Foreign Investors Face Retrospective Tax Liabilities on Green Assets Dating to 2006

Foreign investors who sold solar, wind, and battery developments after 2006 may now face unexpected capital gains tax liabilities, including penalties and general interest charges. The Federal Government released draft legislation to clarify which assets tied to land holdings are subject to CGT, expanding the scope to specifically include green energy assets. These amendments are proposed to apply retrospectively to December 2006, the date the foreign resident CGT regime was implemented. Corrs Chambers Westgarth tax partner Luke Imbriano described the proposal as one of the most significant retrospective tax measures Australia has seen in decades. CPA Australia tax lead Jenny Wong stated that applying new interpretations of the law back to 2006 sends a signal that rules can change after the fact, making Australia a less attractive place to invest. The draft legislation was released for a two-week consultation period.