Nick Sherry (Tasmania, Australian Labor Party, Assistant Treasurer) Share this | Hansard source

I thank Senator Coonan for her contribution and the opposition for their support. I also thank the chamber generally for facilitating the passage of the International Tax Agreements Amendment Bill (No. 1) 2009 during this period. The bill forms part of Australia’s continued contribution to a global crackdown on tax evasion to protect public finances and international standards. The G20 emphasised the importance of implementing international standards for information exchange at its summit in April 2009. At its finance ministers meeting in September 2009, it agreed to develop effective countermeasures for use against jurisdictions that fail to meet them.

Australia has a key role in this work as the recently elected chair of the OECD-sponsored global forum on transparency and exchange of information, the main international forum for the implementation of these standards by more than 80 countries. The forum was held in Mexico City between 1 and 2 September. Australia is actively pursuing the conclusion of tax information exchange agreements with low-tax jurisdictions, such as the two agreements with the British Virgin Islands and the Isle of Mann. The continued conclusion of bilateral agreements of this type will help Australia meet its international commitment to improve the transparency and integrity of the global financial system.

The bill will give the force of law to the taxation agreements between Australia and the British Virgin Islands and Australia and the Isle of Mann, which were signed in London on 27 October 2008 and 29 January 2009 respectively. The bill will insert the text of both agreements into the International Tax Agreements Act 1953 and give the agreements the force of law in Australia. The amendments will provide for the allocation of taxing rights between Australia and the British Virgin Islands and Australia and the Isle of Mann over certain income of individuals who are residents of Australia, the British Virgin Islands or the Isle of Mann, thereby helping to prevent double taxation. The Isle of Mann agreement will also provide an administrative mechanism to help resolve transfer pricing disputes that may arise between taxpayers and the revenue authorities of Australia or the Isle of Mann.

These agreements, which were signed in conjunction with bilateral tax information exchange agreements between Australia and the British Virgin Islands and Australia and the Isle of Mann, support Australia’s efforts to combat tax avoidance and evasion through enhanced international cooperation. The agreements with the British Virgin Islands and the Isle of Mann form part of Australia’s ongoing commitment to the work of the Organisation for Economic Cooperation and Development, commonly known as the OECD, on implementing tax transparency and information exchange standards endorsed by the United Nations and the G20. The bill represents Australia’s commitment to strengthen the global financial system. I commend the bill to the Senate.

Question agreed to.

Bill read a second time.