BILLS DIGEST NO. 83, 2015–16              23 February 2016

Tax Laws Amendment (Implementation of the Common Reporting Standard) Bill 2015

Kai Swoboda
Economics Section 

Date introduced: 3 December 2015

House:  House of Representatives

Portfolio: Treasury

Commencement:  Provisions generally commence the day after Royal Assent. However there are also contingent provisions, the commencement, or otherwise, of which depend on the passage of other legislation.

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 ComLaw website.

Purpose of the Bill

The purpose of the Tax Laws Amendment (Implementation of the Common Reporting Standard) Bill 2015 (the Bill) is to implement an international framework (the Common Reporting Standard (CRS)) endorsed by over 90 jurisdictions. The Government has committed to implement this framework from 2017. The CRS requires certain financial institutions to report information to local tax authorities on foreign resident account holders under the Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information.

The Bill amends the Taxation Administration Act 1953 to:

•       require financial institutions to carry out CRS due diligence procedures to identify reportable accounts held by foreign tax residents and provide statements about those accounts

•       require financial institutions to provide a statement in relation to certain accounts if they receive a notice requiring them to do so

•       provide for administrative penalties when financial institutions fail to collect account holder self-certifications about the jurisdiction of residence for tax purposes and

•       require financial institutions to keep records for at least five years that explain the procedures used for identifying reportable accounts.

The Bill also makes consequential amendments to the Income Tax Assessment Act 1997 and the Tax and Superannuation Laws Amendment (2015 Measures No. 5) Act 2015.

Background

What is the Common Reporting Standard?

The Common Reporting Standard for the automatic exchange of financial account tax information (CRS) provides a common international standard for:

•       the collection of financial account information by financial institutions in participating jurisdictions on account holders who are residents in another jurisdiction

•       the reporting of that information to the jurisdictions’ tax authority and

•       the exchange of that information with the respective tax authorities of the non-residents.[1]

The CRS was developed by the Organisation for Economic Cooperation and Development (OECD) and non-OECD Group of Twenty (G20) countries at the request of the G20, to tackle and deter cross-border tax evasion.[2] It was endorsed by G20 leaders at their meeting on 15 and 16 November 2014 in Brisbane, when it was noted:

To prevent cross-border tax evasion, we endorse the global Common Reporting Standard for the automatic exchange of tax information (AEOI) on a reciprocal basis. We will begin to exchange information automatically with each other and with other countries by 2017 or end-2018, subject to completing necessary legislative procedures. We welcome financial centres’ commitments to do the same and call on all to join us. We welcome deeper engagement of developing countries in the BEPS [Base Erosion and Profit Shifting][3] project to address their concerns. We will work with them to build their tax administration capacity and implement AEOI. We welcome further collaboration by our tax authorities on cross-border compliance activities.[4]

The final CRS was approved by the OECD Council on 15 July 2014.[5] The OECD document, the Standard for Automatic Exchange of Financial Account Information in Tax Matters, is directly referred to in the Bill, which incorporates the key concepts and definitions for the implementation of the CRS.[6]

Under the CRS, certain financial institutions will be required to undertake processes—referred to as ‘due diligence procedures’—to identify and report certain account information for foreign resident taxpayers.

The flow of information under the CRS about accounts held by foreign residents is illustrated in Figure 1. Under the arrangements, certain financial institutions report information about the accounts of foreign residents to their tax administrator (in Australia’s case the Australian Taxation Office), who is then able to send this information, subject to certain agreements being in place, to tax administrators in other countries.

Figure 1: The reciprocal automatic exchange framework

Source: OECD, Standard for automatic exchange of financial information in tax matters: Implementation handbook, OECD Publishing, Paris, 7 August 2015, p. 7, accessed 4 February 2016.

Multilateral approaches to tackle cross border tax minimisation and tax avoidance

There has been growing momentum by governments to address the issue of cross border tax minimisation and tax avoidance. The CRS has been one important outcome of international efforts.

