Since 1 July 2016, buyers have been required to withhold CGT on certain taxable Australian property they acquire from non-residents, including those with a market value of $750,000 or more.
Where the seller of these Australian assets is deemed a foreign resident, the buyer must pay 12.5 per cent of the purchase price to the ATO as a foreign resident capital gains withholding payment.
More than $500 million in CGT assessments have also been captured in compliance and engagement activity by the Tax Avoidance Taskforce over the last two years, including $290 million in cash collected through the government’s focus on property and other asset sales by multinationals and foreign residents.
Assistant Treasurer Michael Sukkar said the ATO’s real-time capabilities meant there would be no chance for non-residents to escape their CGT liabilities.
“Taken together, the decisive actions of this government have kept more than $1.3 billion in the country. The message is clear to multinationals and foreign residents: you can’t avoid paying your CGT,” Mr Sukkar said.
“The enhanced data analytics and technical expertise of the taskforce, led by the Australian Taxation Office, ensures that sales are identified and investigated more quickly than ever.
“The taskforce is now intervening and engaging with non-resident vendors in real time, ensuring that where it’s required, tax is collected on the spot before the sales proceeds can leave the country. In some instances, additional security has been sought over other assets to ensure foreign resident taxpayers meet their obligations.”
The taskforce’s compliance activity covers both direct property sales and sales of interests in companies and trusts whose assets are primarily property. The types of property include major infrastructure assets, agricultural assets, mining tenements, hotels and office towers.
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Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.