Corporations and multinationals should pay their fair share in tax. That means paying the right amount of tax on profits that were made here in Australia. Without strong rules around tax avoidance, Australian’s lose out on money that should be spent on the Australian Defence Force, national security, Medicare and the environment.
At the last election, the Turnbull Government made a pledge to crack down and close the tax loopholes that some companies were using to avoid paying tax in Australia. We have committed to that goal and worked hard to get results.
To date the Australia Taxation Office has identified a range of taxpayers that have brought or are bringing their Australian sourced sales onshore in response to the Multinational Anti-Avoidance Law (MAAL), a Turnbull Government initiative. We have recouped over $7 billion of sales revenue that has come back into the tax net as a direct result of our intervention.
As well as this, as a signatory to the OECD Multilateral Instrument allows the force of law to be applied to this instrument in Australia that will:
- Ensure that income derived through fiscally transparent entities (such as partnerships and trusts) will only be eligible for treaty benefits, such as reduced taxation, in appropriate circumstances;
- Prevent entities from changing their jurisdiction of residence for tax purposes in order to obtain treaty benefits;
- Ensure that tax treaty-based relief from double taxation does not result in double non-taxation (that is, no tax paid in either jurisdiction);
- Clarify that Australia’s tax treaties are not intended to facilitate tax avoidance or evasion;
- Provide Australia and its treaty partners with specific treaty-based anti-avoidance rules;
- Prevent entities from inappropriately increasing their shareholdings in Australian companies in order to obtain reduced taxation on dividends;
- Prevent entities from avoiding capital gains tax by diluting their ownership interests in Australian land-rich entities shortly before disposing of those interests;
- Clarify that Australia’s tax treaties do not restrict its right to tax its own residents;
- Prevent entities from fragmenting their business-related activities or engaging in contract-splitting to avoid having a permanent establishment (a taxable presence) in Australia or in a treaty partner.More information can be found at http://www.oecd.org/tax/treaties/multilateral-convention-to-implement-tax-treaty-related-measures-to-prevent-beps.htm
- It’s critical that we get the balance right to ensure that Australia is still a world class place to do business, while making sure that those doing business here pay the tax they should.