰⁵ The 1936 Act also provides exemptions to withholding tax related to interest paid.¹⁰⁶ The Bill will remove those concession and exemptions.

Removal of corporate income tax concession

The Bill will remove the current concessional CIT treatment for OBUs in respect of offshore banking activities from the 2023–24 income year onwards.¹⁰⁷ This means the taxable income of an OBU on its offshore banking activities will be subject to the relevant CIT rate.

Removal of withholding tax exemption

The Bill will remove the withholding tax exemption for interest payments (including interest consisting of gold paid) paid on or after 1 January 2024.¹⁰⁸ This means for interest paid on or after 1 January 2024, OBUs will be subject to withholding tax on eligible income (although tax treaties often operate so as to reduce or eliminate withholding tax on such income).

Closing OBU regime to new entrants

Currently section 128AE of the 1936 Act allows the Minister to make a declaration or determination that a person or company is an OBU. The Explanatory Memorandum notes:

Australia’s OBU regime has been effectively closed since October 2018. No new OBU applications have been approved since that time.¹⁰⁹

Item 14 provides that the Minister must not make a declaration or determination that a person or company is an OBU after the day the Bill receives Royal Assent. The effect of this is that any outstanding applications made to the Minister before the amendments apply are not able to be approved from that time and will, in effect, lapse. The Explanatory Memorandum notes:

This is consistent with the intention that the OBU regime be closed to new entrants, and that the applicable grandfathering arrangement be limited to existing OBUs. To ensure that Australia addresses the OECD Forum for Harmful Tax Practices’ concerns about the OBU regime, the Government does not intend that any applications be granted by the Minister before the amendments apply.¹¹⁰

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Notes

[←1]

.    DGRs are organisations which can receive donations that are tax deductible. The practical effect of this is that donors to that organisation can deduct the amount of their donation from their taxable income when they lodge their tax return.

[←2]

.    The interest withholding tax exemption is for 'offshore banking' activities, which generally involve offshore persons, for example, non-residents, foreign branches or other OBUs.

[←3]

.    This effectively provides a two-year grandfathering for existing OBUs. This measure is intended to address the concerns raised by the OECD in 2018 that Australia’s Offshore Banking Units concessional tax rate and its ‘ring-fenced’ nature (that is, essentially, its limited access to domestic markets) was a ‘harmful preferential tax regime’. This is discussed further below.

[←4]

.    The Government has stated that any pending applications for OBUs will not be approved, as discussed later in this Digest.

[←5]

.    Senate Standing Committee for the Selection of Bills, Report, 5, 2021, The Senate, Canberra, 13 May 2021, [p. 4].

[←6]

.    The ‘application date’ is three months after Royal Assent: item 12 of Schedule 1 to the Bill.

[←7]

.    Schedule 1, Part 2, subitem 16(3).

[←8]

.    Schedule 1, Part 2, subitem 16(7); Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 6, 2021, 21 April 2021, pp. 34–35.

[←9]

.    Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 6, 2021, 21 April 2021, p. 35.

[←10]

.    Ibid.

[←11]

.    Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 7, 2021, 12 May 2021, pp. 28–29.

[←12]

.    Ibid., p. 29.

[←13]

.    Ibid., pp. 29–30.

[←14]

.    Treasury Laws Amendment (Measures For a Later Sitting) Bill 2020: Requiring all DGRs to be registered charities: Exposure Draft; The Treasury, ‘Requiring Deductible Gift Recipients (DGRs) to register as charities’, Treasury website, n.d.

[←15]

.    Law Council of Australia (LCA), Submission to the Treasury consultation: Requiring Deductible Gift Recipients (DGRs) to Register as Charities, p. 1.

[←16]

.    Ibid., pp. 1–2.

[←17]

.    Philanthropy Australia, Submission to the Treasury consultation: Requiring Deductible Gift Recipients (DGRs) to Register as Charities.

[←18]

.    Arnold Bloch Leibler, Submission to the Treasury consultation: Requiring Deductible Gift Recipients (DGRs) to Register as Charities, p. 1.

[←19]

.    Ibid.; Not-For-Profit Sector Tax Concession Working Group, Fairer, simpler and more effective tax concessions for the not-for-profit sector: final report, Recommendation 6.1, Treasury, Canberra, May 2013, p. 26.

[←20]

.    Arnold Bloch Leibler, Submission, op. cit., p. 1.

