• Service: Tax
  • Industry: Financial Services, Investment Management
  • Type: Regulatory update
  • Date: 15/04/2013

Tax Insights

KPMG's analysis of tax issues and developments.

Jenny Clarke

Jenny Clarke
Partner, Tax

+61 2 9335 7213

Investment manager regime 

by Jenny Clarke, Financial Services Specialist

Pleasingly, after nearly 15 months the Australian Government released an Exposure Draft (ED) legislation in relation to Stage 3 of the Investment Manager Regime (IMR) on 4 April 2013.

Generally, the ED has taken into account many of the changes suggested by various lobby groups which will have a positive effect on investment by foreign funds. Whilst foreign funds still need to be widely held, it is now possible to trace and prove this test.


Further, the IMR also now provides some protection to foreign funds that are resident of countries with which Australia has an Exchange of Information Agreement. Unfortunately, however, non Exchange of Information countries will not receive the benefits of this new legislation.


In addition, a number of technical issues arising from IMR 2 have been rectified and the exemption has been significantly extended to ensure (with the exception of real property interests) there will be generally an exemption from Australia tax.


Disappointingly, the ED has some substantial annual reporting requirements for a foreign fund. Details of the information to be provided to the Australian Taxation Office (ATO) have not yet been set out but we have significant concerns the information required will be extremely onerous in practice, resulting in the foreign fund not being entitled to the exemption.


KPMG remains a participant in the consultation process.


Comments are due 26 April 2013.


Please contact your tax adviser on any issues on this new regime.


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