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This is a Bill, not an Act. For current law, see the Acts databases.
2013-2014-2015
The Parliament of the
Commonwealth of Australia
HOUSE OF REPRESENTATIVES
Presented and read a first time
Tax Laws Amendment (Combating
Multinational Tax Avoidance) Bill 2015
No. , 2015
(Treasury)
A Bill for an Act to amend the law relating to
taxation, and for related purposes
No. , 2015
Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill
2015
i
Contents
1
Short title ........................................................................................... 1
2
Commencement ................................................................................. 1
3
Schedules ........................................................................................... 2
Schedule 1--Significant global entities
3
Income Tax Assessment Act 1997
3
Taxation Administration Act 1953
7
Schedule 2--Multinational anti-avoidance
8
Income Tax Assessment Act 1936
8
Taxation Administration Act 1953
12
Schedule 3--Scheme penalties for significant global entities
13
Taxation Administration Act 1953
13
Schedule 4--Country-by-Country reporting
14
Income Tax Assessment Act 1997
14
No. , 2015
Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill
2015
1
A Bill for an Act to amend the law relating to
1
taxation, and for related purposes
2
The Parliament of Australia enacts:
3
1 Short title
4
This Act may be cited as the Tax Laws Amendment (Combating
5
Multinational Tax Avoidance) Act 2015.
6
2 Commencement
7
(1) Each provision of this Act specified in column 1 of the table
8
commences, or is taken to have commenced, in accordance with
9
column 2 of the table. Any other statement in column 2 has effect
10
according to its terms.
11
12
2
Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill
2015
No. , 2015
Commencement information
Column 1
Column 2
Column 3
Provisions
Commencement
Date/Details
1. The whole of
this Act
The day this Act receives the Royal Assent.
Note:
This table relates only to the provisions of this Act as originally
1
enacted. It will not be amended to deal with any later amendments of
2
this Act.
3
(2) Any information in column 3 of the table is not part of this Act.
4
Information may be inserted in this column, or information in it
5
may be edited, in any published version of this Act.
6
3 Schedules
7
Legislation that is specified in a Schedule to this Act is amended or
8
repealed as set out in the applicable items in the Schedule
9
concerned, and any other item in a Schedule to this Act has effect
10
according to its terms.
11
Significant global entities Schedule 1
No. , 2015
Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill
2015
3
Schedule 1
--Significant global entities
1
2
Income Tax Assessment Act 1997
3
1 After subsection 960-50(7)
4
Insert:
5
(7A) Despite subsections (6) and (7), an amount that is relevant for the
6
purposes of quantifying, for the purposes of section 960-565, the
7
*
annual global income of a
*
global parent entity as shown in
8
*
global financial statements for the entity is to be translated into
9
Australian currency at the average exchange rate applicable for the
10
period for which the statements are prepared.
11
(7B) For the purposes of subsection (7A):
12
(a) the entity must obtain:
13
(i) all of the exchange rates that it will use to work out the
14
average exchange rate; or
15
(ii) an average exchange rate that has been worked out for
16
the period referred to in that subsection;
17
from one or more sources that are not
*
associates of the
18
entity, and not the entity itself, or from one or more sources
19
specified by the Commissioner in a notice to the entity; and
20
(b) the entity must use the average exchange rate so worked out
21
in translating into Australian currency any amount referred to
22
in that subsection that is relevant to that period.
23
(7C) A notice under paragraph (7B)(a) is not a legislative instrument.
24
2 After subsection 960-50(9)
25
Insert:
26
(9A) Regulations made for the purposes of subsection (8) do not apply
27
to translating an amount into Australian currency under
28
subsection (7A), unless they provide otherwise.
29
3 At the end of Division 960
30
Add:
31
Schedule 1 Significant global entities
4
Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill
2015
No. , 2015
Subdivision 960-U--Significant global entities
1
Guide to Subdivision 960-U
2
960-550 What this Subdivision is about
3
Generally speaking, a significant global entity is:
4
(a)
a global parent entity with an annual global income of
5
$1 billion or more; or
6
(b)
any member of such a global parent entity's group.
7
Table of sections
8
Operative provisions
9
960-555 Meaning of significant global entity
10
960-560 Meaning of global parent entity
11
960-565 Meaning of annual global income
12
960-570 Meaning of global financial statements
13
Operative provisions
14
960-555 Meaning of significant global entity
15
(1) An entity is a significant global entity for a period if the entity is a
16
*
global parent entity:
17
(a) whose
*
annual global income for the period is $1 billion or
18
more; or
19
(b) in relation to whom the Commissioner makes a determination
20
under subsection (3) for the period.
