Foreign Investment stakeholder Group key messages 22 July 2021
Updates on Foreign Acquisitions and Takeovers reforms
John Breusch – Treasury
Reforms to the foreign investment framework took effect from 1 January 2021 following parliamentary passage on 10 December 2020.
Further updates have been made to the new guidance material published at firb.gov.au/guidance-notesExternal Link which consolidated 53 guidance notes to 15. The update aims to provide greater clarity to investors about their obligations under the foreign investment framework, including by addressing several issues identified since major reforms to the framework commenced on 1 January 2021.
Changes have been made to all Guidance Notes except the Conditions Reporting Guidance Note (G13). As with the last major update in December 2020, significant changes are identified in the documents with a sidebar down the right-hand margin.
In accordance with section 4 of the Foreign Investment Reform (Protecting Australia’s National Security) Act 2020, the Treasury is conducting an evaluation of the foreign investment reforms that commenced on 1 January 2021. The review is required to be completed by 10 December 2021 and will include the opportunity to make a formal submission. A consultation paper will be released on the Treasury websiteExternal Link.
Foreign Ownership of Australian Assets Register
Keir Cornish – ATO
On 6 October 2020 in the 2020–21 Federal Budget the new Register of Foreign Ownership of Australian Assets was formally announced. The ATO has been asked to develop the register. A Registrar is to be appointed by the Treasurer to administer the register under the new regime.
The existing registers – agricultural land, water and residential property – will merge and be expanded to include additional interests.
Benefits include, but are not limited to, increasing the government’s visibility of foreign investments in Australia to:
- improve the ability to identify investor trends and systemic issues to assist policy makers
- support making decisions on applications by assisting in the identification and assessment of national interest / national security risks.
Update on residential compliance
Jennifer Farley – ATO
The ATO is continuing to promote increased use of Exemption certificates for foreign investors of residential real estate and the benefits for foreign investors seeking approval.
A range of compliance strategies are being progressed to take into consideration the circumstances of foreign investor clients who may be impacted by COVID-19 travel restrictions. These strategies relate to:
- vacancy fee exemptions
- variations for those with expired temporary visas
- variations to extend the time to complete residential development.
The ATO has undertaken a prompter campaign to remind investors of the time period attached to the condition of foreign investment approval to construct residential property. Preliminary results indicate that the vast majority of recipients completed construction within the required time period or came forward to request a variation of conditions (fee applies) for extra time to finalise development.
ATO communications update
Joel Donoghue – ATO
The ATO has published content on New and Near New Dwelling Exemption Certificates to the ato.gov.au, which includes a reporting template for property developers, which was previously housed on the FIRB.gov.au website.
Three new webinar productsExternal Link have been published to atoTV that aim to educate audiences on how to comply with the Vacancy Fee program and how to apply for Exemptions Certificates. We intend to have these webinars translated to traditional and simplified Chinese.
The FIRB Annual ReportExternal Link has been published on FIRB.gov.au.
Inquiry into the Register of Foreign Ownership of Water entitlements
Jennifer Farley – ATO
The Productivity Commission (PC) published an Issues paper regarding the Register of Foreign Ownership of Water Entitlements (the Register) on 17 February 2021.
The inquiry is a legislative requirement to assess the effectiveness of the Register including how well it is meeting the Government’s goals, assessing its costs and benefits, and to make recommendations in relation to it.
The ATO continues to assist the PC with information on the administrative processes to collecting, vetting, quality assuring and reporting on foreign ownership of water and we understand the PC is looking to publish its draft report in August.
Summary of key topics discussed at the Foreign Investment Stakeholder Group meeting 22 July 2021.