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Reforms to Offshore Banking Units

This consultation process has now been completed. Submissions available
Date
-
Consultation Type
Draft Legislation

Key Documents

On 6 November 2013, the Government announced that it would proceed with certain reforms to the Offshore Banking Unit (OBU) regime.These reforms address a number of integrity concerns with the existing regime while ensuring the OBU regime targets mobile financial sector activity.

The proposed amendments in the draft Bill:

  • limit the availability of the OBU concession in certain circumstances where it could otherwise be used to convert ineligible activity into eligible activity by trading in a subsidiary;
  • codify the ‘choice principle’ to remove uncertainty for taxpayers;
  • introduce a new method of allocating certain expenses between the operations of a taxpayer’s domestic banking unit and the OBU;
  • modernise the list of eligible activities; and
  • treat internal financial dealings (for example, between an Australian bank and its offshore branch) as if they were on an arm’s length basis.

Submissions

5 submissions were received for this consultation, including 2 confidential submissions.