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International Tax
Agreements Amendment Bill 2012
Introduced into the
House of Representatives on 29 November 2012
Portfolio: Treasury
Committee view
1.1
The committee notes the relevance of the rights to equal protection and
non-discrimination and the right to privacy to this bill and notes these rights
should have been considered in the statement of compatibility.
1.2
The committee seeks further information as to how obligations to provide
information under tax agreements might affect the right to privacy and what
remedies, if any, are available if that right is infringed, before it forms a
view on the compatibility of the bill with human rights.
Overview
1.3
The bill is intended to give effect to three international taxation
agreements with India, the Marshall Islands and Mauritius.[1]
The agreements relate to the issue of double taxation arrangements, cooperation
between tax authorities of the countries involved and other matters. The bill
proposes amending the International Tax Agreements Act 1953 to give the
three agreements the force of law in Australia by adding them to the list of
agreements currently contained in that Act.
Compatibility with human rights
1.4
The bill is accompanied by a self-contained statement of compatibility
which outlines the purpose of the bill, states that the bill ‘does not engage
any of the applicable rights or freedoms’ and concludes that the bill ‘is
compatible with human rights as it does not raise any human rights issues.’[2]
Equal protection of the law and
non-discrimination
1.5
The international agreements which the bill seeks to give effect to contain
a number of provisions affecting the tax liability of different groups of
people, in particular ‘nationals’ of the contracting States. For example, the
Indian Protocol inserts a new article 24A in the Australian-India double tax
agreement of 1991,[3]
guaranteeing non-discrimination in the taxation of Australian and Indian
nationals as defined in the Protocol.
1.6
The agreements also provide for relief from dual taxation of certain
income of nationals of Australia and the contracting States. In so doing, they
draw distinctions between groups of people on the ground of their ‘status’, as
that term is understood under human rights law, and would therefore engage
rights such as the right to equal protection of the law and non-discrimination
on the ground of ‘other status’ contained in article 26 of the International
Covenant on Civil and Political Rights (ICCPR). Such distinctions are common in
taxation laws. To the extent that they are based on objective criteria and have
a reasonable justification (proportionate pursuit of a legitimate objective),
they will be consistent with the guarantees of equality and
non-discrimination.
Right not to be subject to unlawful
or arbitrary interference with one’s privacy or correspondence
1.7
The three agreements provide for cooperation between the tax authorities
of Australia and their foreign counterparts, in particular in relation to the
provision of information requested by the other party. For example, the
explanatory memorandum notes in relation to the Indian Protocol:
The Indian Protocol provides for enhanced exchange of
information, including bank information, between the two taxation authorities.
It authorises and requires Australia to exchange information where the
information relates to federal taxes [Article 26 of the Indian Agreement].
1.8
These provisions engage to right of persons in Australia to privacy
insofar as they may involve the obligation to provide to the tax authorities of
another country personal information. The right to privacy in Article 17 of the
ICCPR is thus engaged by the provisions of the agreements which provide for
this. The statement of compatibility makes no reference to the possible impact
of the bill on the enjoyment of this right and whether the bill might lead to
the erosion of the rights to confidentiality enjoyed under Australian law.
1.9
Some indication of the impact of the bill and the protection of personal
tax information under the agreements is provided in other passages of the explanatory
memorandum, which also refer to safeguards in the agreements that may provide
adequate protection against the unlawful or arbitrary interference with a
person’s privacy. For example, the explanatory memorandum notes that the agreement
with the Marshall Islands contains safeguards to protect taxpayers’ rights. For
example:
- confidentiality rules to ensure that information exchanged is only
disclosed to authorised recipients; and
- limitations to ensure that the competent authorities do not exceed
domestic laws and administrative procedures in the course of obtaining and
supplying information.[4]
1.10
The explanatory memorandum also refers in similar terms to the
corresponding provision in the agreement with Mauritius.[5]
However, no details are provided as to how the obligations to provide
information and any safeguards provided for under the agreements or by virtue
of the operation of Australian law ensure that the right not to be subjected to
unlawful or arbitrary interference with one’s privacy is secured, or whether
any remedy is available if that right is infringed by actions taken pursuant to
these international tax agreements.
1.11
The committee:
(a) draws to the attention of the Assistant Treasurer the relevance
to the bill of the rights to equal protection and non-discrimination, and the
right not to be subject to unlawful or arbitrary interference with one’s
privacy;
(b) notes that reference to these aspects of the operation of the
bill should have been included in the statement of compatibility; and
(c) seeks further information as to the extent to which obligations
to provide information under the agreement may affect the enjoyment of the
right to privacy in respect of personal tax information, and the remedies
available if this right is infringed as a result of actions taken under these
agreements.
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