Australia’s diverted profit tax clarified in new guidance

The Australian Taxation Office (ATO) on December 18 published two sets of guidance further clarifying it’s a diverted profits tax on large multinationals. The tax has been in effect since July 1, 2017.

First announced in the 2016-17 budget, Australia’s diverted profits tax aims to prevent multinationals from diverting Australian profits offshore through arrangements involving related parties.

draft law companion guideline provides guidance on some of the concepts that are included in Schedule 1 to the Act. Comments on this draft guidance are due February 16.

law administration practice statement discusses the administrative process the ATO uses when making a diverted profits tax assessment.

Multinationals with annual global income of AUS 1 billion (~USD 748 million) that have Australian turnover of more than AUS 25 million (~USD 18.7 million) are subject to the tax.

 


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