Your eyes are not deceiving you! The already extremely high FIRB filing fees are set to double from 29 July 2022. While the maximum fee will now be capped at a dizzying A$1,045,000, applications involving proposals of A$100m or less will fall within the filing fee range of A$4,000 and A$26,400 - which is lower than the filing fee payable before 2021.
- FIRB filing fees will double for applications lodged on and from 29 July 2022.
- Applications already lodged with FIRB will not be impacted.
- The minimum fee will increase from A$2,000 to A$4,000 (transactions less than A$75,000 and new business proposals).
- The maximum fee will increase from A$522,500 to A$1,045,000 (impacting transactions more than A$2 billion, but this high fee applies to agricultural land proposals of over A$80 million and residential land proposals of over A$40 million).
- The fee applicable to variation applications and internal reorganisations will increase to A$26,400.
What should you consider?
If you are considering a transaction that may require a no objection notification from the Australian Treasurer (FIRB approval), contact your FIRB adviser to discuss your options and the timing.
A FIRB approval is valid for at least a 12 month period, which allows you time to enter into a binding agreement following receipt of the FIRB approval.
If the Australian transaction value of your deal is A$100 million or less, the applicable filing fee is currently A$13,200 and will increase to A$26,400.
If your deal is likely to attract the current maximum filing fee of A$522,500, consider whether an application to FIRB can be made prior to 29 July 2022, before the maximum filing fee increases to A$1,045,000.
When do FIRB filing fees double?
On 21 July 2022, the Foreign Acquisitions and Takeovers Fees Imposition Amendment (Fee Doubling) Regulations 2022 (Cth) (Fee Doubling Regulation) was made, which will result in the doubling of all FIRB filing fees that become payable on or after 29 July 2022.
This will mean that the minimum FIRB filing fee will increase from A$2,000 to A$4,000, while the maximum fee increases from A$522,500 to A$1,045,000. Filing fees will continue to be indexed annually.
Will this affect my FIRB application?
The Fee Doubling Regulation applies in relation to FIRB filing fees that ‘become payable on or after 29 July 2022’. The Fee Doubling Regulation does not have retrospective application and does not impose any other changes to the fees payable for FIRB applications.
If you have already lodged your FIRB application, or will lodge your FIRB application through the FIRB Application Portal and have been or will be issued with a fee assessment email on or before 28 July 2022, this amendment to the filing fees will not impact the filing fee payable for your application.
The FIRB fee assessment email is generally issued automatically after an application is lodged via the FIRB Application Portal. However, in the case of exemption certificates, there is a delay of a few days between lodgement of the application and receipt of the fee assessment to cater for FIRB’s manual consideration of the applicable filing fee.
There is some ambiguity as to the point at which a fee ‘becomes payable’, particularly within the context of exemption certificates that are lodged and subject to a fee assessment process that is yet to be finalised. The uncertainty lies as to whether the fee becomes payable on lodgement of the exemption certificate application or on receipt of the FIRB fee assessment.
However, adopting a conservative approach, lodging an application for an exemption certificate on or before 28 July 2022 may carry a risk of having a doubled filing fee imposed if the relevant fee assessment is issued on or after 29 July 2022. We would hope a common sense approach is applied and the fee assessed as at the date of filing.
During the 2022 federal election campaign, the then Labor opposition published its ‘Help to Buy’ housing program, which it estimated would cost taxpayers around A$329 million over the forward estimates. To pay for the management of its housing affordability policies, Labor foreshadowed doubling foreign investment screening fees and financial penalties commencing from July 2022, which it estimated would raise around A$445 million over the forward estimates.
FIRB filing fees are imposed through the Foreign Acquisitions and Takeovers Fees Imposition Act 2015 (Cth) and the Foreign Acquisitions and Takeovers Fees Imposition Regulations 2020 (Cth).