The Financial Services Council (FSC) has welcomed the government's managed investment trust tax regime, while at same time calling for the introduction of collective investment vehicles (CIVs) in Australia.
The federal government tabled the Tax Laws Amendment (New Tax System for Managed Investment Trusts) Bill 2015 on Thursday, the last sitting day for parliament in 2015.
The bill will create a new tax system for managed investment trusts (MITs) applying to assessments for an income year starting on or after 1 July 2016.
The FSC welcomed the bill in a statement, saying that the new regime would provide "certainty and clarity" for MITs and their investors in relation to "many long-standing technical taxation issues".
"These include an attribution model for tax liabilities, certainty of treatment for ‘unders and overs’, deemed fixed trust treatment, and clarity regarding cost base adjustments and the treatment of tax deferred distributions," said the statement.
FSC chief executive Sally Loane said the new tax regime is a "positive step forward", but Australia needs to broaden the range of collective investment vehicles available for foreign investors "as a matter of priority".
"Offshore investors are often not familiar with the nuances of the Australian unit trust as an investment vehicle and overlook Australia in favour of other jurisdictions such as Luxembourg, Ireland and the UK which have a range of collective investment vehicles with an uncomplicated tax treatment," said the FSC.
"Allowing additional types of collective investment vehicles in Australia such as a corporate structure similar to the one used in the UK or a Luxembourg SICAV would place Australia on a level footing with these jurisdictions and would enable our export market to grow."