Tax integrity: Multinational Anti‑avoidance Law

This consultation process has now been completed. Submissions available

Date

12 May 2015 – 9 June 2015

Consultation Type

Exposure draft

In the 2015–16 Budget, the Government announced that it would introduce the tax integrity multinational anti‑avoidance law to stop multinational entities using artificial or contrived arrangements to avoid a taxable presence in Australia. This exposure draft Bill and associated explanatory material would amend the anti-avoidance rules in Part IVA of the Income Tax Assessment Act 1936, giving effect to that decision. The measure is intended to target situations in which:

a foreign multinational supplies goods or services to Australian customers and books that revenue offshore;
the activities of an Australian entity are integral to the Australian’s customer’s decision to purchase the goods or services;
the profits from Australian sales are subject to low or no global tax; and
one of the principal purposes of the arrangements is to obtain a tax benefit.

Where the measure applies, the Commissioner of Taxation may cancel the Australian tax benefits obtained in connection with the scheme. This measure will only apply where the non-resident's annual global revenue is greater than $1 billion.