b'ESVDoing business in AustraliaAcquiring assets in AustraliaAcquisitions of real estate or businesses of strategic importance to Australia require approval from the Foreign Investment Review Board (FIRB). Governmental approval Witholding taxesThe FIRB examines proposals by foreign interests toWithholding tax must be deducted from interest, royalties undertake direct investment in Australia and makesand dividends (to the extent they do not have a tax credit) recommendation to the Government in respect to thosepaid to non-residents. The liability for the withholding tax transactions. rests with the Australian entity (payer). Annual reports of All acquisitions of vacant land including residential realitems subject to withholding tax are required to be lodged.estate, accommodation facilities, shares or units inPurchasers of real estate are required to withhold a Australian urban land corporations or trust estates andnon-final 12.5% withholding tax when dealing with non-direct investments by foreign governments or theirresidents. This requirement applies to all commercial agencies require approval, irrespective of the value or theproperty and for residential property valued at $750,000 or nationality of the investor. more.Other acquisitions have thresholds at or above whichThe rates of withholding vary but are broadly as follows:approval is required, depending on whether the investor is a US investor or non-US investor. Item Treaty Country Non-Treaty CountryInterest 10% 10%Acquisition costs Dividends 0% or 0-15% 0% or 30%Royalty 5%-15% 30%Transfers of property may be subject to stamp duty. The rate and scope of stamp duty varies from State to State but can add significantly to the acquisition price of assets,Double Tax Agreements (DTAs)particularly real estate.Depending on the State or Territory in which the asset isAustralia has an extensive tax treaty network, covering purchased, additional surcharges for non-residents mayEurope, the USA, Asia, and New Zealand.apply. Australia as ratified the Multilateral Instruments as part of Income derived from sources in Australia that is not subjectthe OECDs BEPS program impacting approximately half of to withholding tax is generally assessable and required toexisting DTAs.be declared in an annual income tax return.Non-residents are generally not subject to tax on capital gains made from the disposal of Australian assets except for direct and indirect holdings of real estate or mining rights.'