The Macquarie Group has scored a rare victory in its battle with the Tax Office over its use of offshore subsidiaries, this time with the help of the new Assistant Treasurer Arthur Sinodinos.
This month, the Federal Court threw out a bid by Macquarie to stop the Tax Office issuing new tax bills for previous years over its use of offshore banking unit (OBU) deductions.
In a move designed to encourage Australian banks to expand overseas, profits generated by OBUs are taxed at 10 per cent rather than the usual rate of 30 per cent. But in the May budget the government announced restrictions on the use of the deduction to take effect from October 1.
It was concerned OBUs were being used to shelter domestic activities from tax.
Senator Sinodinos announced late on Sunday that the government would not proceed with the October 1 start date. Consultation had indicated the restriction "could affect commercial transactions that should still be eligible for offshore banking unit treatment," he said. He would "take the time necessary to properly consider all the issues".