The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
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David Bradbury

Assistant Treasurer, Minister Assisting for Financial Services & Superannuation and Minister for Competition Policy & Consumer Affairs

5 March 2012 - 18 September 2013

Media Release of 13/02/2013

NO.010

Reforms to crack down on tax avoidance and profit shifting

Reforms introduced into Parliament today will boost the Government's ability to tackle the challenges of base erosion and profit shifting, said Assistant Treasurer David Bradbury.

The Tax Laws Amendment (Countering Tax Avoidance and Multinational Profit Shifting) Bill 2013 contains amendments to the general anti avoidance rule, known as Part IVA, and the Transfer Pricing regime.

"These reforms strengthen two of our key weapons in the fight against base erosion and profit shifting. They will help to protect the integrity of Australia's income tax system and make sure that large taxpayers pay their fair share," said Mr Bradbury.

The Part IVA amendments ensure that the anti-avoidance provisions continue to counter schemes that comply with the technical requirements of the law but which, when viewed objectively, are conducted mainly to avoid tax.

The amendments will protect revenue of over $1 billion per year.

The amendments also modernise Australia's transfer pricing rules and provide a comprehensive and robust transfer pricing regime that is aligned with internationally accepted principles, as set out by the OECD.

Transfer pricing rules are critical to the integrity of the tax system.  They seek to ensure that an appropriate return for the contribution of Australian operations of a multinational group is taxable in Australia for the benefit of the broader community.

"When multinationals don't pay their fair share, they gain an unfair competitive advantage over domestic companies and disadvantage Australian taxpayers who must make up the tax shortfall or accept fewer Government services," said Mr Bradbury.

"The Government has also recently announced its intention to improve the transparency of Australia's business tax system and the Treasurer will be taking this issue to the G20 Finance Ministers' meeting this weekend.

"Large multinational companies that use complex arrangements and contrived corporate structures to avoid paying their fair share of tax should not be able to hide behind a veil of secrecy."

13 February 2013