Crackdown on multinational tax avoidance to help families

THE Federal Government is ensuring multinational tax dodgers pay their fair share of tax, helping to pay for crucial government services for our community, Page MP Kevin Hogan said.

He said around $2 billion in tax is expected to be clawed back this financial year under the Government's crackdown on multinational tax avoidance.

"We have the toughest tax avoidance laws in the world," Mr Hogan said.

The $2 billion in tax liabilities from multinationals is expected to come from assessments relating to seven audits of large multinational companies in the energy, resources and e-commerce sectors by the Australian Taxation Office (ATO).

"This is further proof that the Federal Government's strong action is effectively dealing with non-compliance behaviour of multinationals in Australia. Australia needs a sustainable tax system with integrity to ensure we can afford the services and infrastructure that our community rely on now and into the future.

"It is these tough measures that we continue to build on, with the introduction to Parliament last week of legislation implementing the new Diverted Profits Tax, which will close loopholes and prevent multinationals shifting the profits that they earn in Australia offshore to avoid paying tax."

"I know this will be welcome news to everyone in our community, as I travel around and talk to people, there is broad agreement that multinationals should pay their fair share of tax."

The Diverted Profits Tax will commence on 1 July 2017, and is expected to raise $100 million in revenue a year from 2018-19.

Background

The measures introduced in the Combating Multinational Tax Avoidance Bill 2017, including the Diverted Profits Tax, provide a powerful new tool to the Australian Taxation Office to tackle multinational tax avoidance and will reinforce Australia's position as having the toughest tax avoidance laws in the world.

The Commissioner of Taxation will be provided with extra powers to achieve this.

By making it easier to apply Australia's anti- avoidance provisions and applying a 40 per cent rate of tax, which will need to be paid immediately, the DPT will:

  • complement the application of the existing anti-avoidance rules;
  • encourage greater compliance by large multinational enterprises with their tax obligations in Australia, including with Australia's transfer pricing rules; and
  • encourage greater openness with the Commissioner, and allow for quicker resolution of disputes.

In addition to the DPT, the Combating Multinational Tax Avoidance Bill 2017 introduced into Parliament today includes more changes to ensure that multinationals pay the right amount of Australian tax and comply with their tax disclosure obligations.

This change will now see the maximum penalty 100-times for large multinationals where they fail to lodge tax documents on time. The penalty for large multinationals that fail to comply with their tax reporting obligations will increase to over half a million dollars.

The Government is also doubling the penalties for large multinationals when they make false or misleading statements to the ATO.



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