Bills Digest no. 45 2015–16
PDF version [898KB]
WARNING: This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments. This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.
Jola Olender and Les Nielson
Economics Section
10 November 2015
Contents
The
Bills Digest at a glance
Structure and purpose of the Bill
Background
Policy position of non-government parties and
independents
Committee consideration
Financial implications
Schedule 1 – significant global entity
Schedule 2 – anti-avoidance measures
Key issues
Key provisions
Schedule 3 – increased penalties
Schedule 4 – Country-by-Country reporting
Concluding comments
Date introduced: 16
September 2015
House: House of
Representatives
Portfolio: Treasury
Commencement: The
day of Royal Assent.
Links: The links to the Bill,
its Explanatory Memorandum and second reading speech can be found on the
Bill’s home page, or through the Australian
Parliament website.
When Bills have been passed and have received Royal Assent, they
become Acts, which can be found at the ComLaw
website.
The Bill amends the Income Tax
Assessment Act 1997, the Taxation Administration Act 1953 and the Income
Tax Assessment Act 1936 to strengthen the tax avoidance law for certain
multinational entities.
The Bill introduces new concepts including ‘significant global entity’,
being an entity with annual global income exceeding $A1 billion
(Schedule 1). The anti-avoidance measures in other schedules to the Bill affect
‘significant global entities’.
The Bill introduces anti-avoidance measures to deal with ‘significant
global entities’ that put in place schemes to avoid having a taxable presence
in Australia (Schedule 2).
The Bill doubles the existing maximum penalties for ‘significant
global entities’ that avoid taxation in Australia (Schedule 3), including under
the changes made by Schedule 2. Penalties are not doubled for those entities
that adopt a tax position that is ‘reasonably arguable’.
The Bill requires ‘significant global entities’ to provide transfer
pricing documentation including financial reports on a country-by-country basis.
This is in line with international country-by-country reporting recommendations
recently made by the OECD and G20.
Abbreviations used in this Bills Digest
Table 1 Abbreviations
The Bill has four Schedules:
Schedule 1 amends the ITAA 1997 to introduce
the concepts of a ‘significant global entity’, ‘global parent entity’, ‘annual
global income’ and ‘global financial statements’. These concepts are relevant
in the substantive amendments made by the other schedules.
A ‘significant global entity’ is either a ‘global parent
entity’ with an ‘annual global income’ of $1 billion or more; or an entity that
is part of a group where there is a global parent entity with an annual global
income of $1 billion or more; or any entity determined to be a significant
global entity by the Commissioner of Taxation.
A ‘global parent entity’ is an entity that is not
controlled by another entity.
‘Annual global income’ is the total annual income,
translated into Australian currency, of all members of a group of entities, or
where there is not a group of entities, the total annual income of the entity.
The TAA 1953 is amended to limit the ability of an
affected taxpayer to make a taxation objection where the Commissioner of
Taxation has made a determination that an entity is a significant global entity.
Schedule 2 amends the ITAA 1936 and the TAA
1953 to expand the scope of the anti-avoidance provisions in Part IVA of
the ITAA 1936. The new anti- avoidance provisions deal with ‘significant
global entities’ that enter into schemes to limit their taxable presence in
Australia for the principal purpose or a principal purpose of obtaining
a tax benefit.
Schedule 3 amends the TAA 1953 to double the
maximum penalty faced by ‘significant global entities’ that enter tax avoidance
or profit shifting schemes under the anti-avoidance provisions in Part IVA of
the ITAA 1936. However, double penalties will not apply where the arrangements
adopted by the taxpayer can be reasonably argued to be a non-avoidance
arrangement.
Schedule 4 amends the ITAA 1997 to require
‘significant global entities’ to provide certain information about their financial
arrangements, including in other countries. These entities are required to
provide to the Commissioner of Taxation three statements that are reflective of
documents recommended by the OECD and the G20.
Media attention
This Bill aims to address multinational corporate tax
avoidance, an issue which has attracted considerable attention in recent years,
particularly for Google and Apple.[1]
A 2014 report of the Tax Justice Network alleged that the
200 largest publically listed entities in Australia had an effective tax rate
of 23 per cent over the last decade.[2]
Further, the report alleged that 29 per cent of these entities had an effective
tax rate of 10 per cent or less, and 14 per cent had an effective tax rate of 0
per cent.[3]
Unilateral measures implemented in the United Kingdom, known
as the ‘diverted profits tax’—often referred to as the ‘Google tax’—have led
some media outlets to ask whether Australia should implement similar measures.[4]
There has been media criticism that the measures in the
first three schedules of the Bill are pre-empting, and thereby undermining, OECD
efforts to reach international agreement on multinational tax avoidance.[5]
The OECD has been working since 2013 to develop domestic and international
instruments that aim to address corporate tax avoidance as part of its Base
Erosion and Profit Shifting (BEPS) package.[6]
Pascal Saint-Amans, Director of the Centre for Tax Policy and Administration at
the OECD, says:
These measures were not helpful ... and may not happen to [the]
extent that they will be superseded by BEPS measures.
