On 9 February, the Australian government introduced the Treasury Laws Amendment (Combating Multinational Tax Avoidance) Bill 2017. The Diverted Profits Tax Bill 2017, which sets the 40% tax on profits, was also introduced.
Broadly, the new law will apply if:
a taxpayer has obtained a tax benefit in connection with a scheme in an income year;
the principal purpose, or one of the principal purposes of the scheme, is to obtain an Australian tax benefit or to obtain both an Australian and foreign tax benefit; and
none of the following tests apply: the $25m income test; a sufficient foreign tax test; and a sufficient economic substance test.
The DPT will apply to income years that start from 1 July 2017.
On 9 February, the Australian government introduced the Treasury Laws Amendment (Combating Multinational Tax Avoidance) Bill 2017. The Diverted Profits Tax Bill 2017, which sets the 40% tax on profits, was also introduced.
Broadly, the new law will apply if:
a taxpayer has obtained a tax benefit in connection with a scheme in an income year;
the principal purpose, or one of the principal purposes of the scheme, is to obtain an Australian tax benefit or to obtain both an Australian and foreign tax benefit; and
none of the following tests apply: the $25m income test; a sufficient foreign tax test; and a sufficient economic substance test.
The DPT will apply to income years that start from 1 July 2017.
