The Financial Services Council has urged the Government to broaden the range of collective investment vehicles (CIV) available for foreign investors in order for Australia to reach its full potential as a financial services exporter.
The FSC said offshore investors were not always familiar with the nuts and bolts of the Australian unit trust as an investment vehicle and often favoured other jurisdictions such as Luxembourg, Ireland, and the UK, which have a variety of CIVs with an uncomplicated tax treatment.
Including other types of collective investment vehicles in Australia such as a corporate structure used in the UK, or a Luxemburg SICAV would allow Australia's financial services export market to grow, it argued.
The calls for CIVs came even as the FSC welcomed the new Managed Investment Trust Tax Regime, which was introduced into Parliament yesterday, saying it was the appropriate domestic avenue for financial services trade to grow.
FSC chief executive, Sally Loane, said less than five per cent of Australia's $2.6 trillion in funds under management currently came from overseas.
"There is much to win. We have the potential to significantly grow our financial services export market and to reap the benefits of economic growth and job creation," she said.
The new regime provided certainty on various technical tax issues including an attribution model for tax liabilities, certainty of treatment for unders and overs, deemed fixed trust treatment, and clarity on cost base adjustments and the treatment of tax deferred distributions.