21
(2) An entity is also a significant global entity for a period if:
22
(a) the entity is a member of a group of entities that are
23
consolidated for accounting purposes as a single group; and
24
(b) one of the other members of the group is a
*
global parent
25
entity:
26
(i) whose
*
annual global income for the period is $1 billion
27
or more; or
28
Significant global entities Schedule 1
No. , 2015
Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill
2015
5
(ii) in relation to whom the Commissioner makes a
1
determination under subsection (3) for the period.
2
(3) The Commissioner may make a determination under this
3
subsection in relation to a
*
global parent entity for a period if:
4
(a)
*
global financial statements have not been prepared for the
5
entity for the period; and
6
(b) on the basis of the information available to the
7
Commissioner, the Commissioner reasonably believes that, if
8
such statements had been prepared for the period, the entity's
9
*
annual global income for the period would have been $1
10
billion or more.
11
The Commissioner must give a notice of the determination to the
12
global parent entity, or to another entity that becomes a
*
significant
13
global entity as a result of the determination.
14
(4) An entity who is dissatisfied with a determination made in relation
15
to the entity may object against the determination in the manner set
16
out in Part IVC of the Taxation Administration Act 1953.
17
(5) However, if:
18
(a) there has been a taxation objection (within the meaning of
19
section 14ZL of the Taxation Administration Act 1953)
20
against an
*
assessment relating to the entity; and
21
(b) the assessment involved the application of section 177DA of
22
the Income Tax Assessment Act 1936 (schemes that limit a
23
taxable presence in Australia) in relation to the entity;
24
the right of objection under subsection (4) of this section is
25
unaffected, but the outcome of that objection has no effect on the
26
assessment or on the outcome of the taxation objection.
27
Note:
Section 14ZVA of the Taxation Administration Act 1953 excludes
28
from a taxation objection to an assessment any grounds (or potential
29
grounds) for an objection to a determination under subsection (3) of
30
this section.
31
(6) A determination under subsection (3) is not a legislative
32
instrument.
33
(7) Section 175 of the Income Tax Assessment Act 1936 (validity)
34
applies to a determination under subsection (3) of this section in
35
the same way as it applies to an
*
assessment.
36
Schedule 1 Significant global entities
6
Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill
2015
No. , 2015
960-560 Meaning of global parent entity
1
A global parent entity is an entity that, according to:
2
(a)
*
accounting principles; or
3
(b) if accounting principles do not apply in relation to the
4
entity--commercially accepted principles relating to
5
accounting;
6
is not controlled by another entity.
7
Note:
A global parent entity may be a single entity that is not a member of a
8
group of entities.
9
960-565 Meaning of annual global income
10
The annual global income of a
*
global parent entity for a period
11
is:
12
(a) if the entity is a member of a group of entities that are
13
consolidated for accounting purposes as a single group--the
14
total annual income of all the members of the group; or
15
(b) otherwise--the total annual income of the entity;
16
as shown in the latest
*
global financial statements for the entity for
17
the period.
18
960-570 Meaning of global financial statements
19
Global financial statements for a
*
global parent entity for a period
20
(the relevant period) are the financial statements that:
21
(a) have been prepared and audited in relation to that entity, or
22
that entity and other entities, in accordance with:
23
(i)
*
accounting principles and
*
auditing principles; or
24
(ii) if such principles do not apply--commercially accepted
25
principles, relating to accounting and auditing, that
26
ensure the statements give a true and fair view of the
27
financial position and performance of that entity (or that
28
entity and the other entities on a consolidated basis);
29
and
30
(b) are for the most recent period ending:
31
(i) no later than the end of the relevant period; and
32
(ii) no earlier than 12 months before the start of the relevant
33
period.
34
Significant global entities Schedule 1
No. , 2015
Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill
2015
7
4 Subsection 995-1(1)
1
Insert:
2
annual global income has the meaning given by section 960-565.
3
global financial statements has the meaning given by
4
section 960-570.
5
global parent entity has the meaning given by section 960-560.
6
significant global entity has the meaning given by
7
section 960-555.
8
Taxation Administration Act 1953
9
5 Section 14ZVA
10
Repeal the section, substitute:
11
14ZVA Limited objection rights because of other objections
12
If there has been a taxation objection against:
13
(a) a private ruling; or
14
(b) a determination under subsection 960-555(3) of the Income
15
Tax Assessment Act 1997;
16
the right of objection under this Part against an assessment, or
17
against a decision made under an indirect tax law or an excise law,
18
relating to the matter ruled or determined is limited to a right to
19
object on grounds that neither were, nor could have been, grounds
20
for the taxation objection against the ruling or determination.