BEPS is more consistent with what's been agreed
internationally, than what Australia currently has.
What do you do if you have existing domestic legislation is a
matter for your government, but you might find that such domestic measures
might not be useful any more.[7]
The Government maintains that the measures proposed in the
Bill are entirely consistent with the OECD’s BEPS package.[8]
US Government Official’s reaction
Robert Stack, Deputy Assistant Secretary (International
Tax Affairs) of the US Treasury, is quoted in The Sydney Morning Herald
as stating that unilateral measures by the UK and Australia are heading ‘in a
disturbing direction’.[9]
The report states:
Stack says 2015 will be a year in which the OECD will engage
in “horse-trading”. Or more unilateral moves.
Stack has condemned Britain's Google tax, and Australia's
multinational tax avoidance legislation, saying they had “shone a spotlight on
the degree to which political pressure can trump policy”.
...
As Stack said: If “two of our closest friends are going their
own way”, then “how soon until others follow”?[10]
Consultation paper, issues paper
and scoping paper
In November 2011, the Treasury released a consultation
paper, Income tax: cross border profit allocation - Review of transfer
pricing rules.[11]
The Treasury notes:
This Consultation Paper outlines the history of the transfer
pricing rules, as well as a number of suggested areas for change. These include
the introduction of an arm's length standard that reflects the international
norms, interpretation of new rules in a manner that best secures consistency
with OECD guidance and application of the new rules on a self-assessment basis.
The Consultation Paper further discusses other related issues
including methodologies for determining an arm's length outcome (as well as
criteria for their selection), comparability standards, and documentation and
penalty provisions.[12]
In December 2012, the Assistant Treasurer announced a
specialist reference group to examine tax minimisation by multinational
entities.[13]
The Treasury released an issues paper for public consultation in May 2013 which
sought to outline the challenges facing the international tax system regarding
tax avoidance and implications for Australia.[14]
In July 2013, the Treasury released a scoping paper which
assessed the risks to the sustainability of Australia’s corporate tax base in
light of the issues paper.[15]
The scoping paper concluded that ‘there are unlikely to be substantial
additional policy reforms that Australia could enact unilaterally in the short
term to address base erosion and profit shifting’.[16]
The scoping paper made four recommendations in relation to:
- public
release of tax statistics
- review
of bilateral tax treaties
- communication
between tax authorities and
- endorsement
of the OECD and Group of Twenty (G20) Base Erosion and Profit Shifting (BEPS)
Action Plan.[17]
2012–2013 measures
The Tax Laws Amendment (Cross-Border Transfer Pricing)
Act (No. 1) 2012 introduced the first stage of reform of the cross-border
transfer pricing rules.[18]
The Tax Laws Amendment (Countering Tax Avoidance and
Multinational Profit Shifting) Act 2013 introduced changes to the transfer
pricing rules and changes to the Part IVA anti-avoidance regime.[19]
The anti-avoidance regime was amended to remedy problems identified by judicial
interpretation.[20]
This Act also brought the transfer pricing tax regime into line with
international standard tax administration practice.[21]
OECD and G20 measures
The Australian Government has been involved in the G20 forum
which has been seeking to address multinational corporate tax avoidance. At the
request of the G20, the OECD published its Action Plan on Base Erosion and
Profit Shifting (Action Plan) in July 2013.[22]
The Action Plan concluded that there was a serious risk of erosion of corporate
tax bases internationally, noting that ‘current international tax standards may
not have kept pace with changes in global business practices’ and ‘the tax
practices of some multinational companies’.[23]
The Action Plan includes 15 action items and sets deadlines
to develop guidance on each, which the Labor Government agreed to in 2013.[24]
Of these actions, seven had deliverables that were due for completion in
September 2014 with the remaining deliverables to be completed by December
2015.[25]
The remaining BEPS measures were released on 5 October 2015.[26]
At the G20 Summit in Brisbane in November 2014, Australia
committed to the G20 and OECD’s BEPS Action Plan which is designed to
‘modernise international tax rules’ and address multinational corporate tax
evasion.[27]
In early September 2015, the Treasurer met with the G20 finance ministers,
recommitting to working with the other G20 nations to reduce multinational tax avoidance
and profit shifting and notifying the G20 of the proposed measures in the Bill.[28]
Senate Inquiry
On 2 October 2014, the Senate referred the issue of
corporate tax avoidance for inquiry by the Senate Economics References
