• Combating multinational tax avoidance – a targeted anti-avoidance law

    The Multinational Anti-Avoidance Law (MAAL) is part of the government's efforts to combat tax avoidance by multinational companies operating in Australia.

    The MAAL has been established to ensure that multinationals pay their fair share of tax on the profits earned in Australia.

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    What schemes does the MAAL apply to?

    The MAAL came into effect on 11 December 2015. It applies to certain schemes on or after 1 January 2016, irrespective of when the scheme commenced.

    Broadly, the new law will apply if under the scheme, or in connection with the scheme:

    • a foreign entity supplies goods or services to an Australian customer
    • an Australian entity, that is an associate of or is commercially dependent on the foreign entity, undertakes activities directly in connection with the supply
    • some or all of the income derived by the foreign entity is not attributable to an Australian permanent establishment, and
    • the principal purpose, or one of the principal purposes of the scheme, is to obtain an Australian tax benefit or to obtain both an Australian and foreign tax benefit.

    Who does the MAAL apply to?

    The MAAL only applies to significant global entities. A significant global entity is:

    • a global parent entity with an annual global income exceeding A$1 billion, or
    • a member of an accounting consolidated group, and the global parent entity of the group has an annual global income exceeding A$1 billion.

    Under the MAAL we can cancel any tax benefits a significant global entity, and its related parties, obtained from certain schemes described above. Significant global entities are also subject to increased penalties for tax shortfalls arising from the application of the MAAL.

    Our engagement with you

    We have published a Law Companion Guideline that outlines how we will apply and administer the law. If you are impacted by the MAAL, we will be working closely with you to provide greater certainty on how the law applies to you and, where appropriate, help you transition with certainty into compliant arrangements.

    If you choose not to engage with us within the required timeframe, we will initiate compliance actions through our standard processes to review whether the MAAL applies to you.

    See also:

      Last modified: 28 Oct 2016QC 48321