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Key Tax Measures Pass Australian Parliament

by Mary Swire,, Hong Kong

22 June 2015

The Tax and Superannuation Laws Amendment (2015 Measures No.1) Bill was passed by the Australian Parliament on June 19, 2015.

Assistant Treasurer Josh Frydenberg said: "This Bill includes a number of key measures to modernize Australia's tax system while also providing both budget repair and efficiency measures. Its passage assures key budget repair measures of more than AUD450m (USD350.3m) over the forward estimates period. This sort of progress on budget repair is part of the Government's economic plan to ensure we live within our means and are well placed to meet the challenges of the future."

The Bill modernizes the Offshore Banking Unit (OBU) regime to include certain mobile financial activities such as trading in commodities, leasing, and entering into securities lending and repurchase agreements. It excludes from the regime trading in shares in a foreign subsidiary of an Australian bank and ensures internal financial dealings are treated on an arm's length basis.

An OBU is a notional division or business unit of an Australian entity that conducts offshore banking activities. OBUs receive concessional tax treatment in respect of eligible offshore banking activities.

The Bill ensures that contributions to the new Global Infrastructure Hub from a number of sources, including other governments, will not be treated as assessable income and subject to income tax. It also amends the Investment Manager Regime (IMR) to allow foreign entities to qualify for the IMR concession either by investing directly in Australia (direct investment concession) or investing via an Australian fund manager (indirect investment concession). The Bill also removes the Dependent Spouse Tax Offset, with effect from July 1, 2014.

TAGS: Offshore | tax | investment | business | tax incentives | budget | Australia | tax credits | agreements | tax rates | tax breaks | tax reform | Invest | Banking

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