The Australian government has loosened the tax requirements on the financial services industry in an effort to remove any barriers to the use of Australian fund managers by international investors.
The Tax Laws Amendment (Investment Manager Regime) Bill 2012 was recently passed by parliament. According to the Minister this will make Australia more attractive as a destination for investment and encourage employment in the financial services sector. The legislation is designed to address the impact of the application of US accounting rules “FIN 48” on managed funds which invested in or through Australia in the 2010-11 and earlier income years.
It will exclude from Australian tax, for the 2010-11 and later income years, certain income of widely held foreign funds that is taxable only because the fund uses an Australian based agent, manager or service provider. It will also remove uncertainty as to the tax treatment of ‘conduit income’ of managed funds.
