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FDI: Treatment and operations, nes
On 14 May 2013, the Treasurer of Australia, Mr. Wayne Swan, has delivered the 2013-14 Budget. He has stated that A$170 billion in tax receipts have been lost since the beginning of the global financial crisis. Therefore, a series of measures increasing the tax burden of multinationals and foreign investors has been introduced as follows:
Effective 1 July 2014, the "thin capitalisation" rules with regard to non-residential multinationals will become stricter:
Until the moment, non-residents that are not operating through an Australian permanent establishment pay capital gains taxes (CGT) on assets that may be direct or indirect interests in Australian real property, including mining, quarrying and prospecting rights. However, a new legislative change foresees for CGT events occurring after 14 May 2013 Australian real property to be expanded to include new non-real property assets, such as goodwill.
Effective 1 July 2016, a non-final 10% withholding and remittance to the tax authorities regime will be introduced for the foreign residents' gross proceeds from the sale of certain types of Australian real property with transaction value below $2.5 million.
Update with regard to the withholding tax:
On 23 February 2016, the Australian parliament passed the underlying act. It included an exclusion of the tax for properties valued below 2 million AUD and came into force - as planned - on 1 July 2016.
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