International Taxation Arrangements


On 2 May 2002 the Treasurer announced details of a review of international tax arrangements concentrating on at least four principal areas:

  • the dividend imputation system’s treatment of foreign source income
  • the foreign source income rules
  • the overall treatment of ‘conduit income’
  • high level aspects of Double Tax Agreement (DTA) policy and processes

The Treasurer announced that the Board of Taxation would be undertaking public consultation on these issues following the public release of a paper prepared by the Treasury.

Consultation Paper

On 22 August 2002 the Treasurer released the consultation paper Review of International Taxation Arrangements, prepared by the Commonwealth Department of the Treasury.

The Chairman of the Board of Taxation welcomed the release of the consultation paper. The Board also announced details of the consultations that it planned to undertake on the paper.

The Board held a consultative seminar in Sydney on the 30 September 2002.

The Board requested written submissions on the Review of International Taxation Arrangements by 31 October 2002. All submissions received were acknowledged.

Board Report and Government Response

On 28 February 2003 the Board provided the report into the Review of International Taxation Arrangements to the Treasurer. The Treasurer released Volume 1 and Volume 2 of the Boards Report on 13 May 2003 (Volume 3 of the report involved confidential submissions which was not released by the Treasurer).

The Treaurer stated in his press release, ‘I would like to thank the Board for this crucial work in reviewing the complex area of international taxation law.

‘The package of reforms announced by the Government will improve the competitiveness of Australian companies with offshore operations. These reforms will reduce the costs of complying with the controlled foreign company (CFC) rules, reduce tax on foreign ‘active’ business income, and effectively reduce foreign taxes by modernising Australia’s tax treaties.

‘The reforms will encourage the establishment in Australia of regional headquarters for foreign groups and improve Australia’s attractiveness as a continuing base for our multinational companies. The reforms will also enhance the competitiveness and reduce the compliance costs of Australian based managed funds.’

Of the Board’s recommendations most were endorsed by Government, with some amendments not adopted or considered unnecessary or deferred (2.1(1), 2.1(1), 3.1(1), 3.1(2), 3.6 and 4.3 and 3.12) and some to be considered as part of the review of the foreign source income anti-deferral rules. Details of this later review can be found here.

For further information on this review please contact the Board of Taxation Secretariat on (02) 6263 4366 or at

Submissions received

Submitter Download
AJ Baxter and Associates 124KB
Association of Superannuation Funds of Australia 243KB
Australian Bankers' Association 1MB
Australian Custodial Services Association 598KB
Australian Institute of Company Directors 264KB
Australian Skandia 134KB
Australian Stock Exchange (attachment) 1020KB
Australian Stock Exchange (submission) 205KB
Barkoczy & De Silva 1MB
BHP Billiton 360KB
Boyd International 310KB
British American Tobacco 103KB
Business Coalition for Tax Reform 234KB
Business Council of Australia and the Corporate Tax Association (1) 863KB
Business Council of Australia and the Corporate Tax Association (2) 97KB
Clough Ltd 186KB
Corporate Super Association 221KB
Council of Small Business Organisations 88KB
CPA Australia 256KB
Deloitte & Touche LLP - Washington 149KB
Deloitte Touche Tohmatsu - Australia 692KB
Deloitte Touche Tohmatsu - NZ 221KB
Ernst & Young 589KB
Export Finance & Insurance Corporation 143KB
Fernandez, Prafula 1MB
Goodman Fielder 120KB
Grant Thornton 125KB
Institute of Chartered Accountants Australia (1) 365KB
Institute of Chartered Accountants Australia (2) 51KB
Institute of Chartered Accountants NZ 170KB
Insurance Council of Australia 73KB
International Banks and Securities Association of Australia 1MB
Investment & Financial Services Association (1) 538KB
Investment & Financial Services Association (2) 143KB
Joint 10 public companies 262KB
Lloyd-Smith, G 86KB
Mayo, Wayne 327KB
Minerals Council of Australia 1MB
National Institute of Accountants 87KB
NZ Corporate Taxpayer Group 158KB
PriceWaterhouseCoopers 239KB
Property Council of Australia 129KB
Rider, Cameron 97KB
Rio Tinto 212KB
Taxation Institute of Australia 387KB
Taylor, John 428KB
Telstra 377KB
Victorian Government Deptartment of Innovation 220KB
Western Australia Government 144KB
Westfield America Trust 237KB
Westfield Holdings 332KB
Westfield Trust 197KB