Parliament has passed amendments to Australia's Investment Manager Regime (IMR) bill, which the Labor government believes, will remove the potential for uncertainty regarding the tax treatment of certain foreign fund income.
The Minister for Financial Services and Superannuation Bill Shorten announced late yesterday that the Tax Laws Amendment (Investment Manager Regime) Bill 2012 had gained passage.
"This will make Australia more attractive as a destination for investment and encourage employment in the financial services sector," Shorten said.
As part of his announcement, Shorten also thanked the Financial Services Council for their contribution to the "extensive consultation process".
"Consultation with industry has highlighted that it is not possible at this stage to define in legislation all of the different investment entity structures operating in eligible offshore jurisdictions," he said.
Where entities satisfy the policy intent of the measures in this legislation, the government will use the regulation-making power provided in the legislation to ensure that they benefit from the IMR, he added.
"The Gillard Government will continue to engage with industry to ensure that the objectives of the legislation are delivered," Shorten said.
He said the government remains committed to ensuring Australia's taxation arrangements for "passive portfolio investments" of managed funds are in line with those of other major financial centres such as the United States, the United Kingdom, Hong Kong and Singapore.
The IMR bill was developed after two rounds of exposure draft legislation, including extensive consultation with industry and investors - both domestically and in international financial centres.
Commenting on the bill's passage in the Senate yesterday, opposition assistant treasury spokesman Mathias Cormann said it was a good starting point though much more work is needed in this area.
"The coalition is very supportive of ongoing efforts to make Australia into a genuine financial services hub in the Asia-Pacific region," Cormann told the Senate yesterday.
"This is a very good step forward, but there is still much work to be done.
"The Johnson report did provide a very clear and positive road map for the way forward. I do hope that the government, in the time that is left between now and the election, will start prioritising the implementation of some of the other recommendations in that report."
