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Issue 532, 1 May 2014 

In this issue:

Commission of Audit report 

The Commission of Audit report was published today containing a combination of long-term and shorter-term recommendations. 

Specifically, the National Commission of Audit was asked to provide advice on how best to ensure government spending is as efficient and as well targeted as possible. The report is not a report by the government, but rather a report to the government. The report is available here. 

Of interest to trustees will be the following areas, as these recommendations have the potential to impact superannuation fund members: 

As this is only a report to the government, it is now up to them to decide whether or not they take up any of the recommendations in the forthcoming budget. ASFA’s initial response to the report is contained in a media release available here. 

A link to the press release by the Treasurer is available here. 


FATCA: Australia and US sign intergovernmental agreement 

On 28 April 2014, the Australian Government entered into an intergovernmental agreement (IGA) with the United States (US) to improve international tax compliance and implement the Foreign Account Tax Compliance Act (FATCA). 

FATCA was enacted by the US Congress to detect US taxpayers who use accounts with offshore financial institutions to conceal income from the US Internal Revenue Service (IRS). 

Under Annex II of the IGA the following superannuation entities are to be treated, for FATCA purposes, as Non-reporting Australian Financial Institutions, and as exempt beneficial owners: 

  1. a superannuation entity or public sector superannuation scheme or exempt public sector superannuation scheme, as defined in the Superannuation Industry (Supervision) Act or a constitutionally protected fund as defined in the Income Tax Assessment Act 1997 (ITAA 1997) 
  1. a pooled superannuation trust as defined in the ITAA 1997 
  1. any entity that is wholly owned by, and conducts investment activities, accepts deposits from or holds financial assets exclusively for the benefit of, an entity listed in 1 or 2 above. 

The effect of the IGA is that Australian superannuation funds will not be required to register with, or report to, the US IRS for FATCA purposes. 

ASFA has been working closely with the Australian Treasury over an extended period of time to achieve the above outcome. 

Please note: Funds will still be required to complete the new W-8BEN-E form for certain investments. ASFA is trying to determine when the instructions for completing the new W-8BEN-E form will be released, and is also seeking clarification as to how items five and eight to ten should be completed by Australian superannuation funds. 

Any questions should be directed to ASFA’s principal policy adviser, Robert Hodge. 


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