11 May 2015

New income tax and GST rules to hit offshore multinationals

by Andrew Sommer, Mark Friezer, Jonathan Donald

A key requirement for the anti-avoidance rules to apply will be that a principal purpose of the scheme is to avoid a taxable presence in Australia.

Treasurer Joe Hockey has today confirmed that Australia is going to bolster its income tax anti-avoidance rules to counter large multinationals (global revenues over $1bn) channelling revenues from Australian activities into tax havens.

A key requirement for the anti-avoidance rules to apply will be that a principal purpose of the scheme is to avoid a taxable presence in Australia. The Tax Commissioner will have power to recover unpaid tax and impose penalties of 100% of unpaid tax plus interest.

Legislation will be released in tomorrow night’s budget. We will provide you with a detailed analysis as further information emerges.

The Treasurer has also confirmed that the GST base will be expanded to include digitally delivered content from offshore – seeking to level the playing field between Australian based suppliers of digital content and those operating from other jurisdictions.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.