Miscellaneous 2017

Law, morality and multinationals

Source: The Tax Specialist Journal Article

Published Date: 1 Apr 2017


The rising political pressure against multinational enterprises (MNEs) that seek to minimise tax liabilities is a global phenomenon. In Australia, even fiscally conservative politicians have been caught up in the populist wave and have introduced a new diverted profits tax (DPT) to bolster the country's already strong anti-avoidance and transfer pricing rules. This article examines the OECD's series of actions to prevent MNEs from artificially shifting profits to low or no-tax locations and analyses the arm's-length principle in the Apple Inc case. The author questions why a DPT is necessary when the combination of Pt IVA, the multinational anti-avoidance law and Div 815 ITAA97 leave few gaps in the ATO's arsenal to deal with tax avoidance behaviour by MNEs. The author also argues that the DPT will only take the broad discretion of the ATO into unchartered waters.

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Miscellaneous 2017

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