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Australian Miners: Diverted Profits Tax Law 'Flawed'

Monday, March 20, 2017

The Senate Economics Committee's March 20 decision to endorse the Government's legislation for a Diverted Profits Tax (DPT) represents a failure of Parliament to properly scrutinize the legislation, the Minerals Council of Australia has said.

The DPT was announced as part of the 2016-17 Budget and would be introduced from July 1, 2017. It targets multinational companies that enter into arrangements to divert their Australian profits to offshore related parties to avoid paying Australian tax. The DPT would apply to multinationals with global income of more than AUD1bn (USD764.6m) and Australian income of more than AUD25m. It will be applied at a rate of 40 percent and must be paid immediately.

The Council said: "There is wide agreement amongst Australia's most respected and knowledgeable tax experts that the legislation, as drafted, is badly flawed. The legislation will impose heavy compliance burdens and uncertainty on businesses investing in Australia and risks damage to Australia's reputation as a place to invest. Most disappointing is that the Australian tax community supported the original intent of the DPT, which was to target instances of uncooperative behavior by multinationals to delay resolution of transfer pricing disputes. Instead the proposed legislation represents a textbook case of regulatory overreach by Government."

"The legislation is poorly targeted cutting across Australia's transfer pricing and anti-avoidance rules. It introduces new and undefined concepts into the tax law with uncertain application with implications for legitimate commercial transactions. It represents an assault on procedural fairness by handing extraordinary new powers to the Australian Tax Office (ATO) without adequate oversight or protections for taxpayers doing the right thing. The DPT as drafted takes a coercive approach rather than one that will promote taxpayer co-operation. The DPT will confer unilateral powers on the ATO to raise tax assessments that are supported by minimal evidence of arm's length pricing and where genuine differences of view exist."

The Council said that the measure undermines the multilateral effort led by the OECD's Base Erosion and Profit Shifting initiative (BEPS) project to bring anti-avoidance rules and standards and rules up to date.

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Offshore Trusts Guide: Introduction

The History of Offshore Trusts
Development of Professional Competence in the Jurisdictions
What Future for the Trust?
The New Age of Transparency
The Swiss Association of Trust Companies
The Society of Trusts and Estates Practitioners

Offshore Trusts Guide: Jurisdictions

Bahamas

Bahamas: Legal Framework and Formation Rules and Fees
Bahamas: 2006 Private Trust Companies Legislation

Barbados

Barbados: Legal Framework and Formation Rules and Fees
Barbados: Supervisory and Licensing Regime and Fees

Bermuda

Bermuda: Legal Framework and Formation Rules and Fees
Bermuda: Supervisory and Licensing Regime and Fees

British Virgin Islands

British Virgin Islands: Legal Framework and Formation Rules and Fees
British Virgin Islands: Special Trusts Act 2003
British Virgin Islands: The Trustee Act 2003
British Virgin Islands: :Supervisory and Licensing Regime and Fees
British Virgin Islands: New Laws on Private Trust Companies
British Virgin Islands: New Private Trust Company Regulations

Cayman Islands

Cayman Islands: Legal Framework and Formation Rules and Fees
Cayman Islands: Supervisory and Licensing Regime and Fees

Cook Islands

Cook Islands: Legal Framework and Formation Rules and Fees
Cook Islands: Supervisory and Licensing Regime and Fees

Cyprus

Cyprus: Legal Framework and Formation Rules and Fees
Cyprus: Supervision, Licensing and Tax

Gibraltar

Gibraltar: Legal Framework and Formation Rules and Fees
Gibraltar: Legislation, Regulation and Supervision

Guernsey

Guernsey: Legal Framework and Formation Rules and Fees
Guernsey: Trusts Law 2007

Isle of Man

Isle of Man: Legal Framework and Formation Rules and Fees
Isle of Man: Supervisory and Licensing Regime
Isle of Man: Uses Clients and Tax Treatment

Jersey

Jersey: Legal Framework and Formation Rules and Fees
Jersey: Supervisory and Licensing Regime
Jersey: Trusts Amendment Act 2006
Jersey: Foundations

Liechtenstein

Liechtenstein: Legal Framework and Formation Rules and Fees
Liechtenstein: Regulation Supervision and Transparency
Liechtenstein: Characteristics of Liechtenstein Trusts
Liechtenstein: Foundations

Madeira

Madeira: Legal Framework and Formation Rules and Fees

Malta

Malta: Legal Framework and Formation Rules and Fees
Malta: The Trust and Trustees Act 2004

Mauritius

Mauritius: Legal Framework and Formation Rules and Fees
Mauritius: Characteristics of the 2001 Trusts Act
Mauritius: Additional Provisions of the 2001 Trusts Act
Mauritius: Tax Treatment

Monaco

Monaco: Legal Framework and Formation Rules and Fees

Nevis

Nevis: Legal Framework and Formation Rules and Fees

Panama

Panama: Legal Framework and Formation Rules and Fees
Panama: Requirements for Acting as Trust Company in Panama

Seychelles

Seychelles: Legal Framework and Formation Rules and Fees

Turks & Caicos

Turks & Caicos: Legal Framework and Formation Rules and Fees
Turks & Caicos: The Voidable Dispositions Ordinance

Vanuatu

Vanuatu Legal Framework and Formation Rules and Fees




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