The Government announced in the 2010-11 Budget that it would phase down the rate of interest withholding tax (IWT) for financial institutions from 2013-14.
This one-year deferral will mean that:
- The rate of IWT for foreign bank branches which borrow from their overseas head office will fall from 5 per cent to 2.5 per cent in 2014-15, and to zero in 2015-16
- The rate of IWT for other financial institutions which borrow from foreign financial institutions, and financial institutions which borrow from offshore retail deposits, will fall from 10 per cent to 7.5 per cent in 2014-15, and to 5 per cent in 2015-16.
The one year deferral will save $70 million in 2013-14 and $70 million in 2014-15.
To read more please visit my Treasury website.