Public consultation to toughen the multinational anti-avoidance law
Tuesday, 13 February 2018
Multinational companies who attempt to avoid Australian taxes will see more loopholes closed under proposed new legislation.
The Turnbull Government’s Multinational Anti-Avoidance Law (MAAL) took effect from 1 January 2016 and prevents multinationals from escaping Australian tax by using artificial or contrived arrangements to avoid having a taxable presence in Australia.
Today the Government has released for public consultation new Exposure Draft legislation and draft Explanatory Memorandum to implement the Government’s 2017-18 Budget announcement that it would toughen the Multinational Anti-Avoidance Law (MAAL).
Federal Member for Flinders, the Hon. Greg Hunt MP, said the proposed changes would strengthen the government’s ability to ensure Australian profits were appropriately taxed.
“If a multinational corporation makes money in Australia, it is only right that they pay tax in Australia,” Minister Hunt said, “which is why the Turnbull Government has introduced new laws to close loopholes and ensure profits are taxed here.”
“To date the Australia Taxation Office has identified 38 taxpayers that have brought or are bringing their Australian sourced sales onshore in response to the MAAL.
“The result is the ATO expects an additional $7 billion in income each year will be returned to the Australian tax base.
“This new legislation will ensure that the MAAL continues to operate as intended and that multinationals pay the right amount of tax on their Australian income.”
In further action against tax avoidance by multinationals, the Government is strengthening the MAAL by preventing the use of foreign trusts and partnerships in corporate structures to avoid the application of the MAAL.
The new rules complement the Government’s Diverted Profits Tax and strong track record in stopping multinational tax avoidance.
The Turnbull Government is committed to putting Australia at the forefront of global efforts to improve tax system integrity.
The Exposure Draft legislation and Explanatory Memorandum are available on the Treasury website.
Submissions are due by Friday, 23 February 2018. The Government encourages all interested stakeholders to make a submission.