In the 2015-16 Budget, the Government announced that it would introduce the tax integrity multinational anti‑avoidance law to stop multinational entities using artificial or contrived arrangements to avoid a taxable presence in Australia.
This exposure draft Bill and associated explanatory material would amend the anti-avoidance rules in Part IVA of the Income Tax Assessment Act 1936, giving effect to that decision.
The measure is intended to target situations in which:
- a foreign multinational supplies goods or services to Australian customers and books that revenue offshore;
- the activities of an Australian entity are integral to the Australian’s customer’s decision to purchase the goods or services;
- the profits from Australian sales are subject to low or no global tax; and
- one of the principal purposes of the arrangements is to obtain a tax benefit.
Where the measure applies, the Commissioner of Taxation may cancel the Australian tax benefits obtained in connection with the scheme.
This measure will only apply where the non-resident's annual global revenue is greater than $1 billion.