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  • Foreign Investment Reforms Working Group key messages 30 September 2019

    The Foreign Investment Reforms working group meeting was held on 30 September 2019.

    The information provided below is a summary of topics discussed at the meeting.

    Legislative update – Near-new Dwelling Exemption Certificate reconciliation payments

    In 2017 the government introduced Near-new Dwelling Exemption Certificates (NNDEC) for properties where a previous and binding sale agreement has failed to complete. These exemption certificates work similarly to New Dwelling Exemption Certificates (NDEC).

    Legislation is required to allow fees to be collected when a near-new dwelling is sold. The original Bill before Parliament to amend the Foreign Acquisitions and Takeovers Act 1975 was prorogued due to the 2019 election. The Bill remains a priority for government.

    The following issues were discussed:

    • The concept of the term ‘Near-new dwelling’, which will be defined in the Foreign Acquisitions and Takeovers Act
    • Developers already using Near-new Dwelling Exemption Certificates have been advised of proposed fees and the ATO will work with those affected when the law is passed.

    ATO Tax Consult process update

    Commercial foreign investment applications are scrutinised by the ATO Tax Consult team for the potential impact of an action on Australian tax revenues and the integrity of the tax system. The ATO recommends commercial foreign investment applications are submitted as early as possible to enable the ATO to assess the tax risk associated with the proposal. In the event that a commercial deadline prevents a full review from being undertaken, additional conditions are imposed.

    Foreign Acquisition Engagement and Assurance team

    • A new Foreign Acquisition Engagement and Assurance team has been created in the ATO to undertake post implementation reviews of high risk Tax Consult transactions. These reviews are expected to take approximately four months and be directed at Taxpayers in the public groups and international markets (excluding taxpayers in the Top 100 market who are already the subject of a Tax Assurance Report process). This is a centralisation of an existing process.
    • The ATO will attend events in Melbourne and Sydney hosted by the Institute of Chartered Accountants to provide information on the revised process.

    ATO Consultation Effectiveness Report

    As part of the corporate approach to consultation the ATO regularly reviews its consultation groups. The ATO Consultation and Effectiveness Measurement 2018-19 Final Report was sent to members of this group on 13 September 2019. Highlights of the report are available on ato.gov.au.

    Exemption Certificates

    Following feedback from the previous meeting the ATO has worked with Treasury to increase the effectiveness of residential Exemption Certificates by extending the period of exemption certificates to align with no-objection notifications. Exemption Certificates will now be valid for 12 months from Monday 4 November 2019.

    Further information is available in Guidance Notes 9 and 49 on firb.gov.auExternal Link.

    ATO Communications update

    New Dwelling Exemption Certificate compliance – The ATO has added guidance to its NDEC reporting form and delivered a NDEC Webinar on compliance. The webinar is available on the ATOtv websiteExternal Link or by searching tv.ato.gov.auExternal Link for NDEC.

    Changes to the NDEC reconciliation process have made them more efficient.

      Last modified: 11 Nov 2019QC 60562