Super funds want international tax treaty clarity

Mike Taylor

Managing Editor/Publisher, Financial Newswire

16 January 2023

At a time when Australian superannuation funds are investing directly in offshore assets, the Association of Superannuation Funds of Australia (ASFA) has reinforced with the Government the need to ensure they are not hamstrung by international treaty negotiations.

ASFA has responded to a Treasury review around a tax treaty network expansion by insisting that superannuation funds need to be clearly recognised under such arrangements.

The superannuation body is urging the insertion of a consistent definition of an Australian superannuation fund into all treaties, pointing out the need to ensure they are specifically exempt from tax in another country.

ASFA referenced early submissions to Treasury and repeated its points that Australia should ensure that:
• a consistent definition of ‘pension scheme’ or ‘superannuation fund’ is adopted into Australia’s tax treaties

• there is clear recognition of Australian superannuation funds as ‘persons’ or beneficial owners for treaty purposes
• treaties to which Australia is a party specifically exempt the income of an Australian superannuation fund from tax in the other country
• lump sum payments from Australian superannuation funds are appropriately treated as subject to withholding tax at source (that is, in Australia).

“We particularly wish to highlight the importance of the first point above. The insertion of a consistent definition of an Australian superannuation fund into all treaties to which Australia is a party would assist greatly with the application of those treaties and the facilitation of the global investment of Australian superannuation funds,” the ASFA submission said.