CGT laws help government collect over $1bn

The government’s foreign resident capital gains tax (CGT) withholding laws have raised more than $1 billion since their introduction on 1 July 2016.

Under CGT laws, if a foreign resident sells their Australian assets they must pay 12.5 per cent of the purchase price to the ATO as a foreign resident capital gains tax withholding payment.

"Effectively, the law requires buyers to withhold CGT on land they acquire from non-residents. Key government measures such as these have ensured foreign multinationals and wealthy foreign family groups can’t skip out on their Australian capital gains tax," said Assistant Treasurer, Michael Sukkar.

Mr Sukkar revealed that more than half a billion dollars in CGT assessments have also been captured in compliance and engagement activity by the Tax Avoidance Taskforce over the last two years.

"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.

"The Tax Avoidance Taskforce we initiated and our foreign resident capital gains tax withholding laws, which both commenced 1 July 2016, have helped shut down opportunities for foreign entities who try to get their money out of the country before meeting their obligations," Mr Sukkar said.

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, Mr Sukkar said, 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.

"This is yet more proof that this government has put the laws in place and given the ATO the resources to make sure foreign entities doing business in Australia are meeting their tax obligations to the Australian community in full," Mr Sukkar said.