Second Reading Speech
Mr Bradbury (Assistant Treasurer and Minister Assisting for Deregulation)I move:
That this bill be now read a second time.
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 nonresident 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.
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