This proposal would eliminate the following withholding tax on interest paid by financial institutions operating in Australia to foreign residents.

• The standard interest withholding tax levied at the rate of 10 per cent
• The reduced interest withholding tax charged on Australian branches borrowing from their foreign parents as outlined in the Australia as a Finance & Technology Centre Advisory Group (AFTCAG) Report.

The proposal would have effect from 1 July 2022.