Implications of the conduit foreign income regime for foreign investors

Abstract

The new conduit foreign income rules, are designed to remove an Australian tax liability on foreign sourced income, where that income is ultimately distributed to non-resident investors. They are aimed at improving Australia as an investment choice for foreign investors. The law allows restricted conduit relief for certain foreign dividend income received by Australian companies that are on-paid to non-resident shareholders. The changes introduced aim to expand these provisions to: provide relief for all forms of foreign income; and expand the circumstances where conduit income can flow through Australian companies.