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What is the The Taxation Laws Amendment (2006 Measure No. 1) Bill 2006 all about? |
What is the The Taxation Laws Amendment (2006 Measure No. 1) Bill 2006 all about? ENHANCING THE FOREIGN INCOME TAX ARRANGEMENTS FOR TEMPORARY RESIDENTS The Treasurer today announced improvements to the taxation arrangements for temporary residents which will give Australia one of the most competitive expatriate taxation regimes in the world. A foreign source income tax exemption for temporary residents was introduced into Parliament twice in 2002, but failed to pass the Senate because of Labor Party opposition. The Government announced it would re-introduce the measure in the 2005-06 Budget. The Taxation Laws Amendment (2006 Measure No. 1) Bill 2006 (the Bill) introduced today implements that announcement but goes further than the previously blocked legislation which was to apply a tax exemption to a temporary resident for a period of 4 years, only if the temporary resident had not been an Australian resident within the previous 10 years. The Government will now remove these time limits as they provide unnecessary disincentives and distortions for individuals wishing to remain working in Australia. The measure will now apply to holders of a temporary visa (excepting those who are directly or indirectly treated as residents for social security purposes). Holders of a temporary visa will not be taxed on foreign source income. They will continue to be taxed on all Australian source income and salary and wages generally, including income from employee shares or rights. Further, capital gains taxation of temporary residents will be aligned with non-residents. The combination of these changes will also ensure that the capital gains tax rules for departing residents do not apply to temporary residents. The changes will significantly reduce administrative and compliance costs. It will also further reduce the cost to Australian businesses of employing expatriates. The Government is committed to assisting businesses to access the skilled labour needed to compete internationally. These significant improvements have been welcomed in consultation with business and taxpayer representatives. CANBERRA 16 February 2006 Source(s): http://www.treasurer.gov.au/tsr/content/... |
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