Large multinationals – integrity measures
“Google tax” – A new diverted profits tax
There will be a new tax aimed at large multinational corporations that artificially divert profits from Australia, from 1 July 2017.
A 40% tax on “diverted profits” will apply where the company shifts profits offshore through arrangements that exhibit certain characteristics.
The measure will apply to companies with global revenue of $1 billion or more. Companies with Australian revenue of less than $25 million will be exempt, unless they are artificially booking their revenue offshore.
Increasing administrative penalties for large multinationals
The Government will increase administrative penalties from 1 July 2017 for companies with global revenue of $1 billion or more that fail to adhere to tax disclosure obligations.
Penalties relating to the lodgment of documents to the ATO will be increased 100-fold – from $4,500 to $450,000. This is to deter companies from avoiding their reporting obligations.
Penalties relating to making statements to the ATO will be doubled. This targets companies that are reckless or careless in their tax affairs.
A new Tax Avoidance Taskforce will be established
The Government will provide funding to the ATO to establish a new Tax Avoidance Taskforce.This will enable the ATO to undertake enhanced compliance activities targeting multinationals, large public and private groups and high wealth individuals.
The Government intends to provide $678.9 million over the forward estimates. This will provide the ATO with a 55% increase in funding for compliance programs targeting multinationals and high wealth individuals. There will be a 43% increase in resources devoted to tackling multinationals.
The Government will also enhance information sharing between the ATO and the Australian Securities and Investments Commission.
Protecting tax whistleblowers
The Government will introduce arrangements to better protect individuals who disclose information to the ATO on tax avoidance behaviour and other issues.
This measure will take effect from 1 July 2018.
Individuals, including employees, former employees and advisers, who disclose information to the ATO will be better protected under the law.