On 26 May 2014 the Commonwealth Treasury released an exposure draft amending Bill entitled the Tax and Superannuation Laws Amendment (2014 Measures No 3) Bill 2014: Foreign resident CGT assets used by permanent establishments, and a draft Explanatory Memorandum. Submissions are sought on the proposed amendments. The closing date for submissions is Monday, 9 June 2014.
The exposure drafts address a technical issue identified in Australia’s foreign resident CGT regime. Specifically, a correction is made to the definition of “permanent establishment” in s 855-15 of the Income Tax Assessment Act 1997 (Cth).
The correction will ensure that foreign residents are subject to CGT in relation to CGT assets that they have used in carrying on a business through a permanent establishment located in Australia.