CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. Australia Proceeds With Fund Manager Tax Reforms

Australia Proceeds With Fund Manager Tax Reforms

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

21 December 2011


The Australian government has announced plans to implement the third and final element of an investment management regime (IMR), which, according to Minister for Financial Services Bill Shorten, will provide certainty of tax treatment for the funds management sector.

Under the reforms, income, gains or losses, which have an Australian source, from portfolio interests or financial arrangements of a foreign managed fund, will be excluded from the calculation of the fund's taxable income (and that of its non-resident investors).

However, the exemption will not apply to the extent that withholding tax is currently payable on the income, nor will it cover income or gains from an interest, other than a portfolio interest in a publicly traded company, in taxable Australian property.

The exemption will be restricted to foreign managed funds domiciled in countries that are recognized by Australia as engaging in "effective exchange of information".

Shorten said that the changes will further enhance Australia as a financial services centre in the Asia Pacific region.

"The IMR will provide certainty of tax treatment for the funds management sector, which in Australia has AUD1.8 trillion (USD1.78 trillion) of funds under management (or 131% of Australia's GDP) - AUD61bn of which comes from offshore," he stated.

Shorten added that legislation for the first two stages of the IMR, announced in December 2010 and January 2011 respectively, is currently being finalized and is expected to be introduced into Parliament in the first half of 2012. He also revealed that the government has decided to extend the previously announced element 2, which exempts from Australian tax the conduit income of foreign funds portfolio investments, to foreign non-portfolio investments of managed funds.

"The implementation of the IMR for managed funds ensures that Australia's taxing arrangements with regards to passive portfolio investments are in line with international norms and will make Australia a more attractive place to do business for foreign funds", Shorten said.

TAGS: tax | investment | business | real-estate investment | interest | law | financial services | real-estate | investment funds | hedge funds | international financial centres (IFC) | Australia | offshore | legislation | withholding tax | services

To see today's news, click here.

 















Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »



Stay Updated

Please enter your email address to join the Tax-News.com mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.


To manage your mailing list preferences, please click here »