On 9 May 2023, as part of the 2023–24 BudgetExternal Link, the Australian Government announced it will improve the integrity of the tax system by expanding the scope of the general anti-avoidance rule for income tax.
This measure is not yet law.
The general anti-avoidance rule for income tax will be expanded to include schemes that:
- reduce tax paid in Australia by accessing a lower withholding tax rate on income paid to foreign residents
- achieve an Australian income tax benefit, even where the dominant purpose was to reduce foreign income tax.
This measure will apply to income years commencing on or after 1 July 2024, regardless of whether the scheme was entered into before that date.
The Australian Government announced it will improve the integrity of the tax system by expanding the scope of the general anti-avoidance rule for income tax.