Foreign investors will have greater incentive to use Australian fund managers under the Investment Manager Regime (IMR) that passed through Parliament as part of the Tax Laws Amendment yesterday.
The regime removed the tax impediment for foreign investors that use Australian fund managers and addressed the impact of 'FIN 48' – US accounting on managed funds invested in Australia in the 2010-11 and earlier income years.
It also excluded tax on some income for investors that used an Australian fund manager, agent or service provider, as well as provided clarity on the tax treatment of 'conduit income' of managed funds.
The Minister for Financial Services and Superannuation Bill Shorten said it would make Australia a more attractive destination for investment and employment in the financial services sector.
He said the tax regime removed obstacles to expanding Australia's exports and imports of financial services. Where entities conformed to the policy intent, the Government would ensure they benefitted from the new regime, according to Shorten.
"Consultation with industry has highlighted that it is not possible at this stage to define in legislation all the different investment entity structures operating in eligible offshore jurisdictions," he said.
The legislation implements the first two elements of the IMR and brings forward recommendations made in the Johnson report.
Industry is still consulting on the third element of the IMR which looks at the investment manager regime for foreign managed funds.
