Taxpayer Alert – Arrangements in response to the Multinational Anti-Avoidance Law (MAAL)
There are tax risks associated with some arrangements that have been put in place in response to the new Multinational Anti-Avoidance Law (MAAL).
Read our Taxpayer Alert if you have entered into, or plan on entering into, such an arrangement.
Some multinational companies are seeking to use artificial and contrived arrangements to avoid, or reduce, a potential MAAL liability from 1 January 2016.
We’ve seen arrangements involving the foreign and Australian entities swapping distribution roles via contracts and/or re-characterising intra-group payments to avoid the application of the MAAL, or reduce their tax liabilities if the Commissioner sought to apply the MAAL.
- are artificially structured to avoid the application of the MAAL
- do not involve a true agency relationship between the foreign entity and the Australian entity, where the authorisation of agency is a feature of the scheme
- do not accurately reflect the relevant capacity in which the foreign entity is contracting with Australian customers
- may not result in the relevant entity having the necessary licensing rights over the intangible assets needed to contract with Australian customers
- may involve changes to licensing arrangements in the company’s global structure which do not recognise the rights needed to supply products or services to Australian customers.
What we’re doing
We are reviewing these arrangements and will work with taxpayers and their advisors.
What you can do
You can obtain more detailed information about these types of arrangements and our concerns by reading the Taxpayer Alert.
We recommend you seek independent advice, review your arrangement or discuss your situation with us by emailing MAAL@ato.gov.au