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Australia To Strengthen Multinational Anti-Avoidance Law

Wednesday, February 14, 2018

The Australian Government is to tighten its Multinational Anti-Avoidance Law (MAAL) to prevent the use of certain structures to circumvent the law's application.

The Government has announced that it will prevent the use of foreign trusts and partnerships in corporate structures to avoid the application of the MAAL. It has released for public consultation draft legislation.

The MAAL took effect as of January 1, 2016. It 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 MAAL covers all multinationals operating in Australia with global revenues of more than AUD1bn (USD786m).

The new legislation is being introduced to ensure that the MAAL continues to operate as intended. The consultation closes on February 23.

To date, the Australian Taxation Office has identified 38 taxpayers that have brought or are bringing their Australian-sourced sales onshore in response to the MAAL.