The Turnbull Government is continuing to protect the integrity of Australia's corporate tax system by tightening the rules on stapled structures.
These entities have been used by foreigners to reduce the tax paid on the income they earn from their Australian investments.
Today I released exposure draft legislation dealing with additional integrity rules that will apply to stapled entities that access the infrastructure concession and/or transitional arrangements. This will give effect to the policy announced on 28 June 2018.
The conditions include:
- The extension of existing integrity rules that apply to Managed Investment Trusts (MITs) to ensure that all staples eligible for the transition rules or the infrastructure concession are required to comply with the existing non arm’s length income rule; and
- The introduction of statutory caps on the amount of cross-staple rent that is able to access the concessional 15 per cent rate of withholding tax (available under the MIT regime) for economic infrastructure projects during the transition or concession period.
The staples measures demonstrate the Turnbull Government’s continued action to protect the integrity of Australia’s corporate tax system and to ensure that foreign investors pay their fair share of tax.
The exposure draft legislation and explanatory materials are available on the Treasury website. The Government encourages all interested parties to make a submission. Submissions close on 14 August 2018.