find the latest legal job
Part Time Risk & Compliance Officer
Category: Other | Location: Brisbane QLD 4000
· Brisbane City · Flexible Part Time Hours
View details
Infrastructure Lawyer/SA
Category: Construction Law | Location: Sydney CBD, Inner West & Eastern Suburbs Sydney NSW
· Global elite law firm · Dedicated Infrastructure team
View details
In-House Legal Counsel (Mid to Senior)| Regulated Markets (Energy and Gas)
Category: Generalists - In House | Location: Melbourne CBD & Inner Suburbs Melbourne VIC
· Full PD on Request · Exciting High Impact Role
View details
Family Lawyer
Category: Family Law | Location: Eastern Suburbs Melbourne VIC
· Boutique Firm · Great Reputation
View details
Infrastructure Lawyers
Category: Construction Law | Location: All Perth WA
· We'd be particularly interested to hear from you if you were a lawyer who knows your way around the infrastructure and energy sectors.
View details
Tax instability bad for investment

Tax instability bad for investment

The Labor Government has taken back its own tax break, undermining the credibility of Australian tax law in the eyes of foreign investors, a tax expert has said.

The Government has doubled the withholding tax rate for international managed investment trusts, from 7.5 per cent to 15 per cent. The bill was passed in the Senate last week, with a concession for new buildings that meet certain energy efficiency standards.

Labor initially dropped the withholding tax rate from 30 per cent to 7.5 per cent in 2008.

Australia’s tax system appears to be in a constant state of flux, scaring off foreign investors, according to Peter Norman (pictured), head of Norton Rose’s tax practice.

“It was a backwards step ... on one hand you’ve got all this effort put into constructing a particular regime which offers a tax incentive, and then a few years later you have a doubling of the tax rate,” he told Lawyers Weekly.

“It’s not a good look ... many foreign investors have come into Australia on the basis of the reduced tax rate.”

Norman claimed any progress made by Government initiatives to attract foreign investors, such as the investment manager regime (introduced into Parliament on 21 June), has been undone by the doubling of the withholding tax.

“It’s a shame these recent steps taken by the Government may act as a blemish on otherwise good record of trying to put in legislation to attract foreign investors,” he said.

 “[The Government] needs to think carefully before embarking on regimes that are counterproductive to a lot of the good initiatives that have been adopted in recent years.”

The Tax Laws Amendment (Managed Investment Trust Withholding Tax) Bill 2012 and the Income Tax (Managed Investment Trust Withholding Tax) Bill were passed days before the 1 July roll out of the carbon tax and minerals resource rent tax.

Norman said the minerals resource rent tax is a “considerable improvement” on the resource super profits tax, which “came out of left field” and caused apprehension among foreign investors.

“[The tax] was announced without any consultation [and] caught foreign investment by surprise and that experience left a bad taste in some foreign investor’s mouths.”

Like this story? Read more:

QLS condemns actions of disgraced lawyer as ‘stain on the profession’

NSW proposes big justice reforms to target risk of reoffending

The legal budget breakdown 2017

Tax instability bad for investment
lawyersweekly logo
Promoted content
Recommended by Spike Native Network
more from lawyers weekly
Law Council of Australia
Nov 21 2017
LCA calls for urgent adoption of ‘game-changing’ recommendation
The Law Council of Australia has urged for the immediate adoption of a key recommendation put forwar...
Sally Wheeler
Nov 20 2017
ANU College of Law appoints new dean
A distinguished legal academic and the former head of law of a higher education institution in Irela...
Violence
Nov 17 2017
It's time for politicians to commit to eradicating domestic violence
The national shame of domestic violence cannot be left unaddressed, writes Christine Smyth. ...
APPOINTMENTS
Allens managing partner Richard Spurio, image courtesy Allens' website
Jun 21 2017
Promo season at Allens
A group of lawyers at Allens have received promotions across its PNG and Australian offices. ...
May 11 2017
Partner exits for in-house role
A Victorian lawyer has left the partnership of a national firm to start a new gig with state governm...
Esteban Gomez
May 11 2017
National firm recruits ‘major asset’
A national law firm has announced it has appointed a new corporate partner who brings over 15 years'...
opinion
Nicole Rich
May 16 2017
Access to justice for young transgender Australians
Reform is looming for the process that young transgender Australians and their families must current...
Geoff Roberson
May 11 2017
The lighter side of the law: when law and comedy collide
On the face of it, there doesn’t seem to be much that is amusing about the law, writes Geoff Rober...
Help
May 10 2017
Advocate’s immunity – without fear or without favour but not both
On 29 March 2017, the High Court handed down its decision in David Kendirjian v Eugene Lepore & ...