Recommendations
Recommendation 1
2.18 The
committee recommends that in order to prevent tax revenue leakage and market
distortions, the government undertake an extensive review of the tax arrangements
applying to foreign investments and acquisitions in the agricultural sector.
Recommendation 2
2.23 The
committee recommends that as part of the broader review outlined in Recommendation
1, the government should review Australia's tax laws that apply to tax
exemptions for not-for-profit activities for foreign entities. The review
should examine ways to prevent tax revenue leakage when foreign government
entities undertake agricultural production in Australia for humanitarian
purposes or for food security.
Recommendation 3
2.24 The
committee recommends that the government require that any non‑commercial
production from agricultural land and businesses by foreign government entities
(including for the purposes of food security) is undertaken within relevant
Australian Government foreign aid programs.
Recommendation 4
2.36 The
committee recommends that as part of the broader review outlined in Recommendation
1, the government should investigate ways of developing more rigorous tax
liability arrangements for both government-owned and private foreign entities,
particularly in relation to capital gains and passive income. In this regard,
further efforts should be considered to limit the scope for foreign investors
to use business structures, and other possible loopholes, not available to
domestic competitors in order to reduce their tax burden.
Recommendation 5
2.46 The
committee recommends that as part of the broader review outlined in Recommendation
1, the Government review the tax barriers for Australian organisations that
limit Australian investment in long-term development projects in Australian
agriculture. The review should explicitly compare tax arrangements for domestic
entities to those faced by potential foreign investors in Australian agriculture.
The review should also consider possible reforms of tax regulation to improve
incentives for Australian capital investment in agriculture.
Recommendation 6
3.8 The
committee recommends that the government undertake a review of the Foreign
Acquisitions and Takeovers Act 1975 with the aim of developing
proposed amendments that address contemporary issues of foreign investment,
particularly in agriculture.
3.9 The
review should specifically consider:
- the definition of 'rural
land' and 'urban land';
- drawing a distinction
between the treatment of rural land and agricultural business; and
- any limitations that the Foreign Acquisitions and Takeovers Act 1975 may place, either
explicitly or implicitly, on the Foreign Investment Review Board's ability to
effectively review the level and nature of foreign investment activities in
Australia.
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