The last month has seen the release of the Paradise Papers. These papers detail what most people already know – that large multinationals and the rich of the world have structures in tax havens.
We are seeing unprecedented co-operation between taxation authorities internationally. In Australia, you may have seen in the media that the Australian Taxation Office (ATO) has established a new Tax Avoidance Taskforce.
The Australian Government has invested an unprecedented $679 Million over 4 years to run the Tax Avoidance Taskforce which is being led by the Commissioner of Taxation. The ATO has been actively recruiting senior very experienced staff from the chartered accounting and taxation industry to bolster their resources.
This task force has been tasked to raise $3.7 billion in taxes and to dates has collected $1.5 billion from large multinational corporations.
In addition to the taskforce, the Government has also introduced a range of new legislation and compliance requirements which have come out of the OECD action plan on the Base Erosion of Profits Shifting (BEPS) recommendations.
Multinational Anti Avoidance Laws (MAAL) that have been in place since 1 January 2016 target large multinational corporations with annual global revenue of $1 billion AUD or over. In addition to the MAAL the following changes to reporting requirements and legislation have been proposed/ are about to commence:
- Country by Country reporting (CbC) requirements – first lodgement required by 31 December 2017 for 31 December 2016 balancers;
- The diverted profits tax;
- The Multilateral Instrument – the multilateral instruments will revolutionise the way in which tax treaties are negotiated and the ability to amend agreements over time;
- Legislation is also currently being developed to affect the implementation of the OECD Hybrid Mismatch Rules, better known as the anti-hybrid laws.
The above listed changes that are about to commence/ and are currently being legislated, are just the start to Australia’s commitment to the implementation of the OECD BEPS recommendations.
Over time the international tax landscape will significantly change the way in which all organisations invest and trade internationally. It is essential to keep up to date on these changes and understanding the potential impact to your organisation.
Our International Tax Team here at Allan Hall are equipped to help navigate your organisation through these changes. Contact 9981 2300 for more details.