On Thursday 14.11.19, Treasury released a draft ‘Guidance Note’ for potential applicants, to the Federal Treasurer, for the economic infrastructure staples tax concession. Comments are due by 17 Jan 2020.
See below for a summary of this concession and the consultation.
FJM 17.19
The concession provides one of the exceptions, to the 30% MIT withholding tax rate, on non-resident investors, that otherwise applies to distributions of income that are attributable to a cross staple arrangement.
Under this concession, a withholding tax rate of 15% applies to distributions of income to non-residents to the extent that the income is rent from an investment in land, attributable to an approved new economic infrastructure facility (or an approved improvement). It applies for 15 years. The concession is contained in s12-439 of the Taxation Administration Act 1953 (TAA53).
The draft guidance note aims to provide guidance to potential applicants on how to apply to the Treasurer for the concession by outlining:
- the criteria to access the concession;
- the process (which requires submission of a business case to Infrastructure Australia); and
- the information that applicants will need to provide.
Applications to qualify as an approved facility can only be made by an Australian government agency (other than the Commonwealth), eg a State government authority. The draft contains a detailed checklist of the information required to be included in all applications.
The Government invites feedback from interested parties on the draft guidance note by 17 January 2020.
Treasury website: Consultation Page; LTN 220, 14/11/19]