What the modern-day tax revolution means for Australia
Thereâs an opportunity for the country to position itself as a global financial centre â but it will have to be on its toes to ensure its potential can stay alive.
Katrina King
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The stage production Hamilton broke records across the world with its musical musings about American founding father Alexander Hamilton against the backdrop of his tax revolution.
As it storms the stage in Sydney, itâs worth noting that we are facing a modern-day tax revolution: an American-led push to end corporate tax havens through mandated global minimum corporate tax rates.
Austrade
The Australian Government is introducing new tax, research and development, and innovation incentives to attract talented individuals and exceptional businesses to Australia.
In its Budget 2021–22 Statement, the Government committed to the following programs.
New visas
The Government has introduced a new Global Talent visa and Temporary Activity visa. It will modernise the framework for individual tax residency to encourage relocation to Australia.
New business investment incentives
finalise the implementation of the Corporate Collective Investment Vehicle regime
establish a more efficient licensing regime for foreign financial service providers
review the tax treatment of venture capital to examine whether current arrangements are creating incentives for additional investment and genuine early stage Australian startups.
However, the FSC said that it was particularly pleased to see the Government’s commitment to tackling the vexed issue of legacy products across the financial sector, albeit that it warned the policy settings would need to be carefully calibrated to ensure any solutions would be beneficial for consumers.
“We look forward to working closely with the Government to ensure that the product modernisation scheme for life insurance and investment products removes the tax and social security barriers which have prevented millions of Australians from moving from older products to more modern ones,” FSC chief executive Sally Loane said.
“Approximately 1.6 million Australians are currently in outdated life insurance products. The ability to move into a modern product without any tax penalties will be a great outcome for consumers.”