The Turnbull Government will apply new requirements on foreign investment applications to ensure multinational companies investing in Australia pay tax here on what they earn according to the Treasurer Hon. Scott Morrison.
The Government is committed to ensuring companies operating in Australia pay tax on their Australian earnings, where companies fail to do so action will be taken including ordering divestment of Australian asset. Foreign investment applications will have to comply with Australian taxation law, Australian Taxation Office (ATO) directions to provide information in relation to the investment and advise the ATO if investors enter into any transactions with non-residents to which transfer pricing or anti avoidance measures of Australian tax law may potentially apply. Additional conditions may also be applied where a significant tax risk is identified in a particular case.
These may include requiring the investor to enter into advance pricing arrangements with or seek rulings from the ATO, or comply with other directions from the ATO that are specific to their circumstances. A breach of these conditions could result in prosecution, fines and potentially divestment of the asset. “The Turnbull Government is absolutely committed to ensuring that investors in Australia pay the required amount of tax. “Australians expect all entities operating in Australia to maintain the highest standards of corporate behaviour, irrespective of whether those entities are Australian or foreign owned.