Australia’s multinational corporation tax avoidance bill receives royal assent

Australia’s Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill 2015 received Royal Assent on December 11, giving effect to measures announced in the 2015-16 Budget.

The new law includes a multinational antiavoidance law, effective from 1 January 1, 2016, that seeks to negate tax avoidance schemes used by multinational entities to artificially avoid the attribution of profits to a permanent establishment in Australia. The law also includes heightened penalties for large entities for adjustments related to antiavoidance or transfer pricing, effective for tax years beginning on or after July 1, 2015.

Further, the law includes new transfer pricing documentation rules, including country-by-country reporting rules, consistent with OECD standards, effective January 1, 2016. Also, the law adds Australian-owned private companies with annual income of A$200 million or more the list of entities that must publicly disclose tax return data.

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