On 27 March 2018, the Australian Government announced a package of measures to address risks to the corporate tax base posed by stapled structures and similar arrangements and limit access to concessions currently available to foreign investors for passive income. A proposal paper for public consultation is now released on the Treasury website.

The proposal paper outlines the conditions stapled entities must comply with to access the proposed infrastructure concession and transitional arrangements.

The conditions include:

  • The extension of existing integrity rules that apply to Managed Investment Trusts (MITs) to ensure that all staples are required to set their rent at arms’ length prices; and
  • The introduction of statutory caps on the amount of cross-staple rent that is able to access the concessional rate of withholding tax (available under the MIT regime) for new and existing infrastructure projects during the transition or concession period.

The Government invites interested parties to make a submission. The consultation will be closing on Thursday 12 July 2018.

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