Australia has launched a major initiative to look into the impact of tax minimisation strategies used by multinational corporations to reduce their effective corporation tax rates.
The Australian Government says it will examine how multinational corporations (MNCs) are potentially eroding the corporate tax base and present its findings for public consultation in mid-2013. A special tax task force has been set up, comprising of representatives from the business world, tax professionals, academia and the community sector to help with the inquiry.The move comes amid widespread concern that Australian businesses and families will face higher rates of tax to make up for any shortfall in tax revenue from MNCs.
Changes aheadMany of the key rules of international taxation such as source, permanent establishment and residency will be under scrutiny to ensure they can keep up with the changing business models and tax-planning arrangements used by MNCs.Australia is already introducing reforms to make its transfer-pricing rules more effective and relevant to the modern environment in which MNCs operate. It is also in the process of updating its general anti-avoidance rules to put an end to schemes entered into for the sole or dominant purpose of avoiding tax.MNCs operating in Australia should ensure they are up to date with all new developments in this area, as they could fundamentally alter the way they do business in the country.For more information:Roelof Van Der MerweNexia AustraliaT +61 3 9608 0177E email@example.com
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