The Australian Board of Taxation has released a position paper which has identified ways in which Australia's foreign source income anti-tax-deferral (attribution) rules can be simplified.
The position paper follows on from the Board’s extensive consultation and discussion paper of May 25th 2007, and examines Australia’s attribution rules, the controlled foreign company (CFC) rules, foreign investment fund (FIF) rules, transferor trust rules and the deemed present entitlement rules, which the government admits are notoriously complex, and impose high compliance costs on Australian business.
The Board has examined whether the rules strike an appropriate balance between maintaining the integrity of the tax system and unnecessarily inhibiting Australians from competing in the global economy, and has suggested ways to reduce complexity and compliance costs.
“The government is keen to advance reforms to Australia’s tax laws to improve the competitiveness of Australian business, cut red tape and to help make Australia an Asian financial hub,” stated Assistant Treasurer Chris Bowen, commenting on the Board's paper.
“The government therefore welcomes the release of the Board’s position paper and will closely examine the Board’s final recommendations when they are released later in the year," he added.
According to the government, the position paper will form the basis of further consultations with industry, to allow the Board to formulate final recommendations for the government to consider.
A comprehensive report in our Intelligence Report series looking at offshore and onshore corporate structures and their tax implications is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report7.asp
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