On 27 March 2018, the Government announced a package of measures to address risks to the corporate tax base posed by stapled structures and similar arrangements and limit access to concessions currently available to foreign investors for passive income.
The attached paper outlines the proposed conditions stapled entities must comply with to access the infrastructure concession and/or transitional arrangements.
The conditions include:
- The extension of existing integrity rules that apply to Managed Investment Trusts (MITs) to ensure that all staples are required to set their rent at arms’ length prices; and
- The introduction of statutory caps on the amount of cross-staple rent that is able to access the concessional rate of withholding tax (available under the MIT regime) for new and existing infrastructure projects during the transition or concession period.
Treasury is seeking feedback on the proposed integrity rules (no later than 12 July 2018) to inform the development of draft legislation.
The Government invites interested parties to make a submission.