[←21]

.    Ibid., p. 2.

[←22]

.    Mills Oakley, Submission to the Treasury consultation: Requiring Deductible Gift Recipients (DGRs) to Register as Charities, pp. 1–2.

[←23]

.    Explanatory Memorandum, Treasury Laws Amendment (2021 Measures No. 2) Bill 2021, p. 3.

[←24]

.    The Statement of Compatibility with Human Rights can be found at pages 17–18 of the Explanatory Memorandum to the Bill.

[←25]

.    Parliamentary Joint Committee on Human Rights, Human rights scrutiny report, 4, 2021, 31 March 2021, p. 6.

[←26]

.    Income Tax Assessment Act 1997 (ITAA 1997), sections 8-5 and 30-15. Section 30-15 imposes specific rules about the deductibility of particular gifts and contributions; Australian Taxation Office (ATO), ‘Is my organisation eligible for DGR endorsement?’, ATO website, last modified 19 June 2017.

[←27]

.    ATO, ‘Is my organisation eligible for DGR endorsement?’, op. cit.

[←28]

.    The Treasury, Tax deductible gift recipient reform opportunities, Discussion paper, Treasury, Canberra, 15 June 2017, p. 1: ‘There are around 28,000 organisations endorsed as DGRs , of which around 18 per cent are not registered charities – under 10 per cent are government entities (and therefore not eligible for charity registration) and over 8 per cent could seek charity registration with the ACNC.’

[←29]

.    Australian Charities and Not-for-profits Commission Act 2012 (ACNC Act), section 205-25; ACNC, ‘Reporting annually to the ACNC’, ACNC website, n.d.

[←30]

.    ACNC Act, section 205-25; ACNC, ‘Reporting annually to the ACNC’, op. cit.

[←31]

.    ACNC Act, sections 60-10 and 60-20.

[←32]

.    ACNC Act, section 205-25; ACNC, ‘Reporting annually to the ACNC’, op. cit.

[←33]

.    ACNC Act sections 60-10 and 60-25.

[←34]

.    ACNC Act, Division 45 generally.

[←35]

.    Crimes Act 1914 (Cth); Notice of Indexation of the Penalty Unit Amount, 14 May 2020.

[←36]

.    Treasury, Tax deductible gift recipient reform opportunities, op. cit., pp. 3-6, 10.

[←37]

.    Explanatory Memorandum, Treasury Laws Amendment (2021 Measures No. 2) Bill 2021, p. 6.

[←38]

.    The Treasury, Tax deductible gift recipient reform opportunities, op. cit., pp. 5 and 10.

[←39]

.    The Treasury, Deductible Gift Recipient (DGR) reforms, Consultation paper, Treasury, Canberra, August 2018, p. 2.

[←40]

.    Explanatory Memorandum, Treasury Laws Amendment (2021 Measures No. 2) Bill 2021, p. 6.

[←41]

.    ATO, ‘Types of DGRs’, ATO website, 3 November 2020; Treasury, Tax deductible gift recipient reform opportunities, op. cit., p. 2.

[←42]

.    If an organisation as a whole falls within a DGR category, donors may claim gifts and deductible contributions to the entity.

[←43]

.    The ATO notes that: ‘If a fund is legally owned by an organisation or an authority or institution within an organisation, the organisation can be endorsed, but it is endorsed only for the particular fund, authority or institution.     Only gifts and deductible contributions to the fund, authority or institution can be deductible. If an organisation operates more than one fund, authority or institution, it will need a separate endorsement for each one.’ : ATO, ‘How to determine if you are eligible for DGR endorsement’, ATO website, 17 December 2018.

[←44]

.    ATO, ‘Meeting the 'In Australia' condition’, ATO website, 17 December 2018.

[←45]

.    ITAA 1997, Subdivision 30-B generally; sections 30-15 and 30-125, section 995-1, defines a ‘registered charity’ by reference to the term ‘charity’ in column 1 of item 1 of the table in subsection 25-5(5) of the ACNC Act; see also: ATO, ‘Application for endorsement as a deductible gift recipient’, ATO website, 2 August 2017; ATO, ‘Endorsement for the operation of a fund, authority or institution’, ATO website, 17 December 2018.