The Australian Government has been involved in the G20 forum which has been seeking to address multinational corporate tax avoidance. At the request of the G20, the OECD published its Action Plan on Base Erosion and Profit Shifting (Action Plan) in July 2013.[7]

At the G20 Summit in Brisbane in November 2014, Australia committed to the G20 and OECD’s BEPS Action Plan which is designed to ‘modernise international tax rules’ and address multinational corporate tax evasion.[8]

In early September 2015, the Treasurer met with the G20 finance ministers, recommitting to working with the other G20 nations to reduce multinational tax avoidance and profit shifting.[9]

Some of the key developments relating to recent multilateral approaches to addressing cross-border taxation are summarised in Table 1.

Table 1: Key developments relating to Australia’s recent international approaches to addressing cross-border taxation

Date

Development

September 2012

Australia’s transfer pricing rules amended and aligned to the OECD Transfer Pricing Guidelines. The new rules applied retrospectively from 1 July 2004.

June 2013

OECD released 15 point Action Plan on Base Erosion and Profit Shifting (BEPS) to be delivered by end 2015.

July 2013

G20 Finance Ministers’ meeting endorsed the Action Plan and the establishment of the OECD/G20 BEPS project.

April 2014

Australia and the United States signed an intergovernmental agreement to implement the US’s Foreign Account Tax Compliance Act (FATCA) in Australia. The agreement entered into force on 30 June 2014.

September 2014

OECD delivered first tranche of recommendations from the BEPS Action Plan, which was endorsed by G20 Finance Ministers. The Treasurer released a ministerial statement on G20-OECD Tax and Transparency. The Government announced implementation of Common Reporting Standard for the automatic exchange of financial account information from 2017 to deal with tax evasion.

October 2014

Changes to tighten the thin capitalisation safe harbour limits and close a loophole to ensure that the foreign non-portfolio dividend exemption for Australian companies only applies to returns on equity. Both measures were announced but not implemented by the former Government.

November 2014

G20 Leaders endorsed the first tranche of the OECD’s recommendations from the BEPS Action Plan, delivered under Australia’s G20 Presidency

May 2015

Australia announced action on four key BEPS Actions:

·    legislation to implement county-by-country reporting (Action 13)

·    adoption of the BEPS treaty abuse rules (Action 6)

·    the Board of Taxation to consult on the implementation of anti-hybrid rules (Action 2)

·    the Australian Taxation Office commenced exchange of information on tax arrangements provided to multinationals by other countries (Action 5).

June 2015

Australia signed the OECD’s common reporting standard multilateral competent authority agreement to catch taxpayers using hidden offshore bank accounts to evade Australian tax.

July 2015

Stronger penalties started to apply to tax benefits obtained through a tax avoidance or profit shifting scheme.

October 2015

OECD released final BEPS recommendations. Endorsed by G20 Finance Ministers.

January 2016

Australian Government signed multilateral agreement to share information on multinational transfer pricing arrangements.

Source: S Morrison (Treasurer), OECD report supports Australian Government action on multinational tax avoidance, media release, 6 October 2015; S Morrison (Treasurer) and K O’Dwyer (Assistant Treasurer), Coalition bolsters ATO in fight against multinational tax avoidance, joint media release, 28 January 2016; OECD, G20 finance ministers endorse reforms to the international tax system for curbing avoidance by multinational enterprises, media release, 9 October 2015, all accessed 10 February 2016.

Foreign Account Tax Compliance Act

The development of the CRS was largely based on the implementation by the United States (US) of the Foreign Account Tax Compliance Act (FATCA). Implemented on a unilateral basis by the United States, FATCA was developed to reduce offshore tax evasion and regain federal tax revenues from American account holders at foreign (non-American) financial institutions internationally.[10]

Australia entered into an agreement with the US on 28 April 2014 to assist in the facilitation of FATCA for Australian financial institutions.[11] Legislation to give effect to Australia’s obligations under this agreement, the Tax Laws Amendment (Implementation of the FATCA Agreement) Act 2014, was supported by the opposition and passed by the Parliament in mid-2014.[12]

The first automatic sharing of account information under FATCA with the US tax authority, the Internal Revenue Service (IRS), was undertaken by the Australian Taxation Office (ATO) in September 2015.[13] This involved the sharing of the details of over 30,000 accounts worth over $5 billion with the IRS.[14]

