Australian Government to Implement International Tax Reforms that will Benefit the Funds Management Community.Business Editors SYDNEY, Australia--(BUSINESS WIRE)--June 3, 2003 Further Positions Australia as
Region In the May 2003 Federal Budget, the Treasurer announced reforms to Australia's international taxation arrangements to encourage the establishment in Australia of regional headquarters for foreign groups, and enhance the competitiveness and reduce the compliance costs of Australian-based managed funds. The major reforms are the following: -- Non-residents will be exempt from Australian capital Noun 1. Australian capital - the capital of Australia; located in southeastern Australia Canberra, capital of Australia Australia, Commonwealth of Australia - a nation occupying the whole of the Australian continent; Aboriginal tribes are thought to have gains tax (CGT CGT Capital Gains Tax CGT Confédération Générale du Travail (French Labor Union) CGT Confederación General del Trabajo (Spanish: Federation of Trade Unions) ) when investing in: -- Foreign assets via an Australian managed fund; and -- Certain Australian assets via an Australian managed fund (in those cases where CGT would not be imposed if the assets were held directly). -- Australian complying pension fund entities will be exempted from the foreign investment fund (FIF (Fractal Image Format) A graphics file format from content management company Interwoven, Inc. San Jose, CA (www.interwoven.com) that stores fractal images with compression ratios as high as 2,500:1. FIF was originally from MediaBin, Inc. ) rules. -- The balanced portfolio FIF exemption will be increased from 5 percent to 10 percent (non-exempt FIF interests will be exempt from the FIF rules where their aggregate value is less than 10 percent of the total value of the FIF interests of a taxpayer). -- Australian widely held public unit trusts will be exempt from interest withholding tax The amount legally deducted from an employee's wages or salary by the employer, who uses it to prepay the charges imposed by the government on the employee's yearly earnings. (IWT IWT Institute for Women and Technology IWT Incumbent Worker Training IWT Inland Waterway Transport IWT Interest Withholding Tax IWT Instituut voor Wegtransport (Belgium) IWT I Would Think IWT International Workshop on Telematics ) on interest paid on widely distributed debentures issued to non-residents. The benefits of the reforms are the following: -- Removing CGT will improve the after-tax returns for non-residents investing in international funds using an Australian-based funds manager, thereby making Australia a more attractive base for funds management activity. -- Amending FIF will reduce the compliance costs of managed and complying pension funds that invest offshore and allow global firms to more easily offer new financial products and services to Australian investors. -- Removing IWT will reduce the borrowing costs of Australian widely held public unit trusts. These reforms will strengthen Australia's position as the largest managed funds marketplace in the Asia-Pacific (and fifth biggest in the world)(*), and endorse the opinion of leading global research and consulting firm Noun 1. consulting firm - a firm of experts providing professional advice to an organization for a fee consulting company business firm, firm, house - the members of a business organization that owns or operates one or more establishments; "he worked for a Cerulli Associates which in January 2003 labeled Australia "as the most attractive marketplace into which fund managers should expand." Editor's Note Editor's Note (foaled in 1993 in Kentucky) is an American thoroughbred Stallion racehorse. He was sired by 1992 U.S. Champion 2 YO Colt Forty Niner, who in turn was a son of Champion sire Mr. Prospector and out of the mare, Beware Of The Cat. Trained by D. : The majority of reforms arising from the review will take effect on or after July 1st, 2004, subject to parliamentary approval and following public consultation to 'road-test' the reforms. The FIF and IWT amendments will be included in the first tranche Tranche One of several related securities offered at the same time. Tranches from the same offering usually have different risk, reward, and/or maturity characteristics. tranche A class of bonds. of tax changes followed by the reforms to CGT in tranche two. (*) Source: Investment Company Institute, January 2003 Further information about the review of Australia's international tax arrangements can be found at: http://www.treasury.gov.au/content/int_tax_review.asp |
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