Australia lowers Managed Investment Trusts (MITs) withholding tax for Swiss investors

Current Situation

Swiss investors currently investing into Australian Managed Investment Trusts (MITs) have not been able to benefit from the reduced 15% withholding tax rate despite Switzerland having implemented the automatic exchange of information with Australia, the reason was that the Australian government had not updated the list of eligible countries yet.

Update of list of countries with beneficial withholding tax rates

The Australian government has now announced that it will update the list of countries whose residents are eligible to access a reduced withholding tax rate of 15 per cent, instead of the default rate of 30 per cent, on certain distributions from Australian MITs. Listed countries are those which have established the legal relationship enabling them to share taxpayer information with Australia. The update will add the 56 jurisdictions that have entered into information sharing agreements since 2012.

Effective from 1 January 2019

The updated list will be effective from 1 January 2019. This measure supports the operation of the MIT withholding tax system by providing the reduced withholding tax rate only to residents of countries that enter into effective information sharing agreements with Australia.

Take away

Swiss investors investing in Australian MITs should ensure that they will benefit from the reduced tax rates. For certain structure the investment through an MIT might become an attractive alternative given the lower withholding tax rate.

We are happy to review your Australian investment structure to ensure they are as tax efficient as possible.

Contacts

Victor Meyer
+41 58 792 43 40
victor.meyer@ch.pwc.com

Benjamin De Zordi
+41 58 792 43 17
benjamin.de.zordi@ch.pwc.com

Regula Haefelin
+41 58 792 25 24
regula.haefelin@ch.pwc.com

Silvan Amberg, CFA, CAIA
+41 58 792 44 59
silvan.amberg@ch.pwc.com

Published by

Victor Meyer

Victor Meyer
Birchstrasse 160
8050 Zürich
Telefon: +41 58 792 43 40

Victor Meyer is leading the Financial Services Tax and Legal Practice in Switzerland. He is a lawyer (lic.iur.HSG) and Swiss Certified Tax Expert.

He has over 24 years of experience in domestic and international corporate, product and operational tax structuring with a special focus on the banking, asset management and real estate industry.