The CRS imposes broader obligations on financial institutions than FATCA in several respects:

•       it applies to all foreign resident taxpayer accounts, not just US resident taxpayers under FATCA

•       there is no minimum account balance under the CRS, whereas there is a minimum balance of $US50,000 under FATCA and

•       the range of financial institutions required to report is wider under the CRS than under FATCA.[15]

International legal framework underpinning the CRS and countries covered

The international legal basis for the implementation of the CRS is the multilateral Convention on Mutual Administrative Assistance in Tax Matters. This Convention, to which Australia became a signatory on 3 November 2011 with entry into force for Australia from 1 December 2012, provides for all forms of administrative co-operation, contains strict rules on confidentiality and proper use of information, and permits automatic exchange of information.[16]

A tax authority is only able to automatically exchange information with a tax authority in another country under the Convention if an administrative agreement is in place. A standard agreement under the Convention, the Multilateral Competent Authority Agreement (MCAA), includes provisions for confidentiality and data safeguards.[17]

The Explanatory Memorandum notes that ‘to date, over 95 countries have committed to [the CRS] implementation’.[18] On 29 October 2014, 51 jurisdictions signed the MCAA.[19] Australia signed the MCAA on 3 June 2015.[20] The OECD notes that, as at 27 January 2016, the total number of signatories was 79.[21] Countries that had signed by this time included Bermuda, Ireland, New Zealand, Switzerland and the United Kingdom.[22]

Key terms, information to be reported and processes required to be undertaken

The CRS includes a range of definitions and concepts that will determine which institutions will need to comply, and the nature of the accounts and account holders that need to be considered in reporting information to the relevant tax authority.

Financial institutions

The CRS identifies a ‘Reporting Financial Institution’ as the type of entity that will be required to collect and report information on foreign resident account holders. There are a number of tests to determine what entities meet this definition, including whether it is an entity for CRS purposes (step 1), whether it is in a participating jurisdiction (step 2), whether it is a financial institution (step 3) and whether it is excluded as a specific non-reporting financial institution (step 4).[23] In broad terms, the CRS outlines the financial institutions that need to report as banks, credit unions, brokers and life insurers with exclusions including government entities, central banks and ‘other low-risk financial institutions’.[24]

The regulation impact statement included in the Explanatory Memorandum notes that the implementation of the CRS in Australia is expected to affect over 184 financial institutions, comprising around 101 small, 50 medium and 33 large financial institutions.[25] These institutions include 70 banks, nine building societies, 85 credit unions and some insurers and fund managers.[26]

Accounts

Under the CRS, Reporting Financial Institutions are required to review accounts they maintain to identify whether any of them need to be reported to the tax authority. The accounts to be reported—defined as ‘Reportable Accounts’—are required to be identified by the Reporting Financial Institution using a two-step process:

•       firstly, to identify financial accounts that need to be reviewed, such as depositary accounts, equity and debt interests and certain insurance contracts, with specific exclusions (‘Non-Reportable Accounts’) such as retirement and pension accounts, term life insurance contracts and ‘other low-risk excluded accounts’ and

•       secondly, to identify a ‘Reportable Account’, which itself involves two separate tests to identify whether the account holder is a resident of a jurisdiction that is a party to the CRS (defined as a ‘Reportable Jurisdiction Person’) or whether the account is held by a ‘passive’ entity, or by a person that exercises control of the entity.[27]

The CRS will apply different procedures for accounts that pre-exist the implementation of CRS by each jurisdiction and new accounts. In general, the reporting of pre-existing accounts uses a specific date selected by the participating jurisdiction and relies on information already held by the financial institution to determine whether the account is reportable or not, whilst determining the reporting of new accounts will rely mainly on new information required to be provided by an individual when a new account is established. Monetary thresholds for reporting are also established for some types of accounts.[28]

Information to be reported

The information that is to be reported to the tax authority includes information such as:

•       name

•       address

•       jurisdiction of residence

•       tax identification number (TIN) for the jurisdiction of residence

•       account details such as name of financial institution and identifying account number and

•       financial information such as the balance of value of the account and gross amount of interest paid or credited to the account.[29]

Due diligence procedures

The due diligence procedures required to be undertaken by reporting financial institutions can be different for individuals and entity accounts, pre-existing and new accounts and according to the value or balance of the account.

