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Australian Parliament Passes Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill 2015 including CbC Reporting — Orbitax Tax News & Alerts

On 3 December 2015, Australia's House of Representative passed the Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill 2015 ({News-2015-09-17/P/2- previous coverage}) following passage by the Senate. The legislation includes:

  • A standard for defining a Significant Global Entity (SGE), which is an entity that is part of a consolidated group with annual revenue of AUD 1 billion or more (such entities are subject to the following);
  • A new multinational anti-avoidance law to counter artificial arrangements that avoid attribution of profits to Australia;
  • Increased scheme penalties (doubled), unless taxpayer adopts a reasonably arguable tax position.; and
  • Transfer pricing reporting requirements in line with Action 13 of the OECD BEPS Project, including Country-by-Country report, master file and local file.

The provisions regarding the definition of SGEs generally apply for the 2013-2014 tax year and subsequent years; the anti-avoidance and transfer pricing reporting provisions apply for tax years beginning on or after 1 January 2016; and the increased penalties apply for tax years beginning on or after 1 July 2015.

Additional amendments to the initial draft Bill include:

  • The requirement that Australian entities and PEs in Australia of foreign entities that qualify as SGEs submit general purpose financial statements by the due date of the tax return, rather than special purpose financial statements, for tax years beginning on or after 1 July 2016; and
  • The exemption from the public disclosure of tax return data by the Australian Taxation Office for private Australia companies will no longer apply for companies with annual revenue of AUD 200 million or more, with effect for the 2013-2014 tax year tax return and subsequent years.

The Bill now awaits Royal Assent to be enacted.

Click the following link for the Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill 2015 as passed by parliament.