Anthony Albanese (Grayndler, Australian Labor Party, Leader of the House) Share this | Hansard source

by leave—I present a supplementary explanatory memorandum to the bill and move government amendment (1) on sheet CJ242 as circulated:

(1) Schedule 4, item 1, page 17 (lines 11 and 12), omit "of a kind set out in subsection 10(4) of the Shipping Reform (Tax Incentives) Act 2012", substitute "an excluded vessel (within the meaning of the Shipping Reform (Tax Incentives) Act 2012)".

I also move government amendments (1) and (2) on sheet CC236 as circulated:

(1) Schedule 4, page 17 (after line 18), after item 1, insert:

1A Section 128D

Omit "or (jb)", substitute ", (jb) or (m)".

(2) Schedule 4, item 2, page 17 (line 20), omit "amendment made by this Schedule applies", substitute "amendments made by this Schedule apply".

The amendments ensure royalties for bareboat charters are exempt from withholding tax and not subject to income tax instead. The royalty withholding tax exemption for non-resident lessors or bareboat charters is designed to encourage the use of bareboat charters by Australian shipping operators. Royalty withholding tax makes it more expensive to secure foreign vessels on a bareboat basis—that is, without a captain and crew—when compared to leasing vessels fully supplied with a captain and crew. These do not attract withholding tax. This amendment follows representations from industry that the royalty withholding tax exemption had the unintended effect of subjecting lessors to income tax instead. This could defeat the policy intent.

The amendments also ensure that the bill aligns with the revised meaning of 'excluded vessels' in the Shipping Reform (Tax Incentives) Bill 2012. I commend the bill, as amended, to the House.

Question agreed to.

Bill, as amended, agreed to.

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