Government releases staples structure integrity rules
Federal Treasurer Scott Morrison has released exposure draft legislation dealing with additional integrity rules that will apply to stapled entities that access the infrastructure concession and/or transitional arrangements.
This gives effect to the Government’s policy announced on 28 June 2018, Morrison said.
The conditions extend existing integrity rules that apply to managed investment trusts (MITs) to ensure that all staples eligible for the transition rules or the infrastructure concession are required to comply with the existing non-arm’s length income rule.
They also introduce statutory caps on the amount of cross-staple rent that is able to access the concessional 15 per cent rate of withholding tax available under the MIT regime for economic infrastructure projects during the transition or concession period.
“The Turnbull Government is continuing to protect the integrity of Australia's corporate tax system by tightening the rules on stapled structures,” Morrison said.
“These entities have been used by foreigners to reduce the tax paid on the income they earn from their Australian investments.
“The staples measures demonstrate the Turnbull Government’s continued action to protect the integrity of Australia’s corporate tax system and to ensure that foreign investors pay their fair share of tax.”
The Government said the exposure draft legislation and explanatory materials are available on the Treasury website and has encouraged all interested parties to make submissions, which close on 14 August, 2018.
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