As an example, Figure 2 shows the due diligence process for pre-existing individual accounts requires different processes to be undertaken, leading to different outcomes for reporting, depending on the value of the account at the implementation date chosen by the jurisdiction.

Figure 2: Due diligence procedure for pre-existing individual accounts

Source: OECD, Standard for automatic exchange of financial information in tax matters: Implementation handbook, op. cit., p. 51.

Planned implementation in Australia and other selected jurisdictions

Australia’s commitment when it signed the MCAA on 23 June 2015 was for the implementation of CRS from 1 January 2017 with the first exchange of information to take place in 2018.[30]

The implementation timetable as provided for in the Bill is generally for application from 1 July 2017. On this basis, all accounts opened by financial institutions after 1 July 2017 are treated as new accounts and those maintained on 30 June 2017 are treated as pre-existing accounts.[31] With this application date, and the treatment of the period 1 January 2017 to 30 June 2017 and 1 July 2017 to 31 December 2017 as separate financial years, financial institutions will be required to report information to the ATO on accounts held over the period July 2017 to December 2017 by 31 July 2018.[32] As such, the ATO will likely be in a position to exchange information with other jurisdictions towards the end of 2018. 

A summary by the Australian Taxation Office of the implementation timetable as at 2 February 2016 provides an overview of the implementation arrangements (Figure 3).

Figure 3: Expected Common Reporting Standard implementation timeline in Australia

Source: ATO, ‘Common Reporting Standard (CRS)’, ATO website, accessed 10 February 2016.

A summary of implementation commitments by jurisdictions is available on the OECD website.[33] Countries that have committed to the exchange of information in 2017 include the United Kingdom, Ireland and the Cayman Islands.[34] Countries that have committed to the first exchange of information in 2018 include Canada, the Cook Islands and Switzerland.[35]

New Zealand

The New Zealand Government announced its commitment to implementing CRS on 29 October 2014, beginning with the exchange of information on a voluntary basis from 2018 and aiming for mandatory reporting in 2019.[36] In making the announcement, the Minister of Revenue noted that:

New Zealand intends to align its timetable with Australia’s and begin exchanging information on a voluntary basis from 2018, aiming for mandatory reporting in 2019. This will give New Zealand’s financial industry enough time to comply with the initiative.[37]

To date, no legislation has been introduced in the New Zealand Parliament to support implementation of the CRS. The OECD jurisdiction summary noted above nominates New Zealand as having committed to the first exchange in 2018.[38]

Canada

In its 2015 Budget, the Canadian Government proposed to implement the CRS from 1 July 2017, allowing for a first exchange of information in 2018.[39]

United Kingdom

The United Kingdom implemented the CRS through the International Tax Compliance Regulations 2015, which came into force on 15 April 2015.[40] Pre-existing accounts are those in existence as at 31 December 2015, with self-certification for new accounts required from 1 January 2016.[41] The first reporting period ends on 31 December 2016, with information to be reported to the UK tax authority on or before 31 May 2017.[42] Information is to be exchanged by the UK tax authority with partner jurisdictions on or before 30 September 2017.[43]

Policy development

The development of the policy to adopt the CRS was informed by a consultation process by the Treasury which included a consultation paper in mid-2014 and draft legislation in September 2015.

Consultation paper

On 19 June 2014, Treasury published a consultation paper on the CRS.[44] The Government sought specific feedback as part of this process on:

•       timing

•       financial institutions’ potential implementation and compliance costs and

•       suggestions on how to minimise the implementation and compliance costs.[45]

The Treasury received 15 submissions on the paper, including five confidential submissions.[46] Issues covered in these submissions included:

•       implementation timeframes[47]

•       the desirability of aligning CRS arrangements with those required by FATCA[48] and

•       estimates of implementation and compliance costs.[49]

Draft legislation

Draft legislation to support the implementation of the CRS was published by the Treasury on 18 September 2015, with submissions closing on 9 October 2015.[50] At the time of writing, Treasury had not yet published submissions on its website.

