The Minister for Financial Services & Regulation, Joe Hockey today said the Government's New Business Tax System package sent a strong signal to the international financial community that Australia was serious about becoming a global Financial Centre.
"Reducing the corporate tax rate is an enormously positive step and makes Australia even more internationally competitive. Our rate is now lower than the US and equal to the United Kingdom and Germany," the Minister said.
"Combined with our other Government initiatives, our business tax reforms make us an extremely cost-effective venue for financial services activity across the Asia timezone.
"Reforming the way capital gains are taxed removes impediments to efficient asset management, improves capital mobility and makes Australia's capital gains tax internationally competitive."
Measures crucial to securing Australia's future as a financial centre are:
- Lowering the company tax rate from 36 per cent to 30 per cent from 1 January 2001.
- Reforming capital gains tax so that individuals and super funds pay no more than 24.5 per cent and 10 per cent tax, respectively.
- Encouraging venture capital investment by allowing non-resident tax-exempt pension funds, such as those in the US, to be exempt from capital gains tax involving venture capital investments.
"The New Business Tax System builds on recent changes to interest withholding tax exemptions on corporate bonds, offshore banking units (OBUs), foreign investment fund measures and thin capitalisation rules which passed through the Australian Parliament in June.
"Australia will now have a globally competitive tax system to match our world-class regulatory regime, our outstanding IT infrastructure, our highly skilled workforce and our deep, liquid and sophisticated financial markets."
The Review of Business Taxation web site is: www.rbt.treasury.gov.au