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This draft legislation gives effect to Australia’s commitments under the Australia-India Economic Cooperation and Trade Agreement (“AI-ECTA”) signed in April 2022.
Australia’s right to tax such income was affirmed in the Federal Court decision in Satyam Computer Services Limited v Commissioner of Taxation [2018] FCAFC 172. This decision created sufficient concern amongst Indian IT services multinational businesses that inter-Governmental discussions were required to address the issue, resulting in the proposed changes as outlined by us previously.
The proposed effective date for these changes is the later of the date of Royal Assent of this draft legislation and the date the AI-ECTA enters into force.
Treasury invited submissions from stakeholders on this draft legislation which closed on 8 August 2022.
If you wish to discuss this draft legislation further, please contact us.
Foreign resident CGT reforms expand taxable Australian real property, withholding and renewables discount.
The ATO’s draft PCG 2026/D1 introduces a new compliance framework for attributing risk weighted assets to Australian branches of foreign banks, reshaping thin capitalisation methodologies and documentation expectations.
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