This report contains the Joint Standing Committee on Treaties’ review of the following treaty actions:
Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (Paris, 7 June 2017);
Framework Agreement on the establishment of the International Solar Alliance (New Delhi, 18 July 2017);
Agreement between the Government of Australia and the Government of the Republic of Mauritius relating to Air Services (Port Louis, 4 February 2016);
Agreement between the Government of Australia and the Government of the State of Israel relating to Air Services (Sydney, 23 February 2017); and
Agreement between the Government of Australia and the Government of Hungary relating to Air Services (Budapest, 23 September 2016).
The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting is designed to implement measures developed as part of the Organisation for Economic Cooperation and Development (OECD)/G20 Base Erosion and Profit Shifting (BEPS) project. BEPS are strategies used by international entities to minimise their tax obligations by shifting profits between jurisdictions, and exploiting gaps and mismatches in the tax rules.
Currently the international legal framework preventing base erosion and profit shifting is based on an agreed standard for tax information exchange developed by the OECD and endorsed by the G20 in 2004. The resulting agreements are generally referred to as bilateral double taxation agreements.
Australia is party to 44 such agreements and the Multilateral Tax Treaty will modify individual bilateral treaties with those Parties that have also ratified the Multilateral Treaty. Australia can apply various choices and/or reservations to limit the extent of its adoption of the Multilateral Tax Treaty’s provisions. The Multilateral Treaty will only modify a bilateral treaty to the extent that both Parties’ choices and reservations align. If they do not align, then the provisions in the bilateral treaty will apply.
The Multilateral Tax Treaty addresses a significant and complicated problem in an environment where multinational entities exist in multiple jurisdictions and are flexible enough to make the most profitable use of taxation differences between those jurisdictions. The Committee supports this important step in ensuring every entity meets its tax obligations and recommends that binding treaty action be taken.
The Framework Agreement on the establishment of the International Solar Alliance establishes the International Solar Alliance (ISA). Membership of the ISA is open to those solar resource rich States which lie fully or partially between the Tropic of Cancer and the Tropic of Capricorn, which are members of the United Nations, and which have signed the Agreement and have deposited an instrument of ratification, acceptance or approval.
The ISA aims to deepen cooperation on solar research and development, financing mechanisms, and diffusion of solar technologies amongst countries in the tropics and is expected to address key common challenges to the scaling up of solar energy.
While the Committee notes the aspirational nature of the Framework Agreement, it acknowledges that the ISA opens the way for Australia to promote its expertise and experience in the field of solar technology and recommends that binding treaty action be taken.
The three air services agreements have been negotiated under the Convention on International Civil Aviation 1944 and are necessary to facilitate air transport services between Parties to the Convention. Such agreements cover the authorisation of airlines to operate between the Parties, rules relating to airline access to airport facilities and rights to operate businesses in the jurisdiction of each Party, safety issues, security issues, and consultation processes.
The Committee once again raised ongoing concerns that airlines operating within Australia comply with the standards established by the International Civil Aviation Organization (ICAO). The Committee reiterated that in future, National Interest Analyses accompanying air service agreements should indicate whether relevant notifications to the ICAO by the other Parties have been considered. In addition, responsible Departments should ensure that the Commonwealth Civil Aviation Safety Authority (CASA) has been consulted on any safety issues that might be relevant to the air service agreements.
The Committee recommends that binding treaty action be taken for all three air services agreements.
The report also contains the Committee’s review of four minor treaty actions:
Amendments to the Annex of the International Convention for the Prevention of Pollution from Ships, 1973, as modified by the Protocol of 1978 relating thereto Amendments to MARPOL Annex I (Form B of the Supplement to the International Oil Pollution Prevention Certificate);
Amendments to the Annex of the International Convention for the Prevention of Pollution from Ships, 1973, as modified by the Protocol of 1978 relating thereto Amendments to MARPOL Annex V (Substances that are Harmful to the Marine Environment and Form of Garbage Record Book);
Amendments to the Annex of the International Convention for the Prevention of Pollution from Ships, 1973, as modified by the protocol of 1978 relating thereto Amendments to MARPOL Annex VI (Data collection system for fuel oil consumption of ships); and
Amendment to the Agreement between the Government of Australia and the World Intellectual Property Organization (WIPO) in relation to the functioning of the Australian Patent Office as an International Searching Authority and International Preliminary Examining Authority under the Patent Cooperation Treaty.