In the 2018 Federal Budget, the Government announced it will update the list of countries whose residents are eligible to access a reduced withholding tax rate, of 15 per cent, instead of the default rate of 30 per cent, on certain distributions from Australian Managed Investment Trusts (MITs).
Listed countries are those which have established the legal relationship enabling them to share taxpayer information with Australia. The update will add the 56 jurisdictions that have entered into information sharing agreements since 2012.
The updated list will be effective from 1 January 2019.
This measure supports the operation of the MIT withholding tax system, by providing the reduced withholding tax rate, only to residents of countries that enter into effective information sharing agreements with Australia. These agreements form an important part of Australia’s commitment to safeguard against offshore tax avoidance and evasion.
[Treasury website: Budget Paper, Part 1 – Revenue Measures, p28; Tax Month May 2018]
Study questions (answers available)
- Is the announced measure, updating the list of countries, whose residents can have the lower 15% MIT withholding rate?
- Is the qualification, to be on this list, that the Country must have arrangements with Australia to share tax information?
- Is the list being increased by 106 countries, which have been added since 2002?
- Does this measure commence, in a little over a year, on 1 July 2019?
