The Turnbull Government has tonight secured the passage of the Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill, a critical piece of legislation, which will ensure major international companies operating in Australia but booking profits offshore have to pay tax here.
This Government is committed to ensuring companies that earn income in Australia and benefit from the Australian economy pay their fair share of tax here. Under this new law, companies caught cheating will have to pay back double what they owe, plus interest.
The Government's measures attack the heart of the multinational tax avoidance problem, whilst ensuring Australia remains an attractive and competitive place to do business.
The law will cover all multinationals operating in Australia with global revenues above $1 billion. These 1,000 companies will need to consider the new rules if they have economic activities in Australia but book their Australian sales revenue offshore.
The laws also implement the OECD's Country-by-Country reporting regime and new transfer pricing documentation standards, giving the Australian Tax Office (ATO) a better picture of how these multinationals companies internally operate.
This package of measures has been developed through an extensive feedback and consultation process undertaken by Treasury and as a result of having ATO officials working within key multinationals operating in Australia. The ATO now has additional detailed information of how many of these companies structure their tax affairs to avoid paying their fair share.
Passage of this legislation sends a clear message that Australia has no tolerance for tax avoiders.
We did what we said we would do and consulted both with the ATO and Board of Taxation on the amendments. Following this work we undertook further engagement with the Senate including taking further advice on the amendments put forward by the Greens.
While the government would have preferred the Bill's passage without the Greens' amendments we recognise that governing is about pragmatic choices and securing the best outcome available. That's why we have been prepared to work with the Greens in the Senate.
Labor were similarly invited to the table but refused. They were determined to hold this legislation hostage for a cheap political stunt and in doing so were prepared to throw away the most significant changes to address multinational tax avoidance in the past 30 years just for some more grandstanding, making a mockery of their position on multinational tax.
We commend the Greens for being the pragmatic operator in the Senate that Labor has once again failed to be.
The former Labor Government achieved practically nothing on multinational tax during their six years in office. It is disappointing they are intent on maintaining this poor record in opposition.