Foreign Acquisitions and Takeovers Fees Imposition Amendment Act 2020

Administered by Department of the Treasury

Legislation au C2020A00115 In force Act

Legislation content

 

 

 

 

 

 

Foreign Acquisitions and Takeovers Fees Imposition Amendment Act 2020

 

No. 115, 2020

 

 

 

 

 

An Act to amend the Foreign Acquisitions and Takeovers Fees Imposition Act 2015, and for related purposes

 

 

Contents

1 Short title

2 Commencement

3 Schedules

Schedule 1—Amendments

Foreign Acquisitions and Takeovers Fees Imposition Act 2015

 

 

 

Foreign Acquisitions and Takeovers Fees Imposition Amendment Act 2020

No. 115, 2020

 

 

 

An Act to amend the Foreign Acquisitions and Takeovers Fees Imposition Act 2015, and for related purposes

[Assented to 10 December 2020]

The Parliament of Australia enacts:

1  Short title

  This Act is the Foreign Acquisitions and Takeovers Fees Imposition Amendment Act 2020.

2  Commencement

 (1) Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.

 

Commencement information

Column 1

Column 2

Column 3

Provisions

Commencement

Date/Details

1.  The whole of this Act

The later of:

(a) the day after this Act receives the Royal Assent; and

(b) the day Schedule 1 to the Foreign Investment Reform (Protecting Australia’s National Security) Act 2020 commences.

However, the provisions do not commence at all if the event mentioned in paragraph (b) does not occur.

1 January 2021

(paragraph (b) applies)

Note: This table relates only to the provisions of this Act as originally enacted. It will not be amended to deal with any later amendments of this Act.

 (2) Any information in column 3 of the table is not part of this Act. Information may be inserted in this column, or information in it may be edited, in any published version of this Act.

3  Schedules

  Legislation that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.

Schedule 1—Amendments

 

Foreign Acquisitions and Takeovers Fees Imposition Act 2015

1  Subsection 4(1)

Repeal the following definitions:

 (a) definition of base amount;

 (b) definition of base financial year.

2  Subsection 4(1)

Insert:

indexation factor has the meaning given by section 8.

3  Subsection 4(1) (definition of indexed amount)

Repeal the definition.

4  Subsection 4(1) (definition of index number)

Repeal the definition, substitute:

index number has the meaning given by section 9.

5  Subsection 4(1) (definition of internal reorganisation)

Repeal the definition.

6  Subsection 4(1) (definition of quarter)

Repeal the definition, substitute:

quarter means a period of 3 months ending on 31 March, 30 June, 30 September or 31 December.

7  Part 2

Repeal the Part, substitute:

Part 2—Imposition and amounts of fees

 

5  Imposition of fees

  A fee payable under:

 (a) Part 6 (fees in relation to actions); or

 (b) Part 6A (vacancy fees for foreign acquisitions of residential land);

of the Foreign Acquisitions Act is imposed as a tax by this section.

6  Amounts of fees

 (1) The amount of a fee imposed by section 5 is the amount worked out in accordance with regulations made for the purposes of this subsection.

 (2) Without limiting subsection (1), the regulations may do one or more of the following:

 (a) specify an amount or a method for determining an amount;

 (b) specify different amounts or methods for:

 (i) different kinds of fees; or

 (ii) different kinds of persons liable to pay a kind of fee; or

 (iii) different kinds of circumstances giving rise to the liability to pay a kind of fee;

 (c) specify a nil amount, or a method resulting in a nil amount;

 (d) specify a method for a kind of fee when such a fee is one of 2 or more fees payable in relation to a single agreement;

 (e) specify a method for a kind of fee payable in relation to an action if that action is covered by more than one provision of the Foreign Acquisitions Act or Foreign Acquisitions Regulation (because the action is an action of more than one kind);

 (f) specify a method for a kind of fee that:

 (i) initially determines an amount; and

 (ii) later determines a lower replacement amount (including a nil amount) if specified circumstances arise after the fee becomes payable.

Paragraphs (c) to (f) do not limit paragraph (b).

Note: A method for determining an amount could, for example, include:

(a) indexation; or

(b) providing for a lower amount if certain circumstances exist; or

(c) reducing the amount to nil if another person who is jointly and severally liable for the fee pays the fee.

Cap on the amount of a fee

 (3) The amount of a fee imposed by section 5 must not exceed $1 million.

7  Indexation of fee cap

 (1) The amount referred to in subsection 6(3) is to be indexed on the first day of each financial year starting on or after 1 July 2021. The amount is indexed by multiplying it by its indexation factor.

 (2) If after indexation the amount is not a multiple of $100, round down the indexed amount to the nearest multiple of $100.

 (3) If the indexed amount worked out under subsection (1) for a financial year (the current year) (after any rounding under subsection (2)) is less than the indexed amount for the previous financial year, the indexed amount for the current year is the indexed amount for the previous financial year.