Committee.[29]
The Senate granted an extension to the Committee which was due to report by
13 August 2015.[30]
The Committee’s final report is due by 30 November 2015.[31]
The Committee released an interim report, You cannot tax what you cannot see,
which was released on 18 August 2015. It made 17 recommendations over four
areas:[32]
- potential
areas of unilateral action to combat corporate tax avoidance
- multilateral
efforts to address tax avoidance and aggressive minimisation
- evidence
of tax avoidance and aggressive minimisation and
- capacity
of Australian Government agencies to collect corporate taxes.[33]
2015–16 Budget
The Bill covers three measures that were announced by the
Government in the 2015–16 Budget as part of the ‘Combating Multinational Tax
Avoidance’ package:
-
an anti-avoidance measure that aims to ensure that multinationals
entering into arrangements for a principal purpose of avoiding having a taxable
presence in Australia are still taxed in Australia[34]
-
transfer pricing documentation standards which were developed by
the OECD. Under these standards the Australian Taxation Office (ATO) will
receive information from multinationals about their global activities,
including country-by-country reporting of income and tax paid in every country
of operation[35]
and
- doubling the maximum penalty for multinationals that enter into
schemes for tax avoidance and profit shifting.[36]
Each of the above measures will apply to entities with
global revenue over $1 billion.[37]
Other elements in the 2015–16 Budget relating to multinational tax avoidance
included:
-
developing a public tax transparency code to complement country-by-country
reporting, which is being developed by the Board of Taxation
-
implementing treaty abuse rules developed by the OECD which aim
to address the exploitation of tax treaty rules by multinationals to avoid
taxation
-
anti-hybrids rules developed by the OECD to address the issue of
multinationals claiming a tax deduction in one country but not paying tax in
another because of different tax rules
- exchanging
information with other countries about harmful tax practices and preferential
tax deals[38]
and
- a
GST on digital products and services imported by Australian consumers to ‘help
level the playing field between domestic and international suppliers and ensure
that all suppliers pay a fair share of tax.’[39]
Exposure drafts
The Treasury released exposure drafts of the legislation on
12 May 2015 and 6 August 2015.[40]
Twenty submissions were received for the multinational anti-avoidance exposure
draft and fifteen submissions were received for both the country-by-country
reporting and tax avoidance penalties exposure drafts.[41]
The Bill differs considerably from the exposure drafts.
Australian Labor Party
In his second reading speech, the Shadow Assistant Treasurer
Dr Andrew Leigh stated that ‘Labor’s position is to support the Tax Laws
Amendment (Combating Multinational Tax Avoidance) Bill 2015’ although he suggested
that the measures did not go far enough.[42]
Kelvin Thomson stated that multinational tax avoidance is a global issue that
will require further measures such as tackling debt shifting, closing tax
loopholes and further resourcing the ATO to fight tax evasion.[43]
Tony Zappia said that addressing multinational tax avoidance ‘is not a case of
closing the loopholes in one particular country and that solving the problem;
we will only solve the problem if we are able to do it across the world.’[44]
A common concern raised in Labor’s second reading speeches is that better transparency
measures are needed to improve scrutiny of tax paid by multinationals. In
response to the introduction of this Bill the Shadow Assistant Treasurer stated
that Labor has put together a plan that:
...is inspired by work done by the OECD; it is costed by the
Parliamentary Budget Office; and it raises $7.2 billion over the course of the
next decade. Crucially, it deals with the issue of debt deductions.[45]
The Shadow Assistant Treasurer stated that Labor’s plan
addressed different issues on multinational taxation to the Bill.[46]
In March 2015, the Labor Party announced its plan to ‘shut down loopholes which
allow big multinational companies to send profits overseas, ensuring they pay
their fair share of tax, just like everyone else has to’.[47]
The package included:
-
changes to the arrangements for how multinational companies claim
tax deductions
-
greater compliance work by the ATO to track down and tackle
corporate tax avoidance
-
cracking down on multinational companies using hybrid structures
to reduce tax and
-
improved transparency and data matching[48]
A second reading amendment was moved by Dr Andrew Leigh for
the Government to adopt Labor’s multinational tax plan in addition to the Bill.[49]
This proposal was negatived.[50]
In relation to country-by-country reporting the Labor Party says:
Labor will support efforts to establish an international
agreement to require tax authorities to share information about individuals and
