Major reforms to foreign investment framework
As a part of these foreign investment reforms, the Government announced it was considering a new Register of Foreign Ownership of Australian Assets which would be administered by the ATO. On 10 December 2020, the proposed foreign investment reforms achieved Royal Assent.
Data relating to foreign investment is currently spread out across the government, making it challenging to identify investor trends and emerging risks.
The ATO currently administers the agricultural land and water registers which were implemented in 2015 and 2017 respectively. Under the Register of Foreign Ownership of Water or Agricultural Land Act 2015, a foreign person who has a registrable interest in water or in agricultural land is required to register that interest. The ATO also currently maintains a register of foreign owned residential land where registration requirements are imposed as part of the FIRB approval conditions.
The Australian Communications and Media Authority administers the Register of Foreign Owners of Media Assets and the Register of Critical Infrastructure Assets is administered by the Cyber and Infrastructure Security Centre (formerly Critical Infrastructure Centre).
The Register of Foreign Ownership of Australian Assets (new Register) was formally announced on 6 October 2020 in the 2020–21 Budget with the ATO being provided $24.3 million over four years to build and maintain the new Register. The Commissioner of Taxation has been appointed as Registrar of the new Register. The Register is expected to start on 1 July 2023, supported by Online services for foreign investors.
The new Register will amalgamate and expand existing registers administered by the ATO, provide a streamlined experience for foreign investors to manage their investment affairs, support compliance with Australia’s foreign investment framework and increase the Government's visibility of foreign investments made in Australia. Upon commencement of the new Register, the Register of Foreign Ownership of Water or Agricultural Land Act 2015 will be repealed.
Other than the introduction of the new Register, the foreign investment reforms have impacted other areas of the ATO's responsibility. These include:
- changes to the infringement notice regime by expanding the contraventions that can be subject to an infringement notice and the introduction of an additional infringement notice tier
- changes to the civil penalty amounts and the introduction of an additional civil penalty for providing false or misleading information or documentation in a foreign investment application, and
- increased the fees payable for foreign investment applications and variation fees.
The legislation that facilitated the foreign investment reforms was introduced into Parliament 28 October 2020 and achieved Royal Assent on 10 December 2020.
The following pieces of legislation amended the Foreign Acquisitions and Takeovers Act 1975 (FATA) and Foreign Acquisitions and Takeovers Fees Imposition Act 2015External Link respectively:
The Government’s foreign investment reforms announcement can be found on Treasury’s websiteExternal Link.
Foreign Investment Review Board website firb.gov.auExternal Link
On the 5 June 2020 Government announced the most comprehensive reforms to Australia’s foreign investment review framework in more than 20 years.