The Government [on Thur 12.3.2015] released draft legislation to make reforms to the Offshore Banking Unit (OBU) regime.
On 6 November 2013, the Government announced that it would proceed with certain reforms to the OBU regime. These reforms would address a number of integrity concerns with the existing regime while ensuring the OBU regime targets mobile financial sector activity.
The proposed amendments in the draft Bill would:
- limit the availability of the OBU concession in certain circumstances where it could otherwise be used to convert ineligible activity into eligible activity by trading in a subsidiary;
- codify the “choice principle” to remove uncertainty for taxpayers;
- introduce a new method of allocating certain expenses between the operations of a taxpayer’s domestic banking unit and the OBU;
- modernise the list of eligible activities; and
- treat internal financial dealings (eg between an Australian bank and its offshore branch) as if they were on an arm’s length basis.
COMMENTS are due by 8 April 2015.
[Copy of the Treasury summary] [LTN 48, 12/3/15] [IT 12/3/15]