The Federal Government has been urged to use the May Budget to put in place the domestic taxation and regulatory changes necessary to give the Australian funds management industry a head start with respect to the Asian Region Passport.
The Financial Services Council (FSC) has used its pre-Budget submission to urge the Government action pointing out the Passport is now anticipated to commence in early 2017, and noting that Australia is likely to be one of the first two participating jurisdictions to be ready.
It said it was on this basis that it was critical that domestic taxation and regulatory changes were put in place so that “Australian fund managers can benefit from both the Passport and the recent free trade agreements with Japan, Korea and China”.
The submission said Australia’s ability to successfully compete in the new Passport regime would be contingent on two key policy changes — the introduction of a new collective investment vehicle, and the development of a competitive withholding tax regime.
It said that, additionally, taxation certainty should be provided to ensure that multi-currency class unit trusts could be operated effectively and that the benefits of future double taxation treaties should be afforded to all Australian collective investment vehicles.
“It is essential that Government decisions are taken on these items as soon as possible so that fund managers and service providers can prepare for the Passport’s 2017 commencement,” the submission said.
