Publication,

How foreign resident capital gains withholding rules can apply to Australian residents

AU | EN
Current site :    AU   |   EN
Australia
Belgium
China
China Hong Kong SAR
Germany
Italy
Japan
Singapore
Spain
UAE
United Kingdom
United States
Global

This Q&A guide was written by Katrina Parkyn, Jason Barnes and Ari Rosenbaum. 

New rules, which apply to the acquisition of certain Australian assets from a foreign entity occurring on or after 1 July 2016, came into effect last year. While the rules are aimed at foreign vendors, Australian residents might similarly find themselves caught by the new regime.

Where the regime requires an amount to be paid the acquirer is, broadly speaking, required to remit 10% of the purchase price to the Australian Commissioner of Taxation. Subject to an exemption or exception applying, a purchaser may have a payment obligation even where a tax liability does not arise for the foreign resident vendor. In such cases, the intent is for the parties to apply for the withholding rate to be varied.

A failure to pay an amount where the regime requires an amount to be paid may result in significant penalties for the purchaser.

Download our Q&A guide for a practical way of determining whether a particular transaction may be impacted by the regime.

LATEST THINKING
Insight
The Federal Court has refused an application to stay proceedings to quantify compensation for patent infringement (quantum proceedings) pending the outcome of separate parallel proceedings challenging the validity of the infringed patent on new grounds. The case is significant as intellectual property cases are regularly bifurcated with liability determined separately damages or an account of profits. A patentee may also bring consecutive infringement cases and therefore have two separate cases considering invalidity issues for the same patent running in parallel.

03 August 2022

Insight
Since the introduction of a nationwide Marketing Authorization Holder (MAH) system in 2019, licenses have linked directly to therapeutic products rather than manufacturers.

03 August 2022

Insight
The Bill is one of the first items of legislative change introduced by the Government in the industrial relations sphere, reflecting one of several election promises made under the “Secure Australian Jobs Plan”.

03 August 2022