02 Dec 09 Proposed tax changes to provide certainty to sovereign investments - consultation paper
In a media release issued on 30 November 2009, the Assistant Treasurer, Senator Nick Sherry, announced the release of a consultation paper on the proposed changes to the income tax law to formalise the existing tax practice of exempting certain income earned by foreign governments.
The consultation paper seeks comments on the broad legislative design principles of the proposed changes, including:
- the appropriate definition of a "foreign government";
- how non-commercial (passive) income should be defined to ensure that it can be easily distinguished from commercial (active) income, thereby securing a level playing field for competing Australian businesses;
- what effect should the derivation of active income have on the tax treatment of an entity's passive income; and
- the range of taxes that should be captured under the sovereign immunity legislation.
"We are strongly committed to close consultation with industry on tax measures. We will undertake a further consultation on the draft legislation, which is expected to be introduced in the first half of 2010," said the Assistant Treasurer.
Submissions on the consultation paper close on 5 February 2010.
For a copy of the media release, No 2009/100, 30 November 2009, go here
For a copy of the consultation paper, go here