Business Council Of Australia Urges International Tax Reform

by Mary Swire, Tax-News.com, Hong Kong

13 November 2002

In a joint submission released earlier this week, the Business Council of Australia (BCA) and Corporate Tax Association (CTA) suggested several reforms for the Howard government to consider during its review of Australia's international tax regime.

Speaking to reporters on Tuesday, BCA Chief Executive, Katie Lahey explained that: 'Simply put, our international tax systems are inadequate for a modern economy. The review provides a very timely opportunity to remove obstacles, reduce complexity and enhance the competitiveness of Australia's international tax law.

Among other topics, the submission addressed issues such as dividend imputation, controlled foreign company rules, tax treaties, conduit income, residency, foreign investment fund rules, and expatriate taxation.

Also speaking on Tuesday, CTA Executive Director, Frank Drenth announced that the submission sought especially to address the bias against Australian companies which invest offshore:

'That bias manifests itself through the way our system double taxes taxed foreign earnings when they are distributed to Australian shareholders - mums, dads, super funds - as unfranked dividends,' he told reporters, adding that foreign source income rules also need addressing, as they are currently too broad.

'At the moment, it's a bit like fishing with dynamite - you get a lot of fish, but you get a lot of other things that you don't necessarily want,' the CTA chief observed.

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