Tuesday, April 19, 2011

Australia considers tax breaks for sovereign wealth funds

The Australian government on Wednesday said it was considering tax exemptions for sovereign wealth funds that have passive investments in Australian assets.

Commenting on a paper discussing the options on tax, Assistant Treasurer Bill Shorten said funds invested in Australia by foreign government investment bodies amounted to around A$65 billion.

"By exempting those investments that are generally of a passive nature from income tax, which is standard practice around much of the world, as well as reducing compliance costs and increasing certainty, we position Australia as an attractive destination for more sovereign investment in the future," Shorten said in a statement.

"By codifying the current tax treatment of sovereign investment, which has developed historically, we can make sure sovereign immunity law is consistent with the Government's policy to tax inbound capital in a way that does not deter foreign investment."

Source: http://www.reuters.com

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