The Coalition has, and will continue to, crack down on multinational tax evaders.
The House of Representatives currently has before it legislation that tightens the rules governing thin capitalisation (Tax and Superannuation Laws Amendment (2014 Measures No. 4) Bill 2014).
The Abbott Government is legislating to fix thin capitalisation rules, by making sure that repayments of interest to companies in Australia from overseas subsidiaries are subject to tax even when they are dressed up as dividends. These amendments have effect from 1 July this year.
Labor's Shadow Assistant Treasurer Andrew Leigh's claim today that the Abbott Government has not taken serious action on multinational taxation is simply wrong.
Leigh also wrongly claims the Government "walked away” from closing $1.1 billion in tax loopholes relating to multinational taxation.
Again, this is not reflective of the facts.
After public consultation Rob Heferen, Treasury Executive Director, Revenue Group, said: “it became apparent that the proposal that stood would not be a sensible proposal to proceed on”. (Source: 2014 Budget Estimates Economics Legislation Committee Hansard Thursday 5 June 2014, Page 17).
While Leigh continues to get it wrong, the Coalition is taking real action to crack down multinational tax dodgers.
Earlier this month Treasurer Joe Hockey told Parliament he had asked the Commissioner of Taxation to double his efforts in applying the existing laws by undertaking more extensive enquiries and audits of multinational companies considered a risk to Australian tax collections.
The Coalition firmly believes you should pay tax in the country where you’ve earned a profit.