The Government on Wed 7.3.2012, released 2nd exposure draft legislation which proposes to implement Elements 1 and 2 of the Government’s proposed Investment Manager Regime (IMR).
The amendments to income tax law will clarify how certain income of foreign funds, for 2010-11 and prior income years, are taxed. The changes address a key area of investment uncertainty for US-based fund managers investing in Australia arising from the application of US accounting standard “FIN 48” (Element 1). The amendments will also clarify the treatment of certain investments of foreign funds, where the returns or gains are treated as being attributable to a permanent establishment in Australia. These changes are often referred to as the “conduit income” amendments (Element 2).
The first exposure draft was released on 16 August 2011. Mr Shorten said the 2nd exposure draft legislation takes into account issues raised by stakeholders with the previous draft. In relation to the final element of the IMR announced on 16 December 2011, Mr Shorten said legislation for which has not yet been drafted. He said consultation “on the development of this legislation will be undertaken at a later stage”.
COMMENTS are due by 4 April 2012.
[Minister for Financial Services No 012, 7 March 2012] [LTN 45, 7/3]