Australian Treasury
The Morrison Government will take action to avoid Australia being designated a harmful tax regime by the OECD and the European Union by introducing legislation into the Parliament to reform Australia’s Offshore Banking Unit (OBU).
The OBU, established in 1992, provides a more attractive tax rate for offshore banking activity conducted by Australian registered banks.
In October 2018 the OECD’s Forum on Harmful Tax Practices (FHTP) raised concerns during a review of this regime, including the concessional tax rate and the ring-fenced nature of the regime.
In response, the Government amend the OBU to address these concerns by removing the preferential tax rate and closing the regime to new entrants.