Reforms to the offshore banking unit regime

Reforms to the offshore banking unit (OBU) regime, applicable from 1 July 2015, have now been enacted.

The reforms include:

  • limiting the availability of the OBU concession by constraining the ability for the domestic bank to transfer ownership of a foreign subsidiary to the OBU
  • codifying the ‘choice principle’ to remove uncertainty for taxpayers
  • updating the method of allocating certain expenses between the taxpayer’s domestic banking unit and the OBU
  • modernising the list of eligible OB activities (e.g. by including offshore leasing arrangements), and
  • ensuring internal financial dealings are priced on an arm’s length basis.

Legislation and supporting material

Tax and Superannuation Laws Amendment (2015 Measures No. 1) Bill 2015 was passed by parliament on 17 June 2015 and received royal assent on 25 June 2015. You can access the legislation hereExternal Link.

Media releases

For more information, refer to:

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    Last modified: 07 Jul 2015QC 34699