Taxation and its Implications for Foreign Investors in the Agricultural Sector in Australia

Running head: TAXATION
Taxation
Name of the Student
Name of the University
Author Note

TAXATION1
Introduction
There has been several controversial aspects presented against the concept of investment in the
agricultural sector belonging to Australia. The issue arises with respect to the foreign Investments that are
being made in the Australian sector of agriculture in relation to the approvals that are required to be
availed. The transparency along with the accountability of the parties involved is to be taken into account
in this context. There have been many apprehensions posed by the public with respect to the feasibility to
approve foreign investments in in sector of agriculture. On the other hand foreign Investments have an
immense significance with respect to the Australian prosperity1. It extends and assistance towards the
Australian economy and have the prospect of improving the welfare of Australian population. This
wellbeing is ensured as foreign investment give support to the growth of financial nature of the nation.
Any foreign individual having an interest of investing in any of the fields of agricultural sector, residential
estates along with water entitlements is to accompany their investment with a prior approval being taken
from the Foreign Investments Review Board (FIRB) for the purpose of making the investment registered
in Australian Taxation Office (ATO)2. This paper will be discussing the tax treatments along with its
implication with respect to foreign investors investing within the agricultural sector in Australia. It will
analyse the definition of the term foreigners under the Australian taxation regime and present a
comparison between the tax treatments applicable to foreigners as well as residence. It will discuss the
recommendations that can be presented against the reforms prevailing at recent times with respect to the
tax implications for foreigners.
Discussion
The determination of the treatment under the taxation along with implications of the same the
analysis of the foreigners who have been investing in the territory of Australia in agricultural sectors
needs to be carried out along with an analysis of the contemplation of foreigners as provided in the
1 Oliver, Alex. "Understanding Australian attitudes to the world." (2018).
2 Gertel, Jörg, and Sarah Ruth Sippel. "The financialisation of agriculture and food." (2016) Routledge international
handbook of rural studies: 215-226.

TAXATION2
taxation law in Australia3. As for the definition of the term foreigner is concerned, any person who does
not come under the purview of the definition of resident as provided under s 6.1, ITAA 97, will have the
contemplation of being treated as a foreigner. The income belonging to a foreigner will only be subject to
taxation in Australia if it can be established that the source of such income has arising from the subject
matter located within the precincts of Australia. When a source of earning has been located in Australia
all the earnings accruing from such resource will be subject to taxation under the Australian taxation laws
only and no regard is required to be given towards the residency of that individual accrued with that
earning4. Any income that has been accrued to a foreigner having a source located within the boundaries
of Australia need to have tax consequences under the loss of Australian taxation. The non-residence in
Australia also to be subject to taxation with respect to all their income that have been accrued from
Australian territories. Any foreign individual having an interest of investing in any of the fields of
agricultural sector, residential estates along with water entitlements is to accompany their investment with
a prior approval being taken from the Foreign Investments Review Board (FIRB) for the purpose of
making the investment registered in Australian Taxation Office (ATO)5.
Foreigner Meaning
The foreigners who are willing to invest in agricultural properties belonging to Australia are
required to make an application for availing approval from FIRB before making such an investment.
After making the investment the land as well as the water needs to be registered with the board
immediately. There are certain requisites as provided in the Foreign Acquisition and Takeover Act 1975,
s 4, which are required to be complied with while assessing the individual to be rendered as a foreign
person within Australia as to the concept of foreign investment is concerned6. Any individual who cannot
3 Xiao, Lin. "Investment and Supervision Systems in SFTZ." (2016) National Test. Springer, Singapore,. 99-132.
4 Sippel, Sarah Ruth. "Food security or commercial business? Gulf State investments in Australian agriculture."
(2015) The Journal of Peasant Studies 42.5: 981-1001.
5 Sippel, Sarah Ruth, Nicolette Larder, and Geoffrey Lawrence. "Grounding the financialization of farmland:
perspectives on financial actors as new land owners in rural Australia." (2017) Agriculture and Human Values 34.2:
251-265.
6 Ruth Sippel, Sarah. "Financialising farming as a moral imperative? Renegotiating the legitimacy of land
investments in Australia." (2018) Environment and Planning A: Economy and Space 50.3: 549-568.