The Australian Government has said that it will not go ahead with the planned 1 October 2013 start date for changes to the Offshore Banking Unit (OBU) regime.
Arthur Sinodinos, Assistant Treasurer, said: "This step is necessary in order to give business the certainty that it needs to comply with the tax laws."
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Sinodinos added consultation has indicated that the refotms as announced could affect commercial transactions that should still be eligible for offshore banking unit treatment.
The reforms were first revealed by the ex-Treasurer Wayne Swan, in his 2013-14 Budget.
Swan had planned their implementation on 1 July, but the date was delayed after concerns were raised during an initial consultation period.
The OBU regime set up in 1987, offers a concessional 10% tax rate to encourage offshore banking activity in Australia.
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By GlobalDataThe regime is applicable to banks and foreign exchange dealers and has been expanded to include insurance companies, fund managers and other companies deemed to be OBUs.
The former Labor Government believed that the OBU was used to transfer domestic banking activities and non-banking profits into OBUs.
It is not yet known which elements of Labor’s plans the Coalition expects to change. Rather, Sinodinos said that the content of the reforms will be made in a timely way, including a potential commencement date, so that business can make any necessary adjustments.
