Combating multinational tax avoidance – stronger penalties
On 11 December 2015 the Tax Laws Amendment (Combating Multinational Tax Avoidance) Act 2015 was enacted. Among other things, the new law allows the Commissioner to double the maximum administrative penalties that can be applied to significant global entities that enter into tax avoidance and profit shifting schemes. Penalties will not change if you have taken a reasonably arguable position.
You are a significant global entity if you are:
- a global parent entity with an annual global income of A$1 billion or more, or
- a member of a group of consolidated entities for accounting purposes and one of the other group members is a global parent entity with an annual global income of A$1 billion or more.
We can also make a determination that you are a significant global entity if, in the period where you have not prepared global financial statements, we believe your annual global income is A$1 billion or more.
The increased penalties for significant global entities are intended to help deter multinational tax avoidance and profit shifting.
This measure applies for income years commencing on or after 1 July 2015.
On 12 May 2015, the government announced the 'Combating multinational tax avoidance – stronger penalties' measure. It was enacted on 11 December 2015 in Tax Laws Amendment (Combating Multinational Tax Avoidance) Act 2015.