Technical Update:

Proposed introduction of a new withholding regime

19 February 2016

The Government has introduced into Parliament legislation for a foreign resident CGT withholding regime. The legislation gives effect to a November 2013 announcement and requires purchasers of certain Australian assets from foreign residents to pay ten per cent of their cost base in the asset (essentially the purchase price) to the Commissioner, in the form of a non-final withholding tax. The purchaser is then entitled to withhold the amount from any amount owed to the vendor.