Federal Treasurer Josh Frydenberg has released news of the Morrison Government’s plans to expand Australia’s tax treaty network.
The Australian government has planned to expand the country’s tax treaty network to support the economic recovery and provide greater tax certainty through foreign investment and trade in the coming years.
The plan will allow Australia to enter 10 new and updated tax treaties by 2023, building the existing network of 45 bilateral tax treaties. It will ensure that Australia’s tax treaty network covers 80% of foreign investment in Australia and about $6.3 trillion of Australia’s two-way trade and investment.
Why this matters to you
Tax treaties such as these improve tax system integrity through the establishment of a bilateral framework of cooperation on the prevention of tax evasion, the collection of tax debts and rules to address tax avoidance.
Through the treaties, businesses will be provided with greater tax certainty which will encourage increased economic integration through foreign investment and trade.
What’s happening next?
Phase one of the program is underway with negotiations with India, Luxembourg and Iceland happening this year. Phase two will begin next year, with negotiations scheduled to occur with Greece, Portugal and Slovenia.
The government will consult with interested stakeholders to inform the negotiations, welcoming views from the public.
Source: Federal Treasurer, Expanding Australia’s tax treaty network to cover 80 per cent of foreign investment, [media release], 15 September 2021, accessed 15 September 2021.
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