Overseas investment by Australians has grown over the last decade

Reforming international taxation

Following the Review of Australia's International Taxation Arrangements, the Government is announcing a package of reforms that continues the Government's commitment to improve the international competitiveness of Australian business.

Improving offshore competitiveness

To maintain Australia's status as an attractive place for business and investment, the tax system needs to continually adapt to the increasingly integrated global business environment. With these issues in mind the Government undertook a Review of Australia's International Taxation Arrangements.

After an extensive consultation process conducted by the Board of Taxation, the Government is announcing its response to the review.

This package of reforms will help Australian business integrate further into the international economy by improving the competitiveness of Australian companies with offshore operations. It will also encourage the establishment in Australia of regional headquarters for foreign groups.

The reforms will

reduce the compliance costs associated with the controlled foreign company rules
reduce tax on certain forms of foreign business income and gains
modernise Australia's tax treaty network
better target the foreign investment fund rules

To enable adequate public consultation on designing the legislation, most reforms will not commence until 1 July 2004 or later. Priority will be given to achieve early commencement of several key reforms.

This package of reforms continues the Government's strong record of helping Australian business be internationally competitive.