Foreign investment tax to be aligned with OS markets
Australia's taxation of foreign managed funds will soon be aligned with countries including the US, the UK, Hong Kong and Singapore, as the Federal Government rolls out its draft amendments to the Investment Manager Regime.
The amendments to income tax law will clarify how certain income of foreign funds for 2010-11, and prior income years, are taxed. It would also clarify the treatment of certain investments of foreign funds, where the returns or gains are treated as being attributable to a permanent establishment in Australia, the Government said.
The Assistant Treasurer and Financial Services Minister, Bill Shorten, said the proposed changes in tax treatment would provide certainty for businesses investing through Australian intermediaries.
"These new measures will help Australia retain $57 billion already invested here by foreign managed funds; the proposed amendments will support Australia's managed funds industry, which stood at around $1.8 trillion at the end of March 2011," Shorten said.
The newly released draft was supported by the Financial Services Council (FSC), which recommended the Investment Management Regime to the Financial Centre Taskforce (Johnson Review) in late 2009.
FSC chief executive John Brogden welcomed the Government's intentions to pass the legislation by the end of the year.
"It will remove uncertainty for Australian fund managers and encourage foreign investors to invest in Australian based fund managers," Brogden said.
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