Some differences between the draft legislation and the Bill include:

•       the addition of penalty provisions for a financial institution which fails to obtain self-certification by individuals who open new accounts about the jurisdiction of residence for tax purposes

•       the inclusion of anti-avoidance provisions giving the Commissioner of Taxation the ability to treat an account as a reportable account and

•       a staggered implementation for due diligence processes and reporting for some types of accounts rather than a blanket commencement from 1 January 2017.

Committee consideration

Senate Standing Committee for the Selection of Bills

The Senate Standing Committee for the Selection of Bills recommended that the Bill not be referred to a committee for inquiry.[51]

Senate Standing Committee for the Scrutiny of Bills

The Senate Standing Committee for the Scrutiny of Bills drew attention to the Bill’s engagement with the right to privacy as it involves the sharing of personal information with other jurisdictions if a relevant information-sharing agreement is in place.[52] However, the Committee left the question of whether the proposed approach is appropriate to the Senate as a whole.[53]

Policy position of non-government parties/independents

During debate on the Bill in the House of Representatives, the Australian Labor Party (ALP) indicated that it would support the Bill, but moved an amendment to bring forward the deadline for reporting company accounts from 2019 to 2018.[54] The ALP also indicated that it would examine possible amendments to increase the transparency of the data provided under the CRS, such as having the ATO publish aggregated, de-identified information about how many accounts and what value holdings foreign nationals have in Australia.[55]

As at the date of writing, no other non-government parties or independents had taken a published position on the Bill.

Position of major interest groups

The Australian Banking Association (ABA) broadly supports the measures to increase transparency of income and tax flows through the CRS.[56] The ABA’s main concern has been to reduce, as much as possible, duplication and compliance costs involved.[57]

The Financial Services Council (FSC) also broadly supports implementation of the CRS but has raised concerns about compliance costs and processes.[58]

Financial implications

The Explanatory Memorandum notes that the financial impact of implementing the CRS is ‘a small but unquantifiable revenue gain’.[59] The regulation impact statement included in the Explanatory Memorandum provides some additional information, noting that:

The implementation of the CRS in Australia is estimated to deliver a small but unquantifiable revenue gain ($0 to $10 million per annum) over the forward estimates period, with larger unquantifiable gains ($10 to $100 million per annum) beyond this, as more jurisdictions implement the CRS.

The revenue gain is unquantifiable due to lack of reliable data. As more countries implement the CRS and the ATO undertakes more compliance activity, it is expected that the revenue gain will increase over time.

Although the revenue gain is unquantifiable, it is important to note that the automatic reporting of foreign financial accounts of Australian residents to the ATO will act as a strong deterrent against the concealment of foreign source income by such residents. This will drive substantial improvements in voluntary compliance and increase community confidence and willingness to participate in the tax system.[60]

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.[61]

The Parliamentary Joint Committee on Human Rights did not raise any human rights concerns associated with the Bill.[62]

Key issues and provisions

Compliance costs to be borne by account holders and customers of financial institutions

As noted in the Explanatory Memorandum, the CRS is estimated to affect over 184 financial institutions.[63] The compliance costs for financial institutions relate to professional legal services, business systems design and development and the development of staff training and education.[64] The compliance costs for implementation of the CRS from 1 July 2017, as proposed in the Bill, consist of $55.4 million in minimum upfront implementation costs and ongoing compliance costs of $12.7 million per year.[65]

It is expected that the burden of meeting compliance costs will fall to the customers of financial institutions. The Explanatory Memorandum notes:

Financial institutions have advised that their compliance costs to implement the CRS are expected to be borne by Australian consumers of financial services in the form of higher fees and charges and/or higher interest rates, rather than being borne by the owners of the financial institutions. This is a result of financial institutions’ cost of capital being set in international capital markets, especially for foreign owners, and if the compliance costs were borne by these owners it would lower their return, possibly leading to disinvestment.[66]

