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  • Multinational Anti-Avoidance Law (MAAL)

    We're continuing to work with multinationals potentially affected by the Multinational Anti-Avoidance Law (MAAL). We're providing greater certainty on how the law applies to multinationals and encouraging them to work with us to ensure their arrangements comply with MAAL.

    Our work to date has seen a positive impact on the behaviours of taxpayers and their advisors with many of the largest e-commerce multinationals moving to have their sales income recognised in Australia.

    • 31 multinationals have restructured or intend to restructure in response to the MAAL. 18 of these companies have already restructured returning more than an estimated $6.4 billion in sales per annum to the Australian tax base.
    • An additional $200 million in GST revenue has also been received due to the MAAL restructures.

    We're also making compliance easier by streamlining the engagement process for multinationals whose Australian economic group has annual turnover under $50 million restructuring to comply with MAAL. This will reduce the compliance cost for these smaller scale foreign companies.

    If taxpayers restructure their operations by appointing the Australian subsidiary as a distributor of goods or services to comply with MAAL, the ATO will not review the covered transactions or arrangements for transfer pricing purposes for the interim period (ie from 1 January 2016 to the date of the restructure) if:

    • the taxpayers self-assess, on a reasonably arguable basis, the relevant transactions for compliance with the transfer pricing rules, and
    • the Australian distributor function is remunerated with a minimum profit-before-tax ratio of 3%.

    We continually encourage businesses to engage with us to seek clarity around the application of the MAAL to their operations.

    See also:

      Last modified: 29 Jun 2017QC 52720