03 Nov 14 Non-final withholding tax on transactions involving taxable Australian property
On 6 November 2013 the Government announced that it would proceed with a 10 per cent non-final withholding tax on the disposal, by foreign residents, of certain 'taxable Australian property'. The measure was originally contained in the Labor Government's 2013-14 Budget and is to start from 1 July 2016.
Under the measure, the payer in a transaction will have an obligation to withhold 10 per cent of the proceeds payable in relation to the transaction where (i) the payee is a foreign resident, and (ii) the transaction involves an asset that is 'taxable Australian property'. The measure will not apply to residential property transactions under $2.5 million.
Treasury has now released a discussion paper for public comment. The discussion paper describes the proposed design for implementing the non-final withholding tax regime, including options for reducing the compliance burden and red-tape associated with the withholding obligation.
The closing date for submissions is Friday 28 November 2014.