21
Schedule 2 Multinational anti-avoidance
8
Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill
2015
No. , 2015
Schedule 2
--Multinational anti-avoidance
1
2
Income Tax Assessment Act 1936
3
1 Subsection 177A(1)
4
Insert:
5
associate has the same meaning as in Part X.
6
Australian customer, of a foreign entity, means another entity
7
who:
8
(a) is in Australia, or is an Australian entity; and
9
(b) if the foreign entity is a member of a global group--is not a
10
member of that global group.
11
Australian entity has the same meaning as in Part X.
12
Australian permanent establishment of an entity means:
13
(a) if:
14
(i) the entity is a resident in a country that has entered into
15
an international tax agreement (within the meaning of
16
subsection 995-1(1) of the Income Tax Assessment Act
17
1997) with Australia; and
18
(ii) that agreement contains a permanent establishment
19
article (within the meaning of that subsection);
20
a permanent establishment (within the meaning of that
21
agreement) in Australia; or
22
(b) otherwise--a permanent establishment of the person in
23
Australia.
24
entity has the meaning given by section 960-100 of the Income Tax
25
Assessment Act 1997.
26
foreign entity has the meaning given by subsection 995-1(1) of the
27
Income Tax Assessment Act 1997.
28
foreign law has the meaning given by subsection 995-1(1) of the
29
Income Tax Assessment Act 1997.
30
Multinational anti-avoidance Schedule 2
No. , 2015
Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill
2015
9
global group means a group of entities, at least one of which is a
1
foreign entity, that are consolidated for accounting purposes as a
2
single group.
3
significant global entity has the meaning given by section 960-555
4
of the Income Tax Assessment Act 1997.
5
supply has the meaning given by section 9-10 of the GST Act, but
6
does not include any of the following, or of any combination of 2
7
or more of the following:
8
(a) a supply of an equity interest in an entity;
9
(b) a supply of a debt interest in an entity;
10
(c) a supply of an option for:
11
(i) a supply of a kind referred to in paragraph (a) or (b); or
12
(ii) any combination of 2 or more such supplies.
13
2 Subsection 177A(5)
14
After "this Part", insert "(other than section 177DA)".
15
3 At the end of section 177CB
16
Add:
17
(5) Subsection (4) applies in relation to the scheme as if references in
18
that subsection to the operation of this Act included references to
19
the operation of any foreign law relating to taxation:
20
(a) if this Part applies to the scheme because of section 177DA;
21
or
22
(b) for the purposes of determining whether this Part applies to
23
the scheme because of section 177DA.
24
4 After section 177D
25
Insert:
26
177DA Schemes that limit a taxable presence in Australia
27
Scheme for a purpose including obtaining a tax benefit etc.
28
(1) Without limiting section 177D, this Part also applies to a scheme
29
if:
30
Schedule 2 Multinational anti-avoidance
10
Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill
2015
No. , 2015
(a) under, or in connection with, the scheme:
1
(i) a foreign entity makes a supply to an Australian
2
customer of the foreign entity; and
3
(ii) activities are undertaken in Australia directly in
4
connection with the supply; and
5
(iii) some or all of those activities are undertaken by an
6
Australian entity who, or are undertaken at or through
7
an Australian permanent establishment of an entity who,
8
is an associate of or is commercially dependent on the
9
foreign entity; and
10
(iv) the foreign entity derives ordinary income, or statutory
11
income, from the supply; and
12
(v) some or all of that income is not attributable to an
13
Australian permanent establishment of the foreign
14
entity; and
15
(b) it would be concluded (having regard to the matters in
16
subsection (2)) that the person, or one of the persons, who
17
entered into or carried out the scheme or any part of the
18
scheme did so for a principal purpose of, or for more than
19
one principal purpose that includes a purpose of:
20
(i) enabling a taxpayer (a relevant taxpayer) to obtain a tax
21
benefit, or both to obtain a tax benefit and to reduce one
22
or more of the relevant taxpayer's liabilities to tax under
23
a foreign law, in connection with the scheme; or
24
(ii) enabling the relevant taxpayer and another taxpayer (or
25
other taxpayers) each to obtain a tax benefit, or both to
26
obtain a tax benefit and to reduce one or more of their
27
liabilities to tax under a foreign law, in connection with
28
the scheme;
29
whether or not that person who entered into or carried out the
30
scheme or any part of the scheme is the relevant taxpayer or
31
is the other taxpayer or one of the other taxpayers; and
32
(c) the foreign entity is a significant global entity for a year of
33
income in which the relevant taxpayer, or one or more other
34
taxpayers, would (but for this Part):
35
(i) obtain a tax benefit; or
36
(ii) reduce one or more of their liabilities to tax under a
37
foreign law;
38
Multinational anti-avoidance Schedule 2
No. , 2015
Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill
2015
11
in connection with the scheme.
