International Tax Authority (Amendment) Act, 2022 (No. 3 of 2022)

Summary

This Act amends the International Tax Authority Act, Revised Edition 2020, substantially expanding the ITA's investigative, enforcement and supervisory powers over persons and legal entities involved in tax cooperation, beneficial ownership and economic substance matters. It inserts a suite of new sections (4A to 4N) covering information-gathering, search warrants, examinations under oath, cooperation with foreign competent authorities, compliance obligations, inspections, enforcement action and directives.

• New definitions: Adds definitions of company, Financial Institution, Intermediary (promoter), legal entity, limited partnership, Multinational Enterprise Group and reportable taxpayer, broadening the scope of persons subject to ITA oversight.
• Information and document powers: The Authority may request information from any person or legal entity (4A) and issue formal notices requiring specified persons to provide information or produce documents within a specified time and place (4C).
• Search warrants: Where a notice is not complied with or evidence may be destroyed, the Authority may apply to a Magistrate for a search warrant to enter premises, seize documents and use reasonable force (4D).
• Examination under oath: The Authority may apply for examination of a person before a Magistrate (4E) or conduct its own examination under oath (4F); failure to attend or answer questions is an offence punishable by a fine up to five thousand dollars.
• Cooperation with foreign authorities: The Authority may share information, conduct investigations and provide assistance to foreign competent authorities on request, subject to safeguards on confidentiality and reciprocal assistance (4G, 4H).
• Compliance function: Every legal entity must establish and maintain adequate systems, controls and a compliance procedures manual to ensure compliance with the Act, mutual legal assistance legislation, and any Guidance, Rules or directives issued by the Authority (4I).
• Compliance inspections: The Authority may inspect a legal entity's premises, assets, business and documents, and may permit foreign competent authorities to participate in inspections in defined circumstances (4J).
• Enforcement, directives and costs: The Authority gains enforcement powers, may issue directives requiring corrective action following inspections or reviews, and may recover its costs and expenses, including investigation costs, from legal entities (4K to 4M).
• Approved forms: The Authority may publish approved forms for use under mutual legal assistance legislation (4N).
• Schedule 1 expanded: Adds the Beneficial Ownership Secure Search System Act and the Economic Substance (Companies and Limited Partnership) Act to the list of mutual legal assistance legislation the ITA administers.

The amendments do not introduce new filing deadlines for regulated entities generally, but create binding obligations to respond to ITA notices, cooperate with inspections and examinations, and maintain compliance infrastructure on an ongoing basis.

Key obligations

• Legal entities must establish and maintain adequate systems and controls, including a compliance procedures manual, to ensure compliance with the Act, mutual legal assistance legislation, and any Guidance, Rules or directives issued by the Authority (section 4I).
• A person or legal entity issued a notice under section 4C must provide the specified information or produce the specified documents within the place and period stated in the notice.
• A person notified under section 4F to attend an examination under oath must attend and answer questions properly put, or commit an offence liable to a fine of up to five thousand dollars.
• Legal entities must permit and cooperate with compliance inspections of premises, assets, documents and personnel conducted by the Authority under section 4J.
• A legal entity subject to a directive issued under section 4M must take the actions specified to address identified deficiencies.
• A legal entity may be required to pay costs and expenses incurred by the Authority in connection with investigations or enforcement action under section 4K/4L.

Applies to

companies, foreign companies, limited partnerships, Financial Institutions, Multinational Enterprise Groups, Intermediaries (promoters), reportable taxpayers, legal entities generally

Deadlines

• within seven days of the application: A Magistrate must process an application by the Authority for examination of a person under oath within seven days.
• not exceeding fourteen days from the date of the examination: Results of a Magistrate-ordered examination under section 4E must be transmitted to the Authority within a reasonable period not exceeding fourteen days.
• within one month from the date of the warrant: A search warrant issued under section 4D authorises entry to premises at any time within one month from the date of the warrant.
• three months (or until conclusion of proceedings if a criminal case is commenced): Documents seized under a search warrant may be retained for three months, or longer if related criminal proceedings are commenced.

Related documents

• This document amends International Tax Authority Act (Revised Edition 2020)