Changes to the foreign dividend account rules will improve the attractiveness of Australia as a place to establish regional headquarters and help Australian based multinationals to become more competitive.
Minister for Revenue and Assistant Treasurer, Mal Brough, today released for consultation the draft legislation outlining changes that were announced in the Government's response to the Review of International Tax Arrangements.
The proposed new rules will allow an Australian company that receives foreign income on which no Australian tax is payable to pay dividends to foreign shareholders free of Australian tax.
"Reducing the tax impediments on these payments to foreign shareholders will make Australia a more attractive base for multinationals looking to establish regional headquarters. It also benefits Australian-based multinationals by enhancing their ability to compete for foreign capital," Mal Brough said.
This measure is a significant part of the reform of Australia's international tax arrangements. The Government has already delivered five instalments of its package of international tax reforms. This includes the changes currently before the Parliament that provide for a more neutral tax treatment of branches and subsidiaries, and which reform the employee share rules where individuals move between countries.
Interested parties are invited to submit comments on this exposure draft by Wednesday 20 July 2005. The exposure draft and explanatory material can be viewed on Treasury's website (www.treasury.gov.au).
Comments can be submitted by email to conduit@treasury.gov.au or to:
The Manager,
International Tax Reform Unit, International Tax and Treaties Division
The Treasury
Langton Crescent
Parkes ACT 2600
It is intended that all comments will be treated as public and placed on the Treasury website. Therefore, you must clearly indicate if you wish your comments to be treated as confidential.