Investment Manager Regime legislation is significant for financial services trade
Sally Loane
The Investment Manager Regime (IMR) legislation, passed through Parliament this week, will remove uncertainties for foreign investors on how Australia’s tax laws apply to foreign funds.
Financial Services Council (FSC) CEO, Sally Loane said: “The IMR will bring clarity to the income tax treatment of gains made by foreign funds and foreign investors who invest through Australian fund managers.”
The IMR is intended to provide much-needed clarity and certainty for offshore investors regarding their tax treatment when using Australian based managers. Significant tax uncertainty can arise when an Australian based manager is used to manage money for foreign investors, regardless of whether the assets purchased are Australian or foreign.
Ms Loane said “This legislation is welcome and is an important step in completing the Johnson Reform recommendations.”
In his 2009 review, Australia as a Financial Centre, Mark Johnson recommended Australia implement an IMR to cover a wide range of offshore investor types, similar to regimes in place in the UK and Singapore.
“Completion of the outstanding Johnson recommendations will be critical for enabling Australia to gain a comparative advantage in financial services trade,” Ms Loane said.
“Australia has a lot to gain by making financial services a priority as a growth industry.”
The Free Trade Agreements with Japan, Korea and China and the Asia Region Funds Passport are important steps for establishing liberalised trade in our region.
“Together with the Johnson recommendations, these are initiatives which are important for delivering outcomes that facilitate Australian financial services exports to Asia and an export-oriented and globally competitive financial services industry for Australia.”