[←46]

.    Treasury, Tax deductible gift recipient reform opportunities, op. cit., p. 1: ‘There are around 28,000 organisations endorsed as DGRs, of which around 18 per cent are not registered charities – under 10 per cent are government entities (and therefore not eligible for charity registration) and over 8 per cent could seek charity registration with the ACNC.’

[←47]

.    This is because section 995-1 of the ITAA 1997 defines a ‘registered charity’ by reference to the term ‘charity’ in column 1 of item 1 of the table in subsection 25-5(5) of the ACNC Act.

[←48]

.    ITAA 1997, subdivisions 30-E (environmental organisations) and 30-F (cultural organisations).

[←49]

.    ITAA 1997, subdivisions 30-E (environmental organisations), 30-EA (harm prevention charities), 30-F (cultural organisations) and subsection 30-80(1), table item 9.1.2; section 30-85.

[←50]

.    ITAA 1997, section 30-288 (harm prevention charities) and 30-80, 30-85 and 30-86 (overseas aid funds).

[←51]

.    ITAA 1997, sections 30-260 to 30-275 (environmental organisations) and 30-300 (cultural organisations).

[←52]

.    Explanatory Memorandum, Australian Charities and Not-for-profits Commission Bill 2012, p. 13.

[←53]

.    Ibid., pp. 4, 8–9, 12–13, 18 and 31.

[←54]

.    Treasury, Tax deductible gift recipient reform opportunities, op. cit., p. 5.

[←55]

.    Ibid.

[←56]

.    Ibid., p. 8.

[←57]

.    K O’Dwyer (Minister for Revenue and Financial Services), Reforming administration of tax deductible gift recipients, media release, 5 December 2017.

[←58]

.    Ibid.

[←59]

.    Treasury, Deductible Gift Recipient (DGR) reforms, op. cit.

[←60]

.    The Treasury, ‘Requiring Deductible Gift Recipients (DGRs) to register as charities’, Treasury website, n.d.

[←61]

.    Charities Act 2013, section 5, definition of a charity.

[←62]

.    Treasury, Tax deductible gift recipient reform opportunities, op. cit., p. 8.

[←63]

.    Explanatory Memorandum, Treasury Laws Amendment (2021 Measures No. 2) Bill 2021, p. 3.

[←64]

.    This is because the Bill makes no amendments to the sections which create the relevant registers, namely sections 30-80, 30-85 and 30-86 (overseas aid funds), subsection 30-55(1), table item 6.1.1, sections 30-255 and 30-280 (environmental organisations), subsection 30-45(1), table item 4.1.4, sections 30-287, 30-289B (harm prevention charities), subsection 30-100(1), table item 12.1.1, sections 30-295, 300-305 (cultural organisations) and other related provisions (for example, subsection 30-5(5)).

[←65]

.    Department of Foreign Affairs and Trade (DFAT), ‘Tax deductibility’, DFAT website, n.d.

[←66]

.    Part 2, Schedule 1, items 12, 13 and 14.

[←67]

.    Part 2, Schedule 1, items 12 to 15.

[←68]

.    Part 2, Schedule 1, item 14.

[←69]

.    Part 2, Schedule 1, items 12, 14(2)(ii); 15(2)(iii), 16(3) to (5).

[←70]

.    Part 2, Schedule 1, items 12, 16(1).

[←71]

.    Part 2, Schedule 1, items 16(1) and (6) to (7).

[←72]

.    Part 2, Schedule 1, item 16(2).

[←73]

.    Part 2, Schedule 1, items 16(2) and (4).

[←74]

.    Part 2, Schedule 1, item 16(8).

[←75]

.    Taxation Administration Act 1953, Part IVC generally.

[←76]

.    Explanatory Memorandum, Treasury Laws Amendment (2021 Measures No. 2) Bill 2021, p. 11.

[←77]

.    Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 7, 2021, The Senate, Canberra, 12 May 2021, p. 28.

[←78]

.    Schedule 1, Part 2, subitem 16(7); Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 6, 2021, op. cit., pp. 34-35; Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 7, 2021, op. cit., pp. 29-30.

[←79]

.    K Sadiq, ‘Bring OBUs onshore: assessing the concessions’, Journal of Australian Taxation, 1(2), September 1998, p. 124.

[←80]

.    Section 128AE of the Income Tax Assessment Act 1936 (Cth) (the 1936 Act) sets out how an OBU is defined and the circumstances under which the Treasurer can determine that a company is an OBU. Section 121D of the 1936 Act defines what constitutes offshore banking activity.

