Tuesday , May 22 2018
Breaking News
Home / International Customs / Australia / ATO to profit from profits crackdown
ATO to profit from profits crackdown

ATO to profit from profits crackdown

CANBERRA: The Commissioner of Taxation is to be given extra powers to prevent multinational companies shifting profits made in Australia offshore to avoid paying tax. The Diverted Profits Tax (DPT) will begin on 1 July and is expected to raise $100 million in revenue each year from 2018–19. The Australian Taxation Office said in a statement that the tax targeted multinationals which entered into arrangements to divert their Australian profits to offshore related parties.

New powers to deal with multinational companies.“By making it easier to apply Australia’s anti-avoidance provisions and applying a 40 per cent rate of tax, which will need to be paid immediately, the DPT will complement the application of the existing anti-avoidance rules,” the ATO statement said. It said it would also encourage greater compliance by large multinational enterprises with their tax obligations in Australia, including with Australia’s transfer pricing rules; encourage greater openness with the Commissioner; and allow for quicker resolution of disputes.

The statement said the DPT would not apply to managed investment trusts or similar foreign entities, sovereign wealth funds and foreign pension funds. It said these entities had been excluded as they were low risk from an integrity perspective, were widely held and undertook passive activities. “Similarly, the DPT will only apply to multinationals that have global income of more than $1 billion and Australian income of more than $25 million,” the statement said.