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Summary & Clarification of IWT on TCorp Domestic BondsSummary & Clarification of Interest Withholding Tax on TCorp Domestic Bonds
Release date:08 Jan 2009 On 9 December 2008, legislative amendments extending eligibility of the s.128F Interest Withholding Tax (IWT) exemption to TCorp’s domestic bonds came into effect.
The amendments apply to interest payments made on or after 9 December 2008, which means all domestic bonds, whether issued before or after that date, are eligible. The amendments do not automatically exempt all bonds currently on issue; rather only those which otherwise meet the requirements of s.128F, most relevantly the public offer test.
In order to assist Australian custodians and paying agents holding bonds on behalf of offshore counterparties, TCorp wishes to make the following clarifications.
Domestic Bonds Which Qualify Under S.128F
TCorp considers the following lines of stock satisfy the relevant requirements of s.128F and are therefore exempt from IWT:
Other Domestic Debt Securities
TCorp has a small number of lines of domestic stock outstanding which are not part of its domestic benchmark programme. TCorp cannot at this stage make any definitive statements regarding eligibility of this stock for the IWT exemption. Any domestic custodians holding such stock on behalf of offshore parties should approach TCorp on a case-by-case basis to clarify IWT status of this stock.
Domestic commercial paper issued by TCorp does not qualify for the s.128F exemption; as such securities issued by TCorp are not “bonds” for the purposes of those provisions.
For further information please contact Tim Hext on (02) 9325-9279.
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