Application of the CRS to Australian financial institutions

Item 13 inserts the substantive amendments to the Taxation Administration Act 1953 that relate to the implementation of the Common Reporting Standard.[67] New Subdivision 396-C essentially requires certain financial institutions to give information to the Commissioner of Taxation based on the definitions, processes and requirements of the CRS. The subdivision defines the CRS in new section 396-110 (‘Meaning of CRS’) to be ‘the Common Reporting Standard set out in Part II.B of the Standard for Automatic Exchange of Financial Account Information in Tax Matters approved by the Council of the Organisation for Economic Co-Operation and Development on 15 July 2014’.

Some elements in new Subdivision 396-C where domestic law is being used to tailor provisions to Australia, include:

•       the exclusion of entities such as government entities, central banks and retirements funds, or an entity the relevant Minister prescribes by legislative instrument, from reporting under the CRS (proposed subsection 396-115(1)).

•       the exclusion of certain accounts such as retirement and pension accounts, certain other tax-favoured accounts, or an account the relevant Minister prescribes by legislative instrument, from being considered as a reportable account (proposed subsection 396-115(3))., and

•       an entity may choose to treat all dollar amounts specified in the CRS as being in Australian dollars (proposed subsection 396-120(8)).

Implementation timetable

As noted previously, Australia’s commitment when it signed the MCAA on 23 June 2015 was for the implementation of CRS from 1 January 2017 with the first exchange of information to take place in 2018.[68]

The date specified for a pre-existing account is specified to be 30 July 2017 (proposed subsection 396-120(6)).

Item 14 of Schedule 1 sets out the implementation dates for reporting by financial institutions and other entities, with reference to the CRS.

The requirements under the CRS are generally implemented with respect to calendar years (January to December) and the implementation timetable establishes the period 1 July 2017 to 31 December as a separate calendar year. The key dates for reporting arrangements are:

•       determination of whether a pre-existing individual is a high value account (an aggregate balance or value that exceeds $US1 million)— 30 June 2017 (proposed table item 1 at item 14)

•       determination of whether a pre-existing individual account is a lower value account (an aggregate balance or value that does not exceed $US1 million)— 30 June 2017 (proposed table item 1 at item 14)

•       deadline for completing reviews of pre-existing individual accounts that are lower value accounts— 31 July 2019 (proposed table item 2 at item 14)

•       deadline for completing reviews of pre-existing individual accounts that are high value accounts— 31 July 2018 (proposed table item 2 at item 14)

•       determination of whether a pre-existing entity account has an aggregate account balance or value of $US250,000 or less, or exceeds $US250,000— 30 June 2017 (proposed table item 3 at item 14) and

•       deadline for completing reviews of pre-existing entity accounts with a balance exceeding $US250,000— 31 July 2019 (proposed table item 6 at item 14).

This staged timetable will allow for the sharing of information towards the end of 2018, consistent with the Government’s commitment. However, some information (pre-existing individual accounts with a value of less than $US1 million and pre-existing entity accounts valued at more than $250,000), will potentially not be shared with other jurisdictions until later in 2019.

While the Regulation Impact Statement included in the Explanatory Memorandum canvases different commencement dates, none of the options presented included differentiated starting dates for different types of accounts. The draft legislation, released in September 2015, included provisions for reporting financial institutions to defer their reporting obligations by 12 months to ‘minimise the regulatory burden for Australian financial institutions’.[69] However, this option was not included in the final Bill. The draft legislation did however contemplate a later reporting date for pre-existing low value accounts (which In the draft legislation related to accounts open as at 31 December 2016), of 31 July 2019.[70]

Members, Senators and Parliamentary staff can obtain further information from the Parliamentary Library on (02) 6277 2500.

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[1].              Treasury, Common Reporting Standard for the automatic exchange of tax information, discussion paper, Treasury, Canberra, June 2014, p. 1, accessed 3 February 2016.

[2].              Ibid.

[3].              BEPS is discussed below.

[4].              Group of Twenty (G20), G20 Leaders’ Communique Brisbane summit, communique, 15–16 November 2014, p. 2, accessed 4 February 2016.

