Tax Insights


Foreign resident CGT withholding regime

Tax insights

On Thursday, 3 December 2015, the last parliamentary sitting day for 2015, the Government introduced the Tax and Superannuation Laws Amendment (2015 Measures No. 6) Bill 2015 (the Bill) into parliament. The Bill contains a foreign resident withholding regime designed to boost compliance with Australia’s capital gains tax (CGT) laws by foreign residents who dispose of direct interests in taxable Australian real property or indirect Australian real property interests. The proposed measure imposes an obligation on the purchaser to remit 10 per cent of the total purchase price to the Commissioner of Taxation. 
The tax withheld/remitted is not a final tax – the foreign resident vendor will still be required to lodge an Australian income tax return and will receive a credit for the amount remitted by the purchaser.

The proposed measure is to apply to CGT events that happen on or after 1 July 2016, regardless of whether the asset is held on revenue or capital account.

Foreign resident CGT withholding regime
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