Australia Considers Tax Exemptions for Sovereign Wealth Funds

Tax considerations influence sovereign wealth fund investment behavior.  Australia does not want to deter passive foreign investment, especially in a challenging economic environment. Australia is already a favorite destination for many SWFs due to its vast natural resources, mature real estate market, and transparent capital markets.  The Government of Australia is contemplating tax exemptions for sovereign wealth funds that possess passive investments in Australian assets.

Most nations agree that passive governmental investment is a plus for the economy.  When sovereign investors engage in commercial activity, most of the time, they lose their exemption with that source of income.  Other Western nations have already adopted exemptions for sovereign investors.  Tax exemption laws for sovereign wealth funds (foreign governmental investors) vary by country.  In the United Kingdom, foreign governments have sovereign immunity from UK tax, except in the case of commercial income.  [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]



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