Multinational Anti-Avoidance Bill - Law Companion Guideline is now available
The Law Companion Guideline for schemes that limit a taxable presence in Australia (PDF, 452KB) is now available.
The guideline was developed in consultation with industry to help you understand how we will apply the proposed law in Schedule 2 to the Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill 2015.
The proposed law is designed to counter the erosion of the Australian tax base by multinational entities using artificial and contrived arrangements to avoid attributing profits to a permanent establishment in Australia. It gives the Commissioner new powers to disregard a tax benefit obtained by a scheme that is captured by the proposed law.
The guideline discusses the conditions that must be satisfied for the law to apply, including the principal purpose test (where there is a combined purpose of obtaining a tax benefit and reducing or deferring a liability to foreign tax). The guideline also provides examples of high risk and low risk scenarios and questions for entities to consider in assessing the application of the proposed law to their arrangements.
Further guidance that will outline the engagement process for example, a client experience road-map, will be released and give more detail to those who are concerned their arrangements may be within the scope of the proposed law.
We have developed a Law Companion Guideline that describes how we will apply the proposed multinational anti-avoidance law.