The Government will amend the Financial Corporations (Transfer of Assets and Liabilities) Act 1993 by extending to 30 June 2003 the deadline for foreign banks obtaining a banking authority in order to be eligible for concessional tax treatment when transferring assets and liabilities.
The existing deadline expired on 30 June 2001. It will also extend the deadline to effect any subsequent transfer of assets and liabilities from 30 June 2004 to 30 June 2006. It is unlikely that these deadlines will be extended in the future.
The Act was created to help restructure foreign banks operating in Australia by enabling certain taxes and charges to be waived on the transfer of assets and liabilities (including tax losses) when a foreign bank subsidiary changed to a branch structure.
It was also designed to ensure that foreign bank subsidiaries set up before 18 June 1993 that wanted to convert to a branch structure were not disadvantaged compared with new foreign bank branches.
The extension to the deadlines is proposed to apply from 1 July 2001, and will provide foreign banks with extra time to decide on their future structure.
The proposed amendments are consistent with promoting Australia as a centre for global financial services.
Legislation to effect these proposed changes is expected to be introduced into Parliament in the 2001 Spring Sittings.