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Australia Expands Multinational Anti-Avoidance Law

Wednesday, March 28, 2018

The Australian Government has introduced legislation to extend the reach of its Multinational Anti-Avoidance Law (MAAL) to cover a range of corporate structures.

The MAAL covers multinationals operating in Australia which have global revenues of more than AUD1bn (USD766.4m). The law is designed to prevent multinationals from avoiding Australian tax by using artificial or contrived arrangements to avoid having a taxable presence in the country. It requires companies that are deemed to have avoided tax to pay back double what they owe, plus interest.

The new legislation extends the MAAL to corporate structures that involve: foreign resident partners; or foreign trusts that temporarily have their central management and control in Australia.

The MAAL has been in place since January 1, 2016. To date, the Australian Taxation Office (ATO) has identified 38 large companies that have brought or are bringing their sales to Australian customers onshore in response to the MAAL. The ATO expects this to result in an additional AUD7bn in income being returned to the tax base each year.