The Australian Government introduced on 9 February legislation into the Parliament to implement the Diverted Profits Tax (text of the bill and explanatory memoranda).

In a press statement released last week, the Australian Treasury noted that “the Diverted Profits Tax will not apply to managed investment trusts or similar foreign entities, sovereign wealth funds and foreign pension funds. These entities have been excluded as they are low risk from an integrity perspective, are widely held and undertake passive activities. This exclusion also ensures that such entities do not face an unnecessary compliance burden as a result of the introduction of the Diverted Profits Tax”. The new tax was announced in the 2016-17 Budget and will commence on 1 July 2017. For further information, please contact Paul Hale or Enrique Clemente.