Australia’s Labor government in 2013-14 budget has proposed a number of changes to the Offshore Banking Unit (OBU) regime taking affect for income years commencing on or after 1 July 2013.
As per the latest proposal, dealing with related parties (including between the OBU and the domestic bank) will be ineligible for the OBU concessions. Also, transaction between OBUs ( including between unrelated OBUs) will be ineligible for the OBU concession.
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Announcing his sixth budget as Treasurer, Wayne Swan said fund managers will be required to put in place systems to withhold 10% of the purchase proceeds when they acquire any non-portfolio interests in a Taxable Australian Real Property (TARP) from a non-resident.
Additionally, large entities in the PAYG instalment system, including trusts, superannuation funds, sole traders and large investors will also be required to make monthly income tax instalments.
Another change for investors is the proposed removal of the interest deduction on borrowings to fund outbound investments.
Tax avoidance and evasion using trusts has also been targeted with additional funding for the Australian Taxation Office (ATO) to investigate and audit the use of trust structures by high wealth individuals.
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