"Outside of the US, Australia's international tax regime has long been considered among the most complex in the world," said KPMG partner, Jason Chang. "The changes announced in this Bill significantly remedy this situation."

"The Australian Government should be commended for delivering on a key component of its election commitment to improve the competitiveness of Australian companies' foreign operations while also reducing compliance costs by removing a number of complex provisions," said KPMG partner, Neil Billyard.

The changes announced in the Bill relate to capital gains tax concessions for active foreign companies, foreign dividends, foreign branch income and tainted services income and will achieve three significant benefits for Australian businesses.

Firstly, it will allow Australian companies to compete on a more level playing field with global competitors by exempting gains realised from selling interests in foreign subsidiaries or from restructuring their corporate structure. This exemption has been available to foreign companies for a significant number of years, which has given them a competitive advantage over Australian companies competing globally.

Secondly, it will allow Australian companies to repatriate profits from overseas by exempting dividends paid from overseas subsidiaries. This frees up capital for reinvestment by Australian businesses.

Thirdly, these measures will make Australia a more attractive location for regional headquarters for global multinationals investing into Asia Pacific.

The simplification of the international tax process will also reduce compliance costs for Australian companies. Overall, these changes will result in a net reduction of more than 20 pages of legislation.