8  Indexation factor

 (1) The indexation factor is:

 (2) Work out the indexation factor to 3 decimal places (rounding up if the fourth decimal place is 5 or more).

Example: If the factor is 1.102795, it would be rounded up to 1.103.

9  Index number

  The index number for a quarter is the All Groups Consumer Price Index number (being the weighted average of the 8 capital cities) first published by the Australian Statistician for the quarter.

8  Application of amendments

The amendments made by this Schedule apply in relation to fees that become payable on or after 1 January 2021.

 

 

 

 

[Minister’s second reading speech made in—

House of Representatives on 28 October 2020

Senate on 8 December 2020]

 

(131/20)

 

Overview

The Foreign Acquisitions and Takeovers Fees Imposition Amendment Act 2020 was enacted by the Parliament of Australia to amend the Foreign Acquisitions and Takeovers Fees Imposition Act 2015, addressing a gap in the regulation of foreign investments in Australia. The Act introduces changes to the imposition and amounts of fees related to foreign acquisitions and takeovers, ensuring the fees are imposed as a tax and allowing for flexibility in fee determination through regulations. The policy objective is to provide a robust regulatory framework to protect Australia’s national security by addressing potential vulnerabilities in foreign investments. The Act came into effect on 1 January 2021, contingent on the commencement of the Foreign Investment Reform (Protecting Australia’s National Security) Act 2020. The Foreign Acquisitions and Takeovers Fees Imposition Amendment Act 2020 also introduces an indexation mechanism for the fee cap, ensuring that the cap on fees remains responsive to inflation and economic changes. This amendment aims to maintain the effectiveness of the regulatory framework over time, allowing for adjustments to the fee cap based on the All Groups Consumer Price Index. The Act's amendments apply to fees that become payable on or after 1 January 2021, reflecting a proactive approach to safeguarding Australia's economic and security interests from potential foreign investment risks.

Scope and Application

The Foreign Acquisitions and Takeovers Fees Imposition Amendment Act 2020 amends the Foreign Acquisitions and Takeovers Fees Imposition Act 2015, altering the regulatory framework for fees imposed on foreign acquisitions and takeovers in Australia. This Act applies to any person or entity subject to the fees under the amended Act, affecting industries and transactions involving foreign investment in Australian businesses and assets. Geographically, it applies across the Commonwealth of Australia, ensuring uniformity in the application of foreign investment fees. The amendments, which commenced on 1 January 2021, modify definitions, the imposition of fees, and the calculation of fee amounts, including the introduction of an indexation mechanism for the fee cap. Notably, the Act does not specify any exclusions or exemptions, meaning that all qualifying transactions are subject to the fees unless otherwise regulated by subordinate instruments. Regulations may further define specific fee amounts, methods of calculation, and other operational details to implement the amended provisions effectively.

Key Provisions

The Foreign Acquisitions and Takeovers Fees Imposition Amendment Act 2020 (C2020A00115) amends the Foreign Acquisitions and Takeovers Fees Imposition Act 2015. It repeals and replaces several definitions previously found in section 4(1) of the Act, including the definitions of base amount, base financial year, indexed amount, index number, and internal reorganisation. It also alters the definition of quarter, now specifying that it is a period of three months ending on 31 March, 30 June, 30 September, or 31 December. Additionally, Part 2 of the Act is repealed and replaced with new provisions regarding the imposition and amounts of fees. The Act imposes several obligations on parties and entities it governs. Firstly, it mandates that fees payable under Part 6 (fees in relation to actions) or Part 6A (vacancy fees for foreign acquisitions of residential land) of the Foreign Acquisitions Act are imposed as a tax. The Act further dictates that the amount of such fees is determined according to regulations made under the Act, which can specify various methods and amounts based on different circumstances and categories. Furthermore, it imposes a cap on the amount of a fee, ensuring that it does not exceed $1 million. Additionally, the Act requires the fee cap to be indexed annually starting from 1 July 2021, with specific rules for rounding and adjustments if the indexed amount decreases. The Act also outlines specific consequences for non-compliance. While the exact nature of offences, penalties, or civil/criminal consequences for breaches of this Act are not detailed in the provided text, the general structure of Australian legislative language suggests that breaches could lead to fines, imprisonment, or other penalties as prescribed by the relevant sections of the Act or other applicable laws. The maximum penalties, if specified, would be detailed in the relevant regulations or other legislative instruments. In summary, the Foreign Acquisitions and Takeovers Fees Imposition Amendment Act 2020 introduces significant changes to the definitions and procedures governing foreign acquisition and takeover fees, imposes specific obligations on entities liable for such fees, and implies that there are penalties for non-compliance, although the exact nature of these penalties is not specified in the provided text.

Legal classification tags

Area of Law
Commercial Law
Instrument
Act
Concepts
Commencement Provisions
Regulatory Standards
Indexation of fee cap

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.