FED GOVT INTRODUCES LEGISLATION TO ENSURE MULTINATIONALS PAY THE RIGHT AMOUNT OF TAX

The Federal Government is acting to improve the integrity and operation of the business tax system by introducing legislation to close loopholes in the tax consolidation regime that create unintended tax outcomes, Minister for Revenue and Financial Services, Kelly O’Dwyer has announced.

According to Minister O’Dwyer, the tax consolidation regime, in allowing wholly-owned corporate groups to be treated as a single entity for tax purposes, reduces compliance costs for business and improve the integrity of the tax system; however, she said multinational consolidated groups can, in some circumstances, “achieve tax free gains on assets by transferring entities between non-resident associates”.

“The [Treasury Laws Amendment (Income Tax Consolidation Integrity) Bill 2018] will improve the integrity of the consolidation regime by preventing multinational groups from sheltering future income tax by ‘churning’ entities between related parties,” Minister O’Dwyer said. “This will ensure that these multinational groups pay the right amount of tax on gains from their Australian assets. Read more

James Harkness – Dynamic Business – 16 Feb 2018