[5].              OECD, ‘Standard for automatic exchange of financial information in tax matters’, OECD website, accessed 4 February 2016.

[6].              OECD, Standard for automatic exchange of financial account information in tax matters, OECD Publishing, Paris, 21 July 2014, accessed 4 February 2016.

[7].              OECD, Action plan on base erosion and profit shifting (Action Plan), OECD Publishing, Paris, 2013, accessed 7 November 2015.

[8].              Group of Twenty (G20), G20 Leaders’ Communique Brisbane Summit, op. cit.

[9].              J Hockey (Treasurer) and C Jordan (Commissioner of Taxation), Joint press conference: multinational tax avoidance [etc.], press release, 16 September 2015, accessed 7 November 2015; J Hockey, ‘Second reading speech: Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill 2015’, House of Representatives, Debates, 16 September 2015, pp. 10323, accessed 7 November 2015.

[10].              B Pulle and H Gobbett, The US Foreign Accounts Tax Compliance Act (FATCA) and interaction with G20 initiatives: a quick guide, Research paper series, Parliamentary Library, Canberra, 10 January 2014, accessed 4 February 2016.

[11].              Australian Taxation Office (ATO), ‘Foreign Account Tax Compliance Act’, ATO website, accessed 4 February 2016.

[12].              Parliament of Australia, ‘Tax Laws Amendment (Implementation of the FATCA Agreement) Bill 2014 homepage’, Australian Parliament website, accessed 4 February 2016.

[13].              ATO, A major step in global transparency, media release, 23 September 2015, accessed 5 February 2016.

[14].              Ibid.

[15].              Treasury, Common Reporting Standard for the automatic exchange of tax information, op. cit., pp. 3 and 6; KPMG, ‘Common Reporting Standard: proceed with caution’, KPMG website, accessed 11 February 2016.

[16].              Convention on Mutual Administrative Assistance in Tax Matters, done at Strasbourg on 25 January 1988 [2012] ATS 38 (entered into force for Australia 1 December 2012). OECD, Standard for automatic exchange of financial account information in tax matters, op. cit., p. 13. OECD, Jurisdictions participating in the Convention on Mutual Administrative Assistance in Tax Matters: Status 20 January 2016’, OECD website, accessed 4 February 2016.

[17].              OECD, ‘The CRS Multilateral Competent Authority Agreement’, OECD website, accessed 4 February 2016.

[18].              Explanatory Memorandum, Tax Laws Amendment (Implementation of the Common Reporting Standard) Bill 2015, p. 7.

[19].              OECD, ‘The CRS Multilateral Competent Authority Agreement’, op. cit.

[20].              Ibid.

[21].              Ibid.

[22].              OECD, ‘Signatories of the Multilateral Competent Authority Agreement on automatic exchange of financial account information and intended first information exchange date: status as of 27 January 2016’, OECD website, accessed 4 February 2016.

[23].              OECD, Standard for automatic exchange of financial information in tax matters: Implementation handbook, op. cit., p. 35.

[24].              Ibid., p. 39.

[25].              Explanatory Memorandum, op. cit., p. 63.

[26].              Ibid.

[27].              OECD, Standard for automatic exchange of financial information in tax matters: Implementation handbook, op. cit., pp. 42–46.

[28].              Ibid., pp. 49–69.

[29].              Ibid., pp. 71–75.

[30].              J Hockey (Treasurer) and S Ciobo (Parliamentary Secretary to the Minister for Foreign Affairs and Parliamentary Secretary to the Minister for Trade and Investment), Australia signs up to combat tax evasion, joint media release, 3 June 2015, accessed 10 February 2016.

[31].              Explanatory Memorandum, op. cit., p. 13.

[32].              Item 14 of the Bill includes the commencement dates of 1 July 2017 for most aspects of the CRS in Australia. Item 13 of the Bill includes proposed subsection 396-105(6) which requires statements that contain information under the CRS to be given to the Commissioner of Taxation no later than the first 31 July after the end of the financial year.

