The Australian government today issued draft legislation and an explanatory memorandum proposing to extend its Multinational Anti-Avoidance Law (MAAL) to prevent taxpayers from using of foreign trusts and partnerships in corporate structures to avoid the application of the MAAL.
The MAAL, which took effect in Australia January 1, 2016, is designed to prevent large multinationals from avoiding Australian tax by using artificial or contrived arrangements to avoid having a taxable presence in Australia.
The new legislation is needed, the government said, to ensure the MAAL operates as intended.
The MAAL applies to ‘significant global entities,” namely entities with either annual global income of AUS $1 billion or more or that is are part of a group of entities that have annual global income of AUS $1 billion or more.
Comments are requested on the government draft by February 23.