Government pushes forward with multinational tax measures

 

The Australian government has introduced legislation to Parliament to implement a new string of tax measures to prevent multinationals from profit shifting.

 

 

Planned to commence on 1 July, the diverted profits tax (DPT) will give the ATO new powers to combat contrived arrangements and multinational tax avoidance, targeting multinationals with global income in excess of $1 billion and Australian income over $25 million. 

Under the new tax the ATO will be able to apply Australia’s anti-avoidance provisions, with companies in question required to pay a 40 per cent penalty tax rate immediately.

The DPT will restrict multinationals’ ability to use transfer pricing rules and will strengthen existing anti-avoidance rules, according to a statement issued by Treasurer Scott Morrison’s office.

Foreign pension funds, sovereign wealth funds, managed investment trusts and similar foreign entities will be exempt from the tax, with the government saying it wishes to avoid increasing the compliance burden for these “low-risk”, “passive” and “widely held” entities. 

The legislation includes two additional measures to strengthen compliance and increase transparency.

The first aims to increase the maximum penalty for multinationals that fail to lodge tax documents on time to $525,000, while also doubling the penalty for those found to have provided misleading information.

The second will amend the current transfer pricing laws to make them concurrent with the 2015 OECD recommendations, ensuring analysis fairly reflects the transaction and making the pricing of intangibles more transparent.

 


JACK DERWIN
Friday, 10 February 2017
www.accountantsdaily.com.au


All the world’s a stage, and all the men and women are merely players William Shakespeare
A fool and his money are soon parted. What I want to know is how they got together in the first place Cyril Fletcher
My main problem is reconciling my gross habits with my net income Errol Flynn
All I ask is the chance to prove that money can't make me happy Spike Milligan
A very rich person should leave his kids enough to do anything but not enough to do nothing Warren Buffet
Next to being shot at and missed, nothing is quite as satisfying as an income tax refund F.J. Raymond
Those are my principles, and if you don't like them... well, I have others Groucho Marx

© 2018 Moneytax. All rights reserved. Disclaimer | Privacy

Site by PlannerWeb.