|Australia Changes Tax Rules for Foreign Investment|
The Australian Government has announced that it will apply new requirements on foreign investment applications to ensure that multinational companies pay tax on what they earn.
The Treasurer said: "Foreign investment applications will have to comply with Australian taxation law, Australian Taxation Office (ATO) directions to provide information in relation to the investment, and [advise] the ATO if investors enter into any transactions with non-residents to which transfer pricing or anti-avoidance measures of Australian tax law may potentially apply."
"Additional conditions may also be applied where a significant tax risk is identified in a particular case. These may include requiring the investor to enter into advance pricing arrangements or seek rulings from the ATO, or comply with other directions from the ATO that are specific to their circumstances. A breach of these conditions could result in prosecution, fines, and potentially divestment of the asset."
He added: "The additional requirements on foreign investors add to the existing national interest test which also considers a range of factors, such as national security, the impact of competition, the character of the investor, and the impact on the economy and the community."
Under the proposed new conditions, an applicant must:
The opinions expressed do not constitute investment advice and specialist advice should be sought about your specific circumstances.
Published on our website on Feb.22, 2016