The Interim report of the Senate Rural and Regional Affairs and Transport References Committee inquiry into tax arrangements for foreign investment in agriculture and the limitations of the Foreign Acquisitions and Takeovers Act 1975 has been tabled in Parliament. The report made several recommendations, including that:
- in order to prevent tax revenue leakage and market distortions, the Government undertake an extensive review of the tax arrangements applying to foreign investments and acquisitions in the agricultural sector;
- as part of the above, the Government should review Australia’s tax laws that apply to tax exemptions for not-for-profit activities for foreign entities;
- also as part of the above, the Government should investigate ways of developing more rigorous tax liability arrangements for both government-owned and private foreign entities, particularly in relation to capital gains and passive income;
- the Government review the tax barriers for Australian organisations that limit Australian investment in long-term development projects in Australian agriculture. The review should explicitly compare tax arrangements for domestic entities to those faced by potential foreign investors in Australian agriculture. The review should also consider possible reforms of tax regulation to improve incentives for Australian capital investment in agriculture.
[LTN 232, 29/11]