Australian Taxation Office

New or updated materials on ATO website, including:

Multinational integrity measures – CbC reporting and stronger penalties

Treasury has released draft legislation to implement the following integrity measures announced in the 2015-16 Federal Budget as part of the package to combat tax avoidance by multinational enterprises:

  • implement the Organisation of Economic Cooperation and Development (OECD) Base Erosion and Profit Shifting (BEPS) Action Plan 13 requiring transfer pricing documentation and Country-by-Country (CbC) reporting - to apply in relation to income years commencing on or after 1 January 2016, and
  • doubling administrative penalties for multinational entities that are found to have entered into tax avoidance or profit shifting schemes and do not have a reasonably arguable position - to apply to scheme benefits obtained, or that would be obtained, on or after 1 July 2015.

Both of these measures are proposed to apply to entities with annual global revenue of $1 billion or more. Comments can be made until 5 September 2015. These measures are flagged to be high priority for introduction and passage in the Spring sittings of Parliament (see below).

Tax Reform

Treasury has released a snapshot of organisations and individuals who made a formal submission in response to the tax discussion paper and a word cloud on which tax topics were mentioned the most.

Parliament

Parliament resumes next week for the Spring Sittings with both Houses sitting from Monday. The draft programmes for the House of Representatives and the Senate are now available, and show the following Bills listed for debate next week:

  • Tax Laws Amendment (Small Business Measures No. 3) Bill 2015, which proposes to give effect to a number of 2015-16 Federal Budget measures including the small business tax offset for individuals, allowing small businesses to immediately deduct certain costs incurred when starting up a business and to extend the fringe benefits tax exemption relating to work-related portable electronic devices, listed for debate in the House of Representatives on Tuesday and if passed, debate in the Senate on Wednesday.
  • Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 2015, which proposes to:
    • provide tax relief for certain mining arrangements
    • increase the statutory effective life of in-house software
    • provide income tax look-through treatment for instalment warrants and similar arrangements, and
    • amend the company loss recoupment rules (including to deal with companies with shares with unequal share rights), listed for debate in the House of Representatives on Tuesday.
  • Tax and Superannuation Laws Amendment (2015 Measures No. 3) Bill 2015, which proposes to abolish the seafarer tax offset and reduce the research and development tax incentive offset, listed for debate in the Senate on Monday.

Legislation proposed for introduction in the 2015 Spring Sittings

The following Bills are proposed for introduction into Parliament and passage during the Spring Sittings, which commences next Monday:

  • Tax Laws Amendment (Combatting Multinational Tax Avoidance) Bill to:
    • introduce a new targeted anti-avoidance rule to stop multinationals artificially avoiding a taxable presence in Australia
    • introduce new transfer pricing documentation standards (including CbC reporting) for multinational entities with global revenue greater than $1 billion, and
    • increase penalties for tax avoidance for multinational entities with global revenue greater than $1 billion.
  • Superannuation Legislation Amendments (Governance) Bill to implement the Government’s election commitment to improve governance in superannuation.
  • Tax and Superannuations Laws Amendment (2015 Spring No. 1 Bill) to:
    • better target the Zone Tax Offset to exclude ‘fly-in fly-out’ and ‘drive-in drive-out’ employees
    • limit fringe benefit tax concessions for entertainment benefits
    • strengthen the capital gains tax scrip for scrip rollover integrity provisions
    • increase the threshold at which superannuation funds transfer lost member superannuation accounts to the ATO, and
    • introduce the non-final withholding tax on disposal by foreign residents of certain direct and indirect interests in Australian real property.