Jane Hume (Victoria, Liberal Party, Minister for Superannuation, Financial Services and the Digital Economy) Share this | Hansard source

I'm not entirely sure where I was up to in my summing-up speech, so I will quickly again run down the details of the Treasury Laws Amendment (2021 Measures No. 2) Bill 2021. Obviously, schedule 1 of the bill amends the Income Tax Assessment Act to require non-government entities seeking endorsement as a DGR to be a charity registered with the Australian Charities and Not-for-profits Commission or be operated by a registered charity. Ancillary funds and specifically listed entities will be exempt from this requirement. The requirement to be a charity already applies to the majority of DGR categories in subdivision 30-B and the measure will amend special conditions applying to the remaining general DGR categories, requiring non-government entities to maintain charity registration in order to retain their eligibility for DGR endorsement.

Schedule 2 of this bill contains amendments to the Income Tax Assessment Act that remove the preferential tax treatment provided by offshore banking units, which are commonly known as OBUs, and provide transitional arrangements for existing OBUs. In October 2018 the OECD Forum on Harmful Tax Practices found that Australia's OBU regime contains harmful features. As a result, the Treasurer announced in October 2018 that the government would seek to address the OECD's concerns. The OBU regime has been closed to new entrants since the Treasurer's announcement. Passing this bill will allow the OECD to confirm that Australia has amended the OBU regime to ensure that it is not a harmful tax practice. This is consistent with the Morrison government's ongoing support for international tax integrity and will protect Australia from potential reputational damage and other possible consequences. The bill provides for two years transitional arrangements to assist existing OBUs to transition away from the regime. I commend this bill to the Senate.