On 12 March 2021, then Treasurer, the Hon Josh Frydenberg MP, announced that the Government would introduce legislation to remove the preferential tax treatment for offshore banking units and close the regime to new entrants.
This announcement was made in response to concerns raised by the OECD’s Forum on Harmful Tax Practices (FHTP) in October 2018, relating to the concessional 10 per cent tax rate and ring-fenced nature of the regime.
A regulation impact statement (RIS) was not completed in 2021 as the then Prime Minister granted an exemption from the requirement to complete a RIS. The Australian Government’s regulatory impact analysis requirements stipulate that, under these circumstances, a post-implementation review is to be completed within two years of the relevant legislation being enacted (which occurred in September 2021).