1
Have regard to certain matters
2
(2) For the purposes of paragraph (1)(b), have regard to the following
3
matters:
4
(a) the matters in subsection 177D(2);
5
(b) the extent to which the activities that contribute to bringing
6
about the contract for the supply are performed, and are able
7
to be performed, by:
8
(i) the foreign entity; or
9
(ii) another entity referred to in subparagraph (1)(a)(iii); or
10
(iii) any other entities;
11
(c) the result, in relation to the operation of any foreign law
12
relating to taxation, that (but for this Part) would be achieved
13
by the scheme.
14
Deferral of foreign tax liabilities
15
(3) For the purposes of paragraph (1)(b), a deferral of a taxpayer's
16
liabilities to tax under a foreign law is taken to be a reduction of
17
those liabilities, unless there are reasonable commercial grounds
18
for the deferral.
19
Tax benefit
20
(4) Despite subsection (1), this Part applies to the scheme because of
21
this section only if the relevant taxpayer has obtained, or would but
22
for section 177F obtain, a tax benefit in connection with the
23
scheme.
24
Commissioner not required to enquire into foreign tax matters
25
(5) The Commissioner is required to have regard to a matter referred
26
to in paragraph (2)(c) only so far as information relevant to that
27
matter is available to the Commissioner, and is not required to
28
acquire further information in order to have regard to that matter.
29
Schedule 2 Multinational anti-avoidance
12
Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill
2015
No. , 2015
Schemes outside Australia
1
(6) This section applies whether or not the scheme has been or is
2
entered into or carried out in Australia or outside Australia or
3
partly in Australia and partly outside Australia.
4
Taxation Administration Act 1953
5
5 After subparagraph 284-145(1)(b)(i) in Schedule 1
6
Insert:
7
(ia) for a scheme to which Part IVA of the Income Tax
8
Assessment Act 1936 applies because of section 177DA
9
of that Act--an entity that (alone or with others) entered
10
into or carried out the scheme, or part of it, did so for a
11
principal purpose of, or for more than one principal
12
purpose that includes a purpose of, that entity or another
13
entity getting a scheme benefit from the scheme; or
14
6 Paragraph 284-145(2A)(b) in Schedule 1
15
Omit "subparagraph (1)(b)(i) is not", substitute "neither
16
subparagraph (1)(b)(i) nor subparagraph (1)(b)(ia) is".
17
7 Application
18
(1)
The amendments made by this Schedule apply on or after 1 January
19
2016 in connection with a scheme, whether or not the scheme was
20
entered into, or was commenced to be carried out, before that day.
21
(2)
Despite subitem (1), the amendments made by this Schedule do not
22
apply in relation to tax benefits that a taxpayer derives before that day.
23
Scheme penalties for significant global entities Schedule 3
No. , 2015
Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill
2015
13
Schedule 3
--Scheme penalties for significant
1
global entities
2
3
Taxation Administration Act 1953
4
1 At the end of section 284-155 in Schedule 1
5
Add:
6
(3) However, the amount of the penalty is twice the amount worked
7
out under subsection (1) or (2) of this section if:
8
(a) you are a
*
significant global entity during an income year that
9
consists of, or includes all or part of, the accounting period to
10
which your
*
scheme shortfall amount relates; and
11
(b) it is not
*
reasonably arguable that the adjustment provision
12
does not apply.
13
2 Application
14
The amendment made by this Schedule applies in relation to any
15
scheme benefit that an entity gets in relation to an income year
16
commencing on or after 1 July 2015, whether the scheme to which the
17
scheme benefit relates was entered into, or commenced to be carried
18
out, before, on or after the commencement of that income year.
