Key Documents
The Assistant Treasurer, the Hon David Bradbury MP, has released for public consultation the discussion paper Improving the Offshore Banking Unit Regime. This follows the 2013-14 Budget announcement of changes to the Offshore Banking Unit (OBU) regime within the broader context of a package of measures aimed at protecting the integrity of the corporate tax system. These changes, applicable from 1 October 2013 will seek to resolve integrity issues with the current regime, and also better target genuine mobile activities.
The OBU regime is a concessional tax regime that allows entities registered as OBUs, a reduced rate of taxation on certain non-resident to non-resident transactions. The Budget announcement outlined changes to the OBU regime to:
- treat dealings with related parties, including the transfer of transactions between the OBU and the domestic bank, as ineligible for OBU treatment;
- treat transactions between OBUs, including between unrelated OBUs, as ineligible for OBU treatment; and
- refine the current list of eligible OBU activities.
In addition to seeking comment on the above proposed changes the paper seeks comment on issues raised by the Johnson report. The purpose of this consultation is to provide interested parties with an opportunity to provide feedback on the proposed changes to the OBU regime. This feedback is valuable in developing legislation to make these changes to the regime.