Reforms to level the CGT playing field

Additionally, the reform would seek to support investment in clean energy by providing CGT concessions for assets that help achieve national clean energy objectives.

The proposed legislation would also include amendments clarifying that state and territory laws would not determine which assets were within the scope of the foreign resident CGT regime.

The federal government said the proposed legislation would bring Australia’s tax laws closer into alignment with the OECD Model Tax Rules, while aligning the tax treatment of foreign investors more closely with that of Australian residents.

Treasurer Jim Chalmers said that in their current form, the rules around CGT had created an air of uncertainty for foreign investors

“Clarifying the interaction with state and territory laws reinforces the original intent of the law and ensures that the CGT treatment for assets held by foreign investors applies consistently, regardless of the state or territory the asset is located in.”

“This will protect revenue by ensuring foreign residents disposing of an interest in large-scale infrastructure assets which are fixed on Australian land are subject to CGT,” Chalmers concluded.

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