On 5 October 2021, some good news for the Australian securitisation market came from the EU following a decision by the Council (linked
here) to recognise that Australia has implemented all the necessary tax reforms (in particular, the OBU tax reforms) to justify the removal of Australia from the EU list of cooperative third country jurisdictions that have committed to implement (but do not yet comply) with all international principles of good governance in taxation (the EU Annex II list).
This Council decision is significant for the Australian securitisation market because the removal of Australia from the EU Annex II list, with effect from 5 October 2021, signifies the end of the EU tax authority notification requirement that certain European institutional investors have had to consider when investing in Australian securitisations.
By way of background, and as we have discussed in more detail in our earlier briefing of 31 March 2021 (linked here), as a result of amendments made to the EU Securitisation Regulation (Regulation (EU) 2017/2402, consolidated version linked here, the EU SR) that took effect on 9 April 2021, European institutional investors in-scope of the EU SR had to consider the new EU tax authority notification requirement when investing (in primary or secondary markets) in securitisations with an Australian special purpose entity established after 9 April 2021.
This development is very much welcomed by Australian issuers and the investor community, particularly given the practical uncertainties that arose when investors sought to comply with the notification requirement.
