Reuters | 23 February 2016
Chinese investor is first under new Australian tax rules
Chinese investor is first under new Australian tax rules
By Colin Packham
SYDNEY Feb 23 (Reuters) - A Chinese investment firm has won approval to buy Australia's oldest dairy farm, making it the first overseas company to be subject to new rules aimed at ensuring foreign companies pay tax on their Australian earnings.
The Australian government on Monday introduced new regulations under which foreign investors would have to comply with Australian tax laws and tax office directions to provide information or face sanctions.
Australian Treasurer Scott Morrison on Tuesday approved the A$280 million ($202 million) purchase of Tasmania-based Van Diemen's Land Co by China's Moon Lake Investment.
"It will ensure increased employment and investment in an important industry sector in Tasmania, while the safeguards we have put in place will ensure they pay their tax," Morrison said in a statement.
Moon Lake will be required to advise the tax office if it enters into any transactions with non-residents to which the transfer pricing or anti-avoidance measures of Australian tax law applies.
Failure to do so could result in prosecution, fines and potentially divestment of the asset, Morrison said.
The rule changes follow pressure to ensure multinational companies are not able to shift profits to low-tax havens to avoid paying more tax in Australia.
Foreign acquisitions of Australian agriculture are also politically sensitive, and to help alleviate concerns Moon Lake said it will honour current supply agreements.
The sale of the Australia's largest cattle ranch to Chinese firms was blocked in November by Morrison, who said the assets including area the size of South Korea should remain in Australian hands.
($1 = 1.3860 Australian dollars) (Reporting by Colin Packham; Editing by Richard Pullin)
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AFP | 23 February 2016
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AFP | 23 February 2016
Sydney (AFP) - A Chinese investor was Tuesday given the green light to buy Australia's largest dairy farm company, with the finance minister saying he welcomed foreign investment "not contrary to our national interests".
The sale of farmland to foreigners including to Australia's biggest trading partner China has been a sensitive issue, with Canberra in November blocking the sale of one of the world's largest cattle estates to Chinese companies.
Chinese businessman Lu Xianfeng, who owns an Australian window blind maker and founded a Shenzhen-listed engineering company, made a Aus$280 million (US$202 million) bid for the Tasmanian-based and New Zealand-owned dairy business in November.
Australian Treasurer (finance minister) Scott Morrison said the Tasmanian Land Company (TLC) Group -- which owns the 190-year-old dairy business Van Diemen's Land Company -- had always been held by foreigners.
"I am satisfied that the Moon Lake proposal to purchase TLC is not contrary to the national interest," Morrison said in a statement, referring to Lu's company.
"It will ensure increased employment and investment in an important industry sector in Tasmania, while the safeguards we have put in place will ensure they pay their tax.
"Australia continues to welcome and support foreign investment that is not contrary to our national interests."
Van Diemen's current owner, New Zealand's New Plymouth District Council, welcomed the approval.
Lu said in a statement he was committing to expanding the business, which owns and operates 25 dairy farms including some 30,000 livestock, and increasing its workforce.
Some independent politicians had opposed the sale to Lu, saying prime dairy land should be in Australian hands.
Federal Independent MP Andrew Wilkie from Tasmania said the decision was "disappointing and not in the public interest".
"Today's news just confirms the fact that the government either doesn't understand or doesn't care about the importance of Australian ownership of strategic assets," he said in a statement.
Australia's TasFoods Limited had made a failed bid for the company, while a Tasmanian businesswoman had also expressed interest.
