29 November 2016
Media Release - #2016123, 2016

Turnbull government delivering on diverted profits tax

The Turnbull Government is delivering on its commitment to tax integrity and today released draft legislation for implementation of the Diverted Profits Tax, which will give increased powers to the Australian Taxation Office (ATO) to address multinational tax avoidance.

Announced in the 2016-17 Budget, the Diverted Profits Tax will broaden the ATO’s scope to identify large multinationals seeking to avoid tax by shifting profits out of Australia and will enable the Commissioner to impose a penalty tax rate of 40 per cent on arrangements that are caught in breach of the rules.

The Diverted Profits Tax will also encourage greater openness with the ATO and allow for speedier resolution of disputes.

The Turnbull Government is determined to ensure that all companies that operate in Australia pay the right amount of tax here. Under our new law, where they use complex global structures to avoid tax on Australian earnings, they will pay even more.

The Government is engaging in close consultation with interested parties in order to ensure that the implementation of this complex legislation achieves its aims.

Following from earlier public engagement in May, consultation on the Diverted Profits Tax draft legislation will give all interested parties an opportunity to comment on how the policy is drafted into law.

The Diverted Profits Tax will commence on 1 July 2017, will raise $200 million in revenue over the Forward Estimates and will reinforce Australia’s position as having amongst the toughest laws in the world to combat corporate tax avoidance.

The Exposure Draft Bill and Explanatory Memorandum are available on the Treasury website. Interested parties have until 23 December 2016 to provide submissions.