19
Schedule 4 Country-by-Country reporting
14
Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill
2015
No. , 2015
Schedule 4
--Country-by-Country reporting
1
2
Income Tax Assessment Act 1997
3
1 At the end of Division 815
4
Add:
5
Subdivision 815-E--Reporting obligations for significant global
6
entities
7
Guide to Subdivision 815-E
8
815-350 What this Subdivision is about
9
Significant global entities must give the Commissioner statements
10
under this Subdivision.
11
Note:
This Subdivision enables the implementation of measures issued by
12
the Organisation for Economic Cooperation and Development relating
13
to transfer pricing documentation and country-by-country reporting
14
(including Action 13 of the Action Plan on Base Erosion and Profit
15
Shifting of the G20 and the Organisation for Economic Cooperation
16
and Development)
17
Table of sections
18
Operative provisions
19
815-355 Requirement to give statements
20
815-360 Replacement reporting periods
21
815-365 Exemptions
22
Operative provisions
23
815-355 Requirement to give statements
24
(1) You must give to the Commissioner a statement of each of the
25
kinds referred to in subsection (3), in the
*
approved form, in
26
relation to an income year if:
27
Country-by-Country reporting Schedule 4
No. , 2015
Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill
2015
15
(a) you were a
*
significant global entity during a period that
1
includes the whole or a part of the income year that preceded
2
that income year; and
3
(b) you are, during that income year, any of the following:
4
(i) an Australian resident;
5
(ii) a resident trust estate for the purposes of Division 6 of
6
Part III of the Income Tax Assessment Act 1936;
7
(iii) a partnership that has at least one partner who is an
8
Australian resident;
9
(iv) a foreign resident who operates an Australian permanent
10
establishment (within the meaning of Part IVA of the
11
Income Tax Assessment Act 1936);
12
(v) a non-resident trust estate (within the meaning of
13
section 102AAB of the Income Tax Assessment Act
14
1936) that operates an Australian permanent
15
establishment (within the meaning of Part IVA of that
16
Act);
17
(vi) a partnership that operates an Australian permanent
18
establishment (within the meaning of that Part); and
19
(c) you are not exempted under section 815-365 from giving the
20
statement; and
21
(d) you are not included in a class of entities prescribed by the
22
regulations.
23
Note:
Under section 815-360, the Commissioner may allow you to give
24
statements in relation to a 12 month period other than an income year.
25
(2) You must give the statement within 12 months after the end of the
26
period to which it relates.
27
Note:
Section 388-55 in Schedule 1 to the Taxation Administration Act 1953
28
allows the Commissioner to defer the time for giving the statement.
29
(3) The statements are to be of the following kinds:
30
(a) a statement relating to the global operations and activities,
31
and the pricing policies relevant to transfer pricing, of:
32
(i) you; and
33
(ii) if you were a
*
significant global entity during the
34
preceding income year by virtue of your membership of
35
a group of entities--the other members of that group;
36
Schedule 4 Country-by-Country reporting
16
Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill
2015
No. , 2015
(b) a statement relating to your operations, activities, dealings
1
and transactions;
2
(c) a statement relating to the allocation between countries of the
3
income and activities of, and taxes paid by:
4
(i) you; and
5
(ii) if subparagraph (a)(ii) applies--the other members of
6
that group.
7
Note:
These statements correspond to the following in Annexes I, II and III
8
to Chapter V set out in the Guidance on Transfer Pricing
9
Documentation and Country-by-country Reporting of the Organisation
10
for Economic Cooperation and Development and the G20:
11
(a) a statement under paragraph (a) corresponds to the master file
12
(see Annexe I);
13
(b) a statement under paragraph (b) corresponds to the local file (see
14
Annexe II);
15
(c) a statement under paragraph (c) corresponds to the
16
country-by-country report (see Annexe III).
17
815-360 Replacement reporting periods
18
(1) The Commissioner may, by notice in writing, allow you to give all
19
statements, or specified kinds of statements, under section 815-355
20
in relation to a 12 month period other than an income year.
21
(2) A notice under subsection (1) is not a legislative instrument.
22
815-365 Exemptions
23
Exemptions for particular entities
24
(1) The Commissioner may, by notice in writing, exempt an entity
25
from:
26
(a) giving statements under section 815-355; or
27
(b) giving statements of a particular kind under that section.
28
(2) A notice under subsection (1) is not a legislative instrument.
29
General exemptions
30
(3) The Commissioner may, by legislative instrument, determine that
31
section 815-355 does not apply to a specified class of entity.
32
Country-by-Country reporting Schedule 4
No. , 2015
Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill
2015
17
2 Application
1
The amendments made by this Schedule apply in relation to income
2
years starting on or after 1 January 2016.
3