[←81]

.    Explanatory Memorandum, Treasury Laws Amendment (2021 Measures No. 2) Bill 2021, p. 13.

[←82]

.    Committee of Inquiry into the Australian Financial System, Australian financial system: final report of the Committee of Inquiry, (Campbell Report), Parl. Paper 208/1981, Canberra, 1981, p. xxiii.

[←83]

.    Ibid., p. xxv.

[←84]

.    Ibid., p. 152.

[←85]

.    Ibid.

[←86]

.    New South Wales, Offshore Banking Committee, Report of the committee established by the Premier of New South Wales to report on the steps necessary to establish offshore banking activity in Australia with particular reference to Sydney, (Whitlam Report), Sydney, Government Printer, 1984, p. ii.

[←87]

.    Ibid., p. iii.

[←88]

.    Taxation Laws Amendment Bill (No. 5) 1987; Explanatory Memorandum, Taxation Laws Amendment Bill (No. 5) 1987.

[←89]

.    P Keating, One Nation, Statement by the Prime Minister the Honourable P.J. Keating, MP, Australian Government Publishing Service, Canberra, 26 February 1992, p. 77.

[←90]

.    The Organisation for Economic Co-operation and Development (OECD), Harmful tax competition: an emerging global issue, OECD, Paris, 1998, p. 26.

[←91]

.    OECD, ‘Action 5: Harmful tax practices’, OECD website, n.d.

[←92]

.    OECD, Towards global tax co-operation: report to the 2000 Ministerial Council meeting and recommendations by the Committee on Fiscal Affairs: progress in identifying and eliminating harmful tax practices, OECD, Paris, 2000, p. 12.

[←93]

.    OECD, The OECD’s project on harmful tax practices: the 2004 progress report, Centre for Tax Policy and Administration, Paris, 2004, p. 10.

[←94]

.    OECD, Harmful tax practices – 2017 progress report on preferential regimes, OECD Publishing, Paris, 2017, p. 3.

[←95]

.    OECD, ‘Action 5: Harmful tax practices’, OECD website, n.d.; OECD Harmful tax practices – peer review results. Inclusive framework on BEPS: Action 5, OECD, November 2020.

[←96]

    W Swan (Treasurer) and D Bradbury (Assistant Treasurer), Protecting the corporate tax base from erosion and loopholes, media release, 14 May 2013.

[←97]

    M Cormann (Minister for Finance), More progress in restoring integrity in the tax system, media release, 13 May 2014.

[←98]

    Treasury, ‘Reforms to Offshore Banking Units’, Treasury website, n.d.

[←99]

.    Parliament of Australia, ‘Tax and Superannuation Laws Amendment (2015 Measures No. 1) Bill 2015 homepage’, Australian Parliament website.

[←100]

    Explanatory Memorandum, Tax and Superannuation Laws Amendment (2015 Measures No. 1) Bill 2015, p. 108; Australian Financial Centre Forum, Australia as a financial centre: building on our strengths - report by the Australian Financial Centre Forum, The Forum, Canberra, November 2009.

[←101]

.    J Frydenberg (Treasurer), Amending Australia’s Offshore Banking Unit Regime, media release, 26 October 2018.

[←102]

.    OECD, ‘OECD announces further developments in BEPS implementation’, OECD website.

[←103]

.    OECD, Harmful Tax Practices - 2018 Progress Report on Preferential Regimes: Inclusive Framework on BEPS: Action 5, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, Paris, 2018, p. 26.

[←104]

    Australian Financial Markets Association (AFMA), Supplementary submission to the Senate Select Committee on Australia as a Technology and Financial Centre, 22 December 2020, p. 3 (Supplementary submission no. 47.1).     

[←105]

.    Income Tax Assessment Act 1936 (the 1936 Act), sections 121A and 121EG; Explanatory Memorandum, Treasury Laws Amendment (2021 Measures No. 2) Bill 2021, p. 13.

[←106]

.    1936 Act, section 128GB.

[←107]

.    Schedule 2, items 2 to 12. Item 13 establishes that the removal of the concessions will apply from the 2023-24 income year onwards.

[←108]

.    Schedule 2, item 15.

[←109]

.    Explanatory Memorandum, Treasury Laws Amendment (2021 Measures No. 2) Bill 2021, p. 15.

[←110]

.    Ibid., p. 16.