The Coalition Government will reform Australia’s Offshore Banking Unit regime to strengthen the integrity of our tax system.
The Offshore Banking Unit Regime, established in 1992, provides a more attractive tax rate for offshore banking activity conducted by Australian registered banks.
On October 16 the OECD’s Forum on Harmful Tax Practices (FHTP) raised concerns during a review of this regime, including the concessional tax rate and the ring-fenced nature of the regime.
The FHTP regularly reviews countries’ preferential tax regimes as part of the OECD/G20 Base Erosion and Profit Shifting project in order to strengthen the international tax framework.
In response, the Government has committed to amend the regime to address these concerns with legislation to be introduced as soon as practicable and following consultation.
The Government will work closely with industry and other stakeholders as we consider options to reform the regime.
The Coalition Government is a world leader when it comes to implementing our OECD and G20 commitments on international tax.
Our Government has implemented more than a dozen measures in the past two years to the issue of multinational tax avoidance, and since 1 July 2016 the ATO has raised over $7 billion in tax liabilities from large companies.
We know there is more to be done, and that’s why we announced several new measures in the 2018-19 Budget, including our Ensuring Multi-Nationals Pay Their Fair Share of Tax Bill which is currently before the parliament.