Joe Ludwig (Queensland, Australian Labor Party, Minister for Agriculture, Fisheries and Forestry) Share this | Hansard source

I move:

  That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows—

Tax Laws Amendment (Managed Investment Trust Withholding Tax) Bill 2012

This bill makes consequential amendments to the Tax Administration Act 1953 to give effect to changes to the managed investment trust final withholding rate.

The Income Tax (Managed Investment Trust Withholding Tax) Amendment Bill 2012 (currently before the House of Representatives) amends the Income Tax (Managed Investment Trust Withholding Tax) Act 2008 to increase the managed investment trust final withholding tax rate to 15 per cent to fund payments. The changes will apply to income years commencing on or after 1 July 2012.

Fund payments made by a managed investment trust to non-resident investors, subject to certain conditions, are currently subject to the managed investment trust withholding tax of 7.5 per cent.

The 15 per cent withholding tax for managed investment trusts is still competitive with rates applying in other countries.

It is consistent with the Government's original commitment prior to the 2007 election.

And it is significantly lower than the 30 per cent non-final withholding tax that applied under the previous Government.

Increasing the managed investment trust final withholding tax from 7.5 per cent to 15 per cent better balances the need for Australia to be an attractive destination for foreign investment with ensuring Australia receives a fair return on profits to be made in Australia.

I commend the bill to the Senate.

Income Tax (Managed Investment Trust Withholding Tax) Amendment Bill 2012

This bill amends the Income Tax (Managed Investment Trust Withholding Tax) Act 2008 to increase the managed investment trust (MIT) final withholding tax rate to 15 per cent to fund payments made in relation to income years commencing on or after 1 July 2012.

Fund payments made by a managed investment trust to non resident investors, subject to certain conditions, are currently subject to a managed investment trust withholding tax of 7.5 per cent.

Increasing the final withholding tax on managed investment trust distributions from 7.5 per cent to 15 per cent better balances the need for Australia to be an attractive destination for foreign investment whilst still ensuring Australia receives a fair return on profits generated in Australia.

The 15 per cent withholding tax for managed investment trusts is still competitive with rates in other countries, consistent with the Government's original 2007 election commitment, and significantly lower than the 30 per cent non-final withholding tax that applied under the previous Government.