[33].              OECD, ‘CRS by jurisdiction’, OECD website, accessed 10 February 2016.

[34].              Ibid.

[35].              Ibid.

[36].              T McClay (Minister of Revenue), NZ to join global crackdown on tax evasion, media release, 29 October 2014, accessed 10 February 2016.

[37].              Ibid.

[38].              OECD, ‘CRS by jurisdiction’, OECD website, accessed 10 February 2016.

[39].              Government of Canada, ‘2015 Budget: Annex 5.1 – Tax measures: Supplementary information’, Government of Canada website, accessed 5 February 2016.

[40].              HM Revenue & Customs (UK), Automatic exchange of financial account information: guidance notes, HMRC, 14 September 2015, p. 11, accessed 5 February 2016.

[41].              Ibid., p. 14.

[42].              Ibid.

[43].              Ibid.

[44].              Treasury, ‘Common Reporting Standard for the automatic exchange of tax information’, Treasury website, accessed 3 February 2016.

[45].              Ibid.

[46].              Ibid.

[47].              ANZ, Submission to Treasury, Common Reporting Standard for the automatic exchange of taxpayer information: discussion paper, 16 July 2014, p. 2; Financial Services Council (FSC), Submission to Treasury, Common Reporting Standard for the automatic exchange of taxpayer information: discussion paper, July 2014, p. 2, both accessed 16 February 2016.

[48].              ANZ, op. cit., p. 2; Property Council of Australia, Submission to Treasury, Common Reporting Standard for the automatic exchange of taxpayer information: discussion paper, 18 July 2014, p. 3, accessed 16 February 2016.

[49].              FSC, Submission, op. cit., p. 15; Customer Owned Banking Association, Submission to Treasury, Common Reporting Standard for the automatic exchange of taxpayer information: discussion paper, 17 July 2014, p. 5, accessed 16 February 2016.

[50].              Treasury, ‘Draft legislation to implement in Australia the OECD’s Common Reporting Standard for the automatic exchange of financial account information’, Treasury website, accessed 4 February 2016.

[51].              Senate Standing Committee for the Selection of Bills, Report, 1, 2016, 4 February 2016, accessed 4 February 2016.

[52].              Senate Standing Committee for the Scrutiny of Bills, Alert digest, 1, 2016, 3 February 2016, p. 44, accessed 4 February 2016.

[53].              Ibid.

[54].              A Leigh, ‘Second reading speech: Tax Laws Amendment (Implementation of the Common Reporting Standard) Bill 2015’, House of Representatives, Debates, 8 February 2016, p. 65; A Leigh, Proposed amendments to the Tax Laws Amendment (Implementation of the Common Reporting Standard) Bill 2015, House of Representatives, 8 February 2016, both accessed 9 February 2016.

[55].              Ibid.

[56].              Australian Bankers Association Inc., ABA’s response to the Tax discussion paper, 1 June 2015, p. 12, accessed 11 February 2016.

[57].              Ibid.

[58].              FSC, Submission, op. cit.

[59].              Explanatory Memorandum, op. cit., p. 3.

[60].              Ibid., p. 38.

[61].              The Statement of Compatibility with Human Rights can be found at pages 25–30 of the Explanatory Memorandum to the Bill.

[62].              Parliamentary Joint Committee on Human Rights, Thirty-third report of the 44th Parliament, 2 February 2016, pp. 1–2, accessed 4 February 2016.

[63].              Explanatory Memorandum, op. cit., p. 63.

[64].              Ibid.

[65].              Ibid., p. 62.

[66].              Ibid., p. 64.

[67].              Taxation Administration Act 1953, accessed 19 February 2016.

[68].              J Hockey (Treasurer) and S Ciobo (Parliamentary Secretary to the Minister for Foreign Affairs and Parliamentary Secretary to the Minister for Trade and Investment), Australia signs up to combat tax evasion, joint media release, 3 June 2015, accessed 10 February 2016.

[69].              Explanatory Memorandum, Draft legislation to implement in Australia the OECD’s Common Reporting Standard for the automatic exchange of financial account information, p. 15, accessed 22 February 2016.

[70].              Ibid.