corporations suspect of tax evasion or money laundering. Labor supports the
growing global trend of requiring oil, gas and extractive industry companies to
report publicly on their revenue, profits as well as taxes and royalties paid
on a country-by-country basis.[51]
Australian Greens
Adam Bandt considers that the Bill does not go far enough. He
says that the public scrutiny of multinationals through transparency measures
should be the Government’s priority, as transparency changes ‘are unilateral
measures that Australia can take straight away without disrupting... multilateral
discussions, while also showing that Australia is serious about confronting
this global blight on governments.’[52]
The Greens advocate for action on tax avoidance, stating ‘we
must ensure we do everything we can domestically to ensure everyone–big
companies included–pay their share of tax’.[53]
One of the proposals put forward by the Greens was:
[r]equiring country-by-country and project-by-project
reporting of payments.... Consolidated annual reports would need to include
revenues, profits, staffing levels and taxes paid in each country in which they
operate or have subsidiaries. These reports should be made public for the
benefit of investors, those that need to do business with multinational
enterprises and to ensure the confidence of the general public that profits of
multinational enterprises are being taxed where the economic activities
deriving the profits are performed and where value is created.[54]
Senate Standing Committee for the
Scrutiny of Bills
The Senate Standing Committee for the Scrutiny of Bills commented
on the Bill on 14 October 2015.[55]
The scrutiny issue outlined was that of the retrospective commencement of Schedule
3.[56]
The Senate Standing Committee notes that the justification for retrospective
commencement is not addressed by the Explanatory Memorandum to the Bill beyond
noting that it was announced in the Budget.[57]
Senate Economics Legislation
Committee
The Bill was referred to the Senate Economics Legislation
Committee on 16 September 2015.[58]
The Committee is due to report on 9 November 2015.[59]
At the time of writing, 16 submissions had been published.
The major themes of these submissions are:
-
some submissions considered that the Bill is a step in the right
direction, but that more needs to be done to ensure that the correct amount of
tax is collected from multinational entities operating in Australia[60]
-
the majority of submissions noted that the most effective action
in this area would be for all affected countries to act at the same time in
accordance with the OECD’s recommendations arising from the BEPS Project.
Consequently, some of the measures in this Bill were seen as unilateral action
by Australia in advance of OECD recommendations. That said, all such submissions
supported the country-by-country reporting provisions[61]
-
all submissions from professional accounting and industry bodies
recommended substantial technical changes to the Bill’s provisions and
-
one submission considered that the Bill ‘merely tinkers at the
edge of the law by proposing insignificant changes to an inherently obtuse and
uncertain anti-avoidance provision’.[62]
The Explanatory Memorandum says that the financial impact
of the measures are either nil or unquantifiable over the four years to 2018-19
(Table 2).
Table 2 Financial Impact of (i) the significant global
entity definitions (ii) multinational anti-avoidance measures (iii) increased
penalties and (iv) Country-by-Country reporting 2014-15 to 2018-19 ($ million)
|
2014–15
|
2015–16
|
2016–17
|
2017–18
|
2018–19
|
Significant global entity
|
Nil
|
Nil
|
Nil
|
Nil
|
Nil
|
Multinational anti-avoidance law
|
-
|
*
|
*
|
*
|
*
|
Stronger penalties
|
-
|
-
|
*
|
*
|
*
|
Transfer pricing documentation
|
-
|
-
|
*
|
*
|
*
|
Source: Explanatory
Memorandum, Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill
2015, pp. 7–10.
The decision to record no estimate of the financial
impact, which is unusual, likely reflects the difficulty of forecasting the
effect of these measures rather than that they have nil impact. The
Commissioner of Taxation, speaking on the introduction of these measures into
parliament, said:
We know there are billions of dollars of sales revenue that
are not being booked here in Australia. Now that is the gross element. Because
of the nature of their point that they’re not subject to tax here, we don't
have a lot of information around their cost structure. So these aren't the
typical transfer pricing ones that book sales here and then back out a lot of
the profit by the costs of goods. You would have seen some of that in the
Senate inquiries, in some of the companies, and some of the industries. So we
know there are billions of dollars. That’s gross. So we have to look at what
the profit element of that is and have a much better understanding of their
true cost of sales, not some inflated cost of sales with a lot of that going
through to tax. So we would expect hundreds of millions of dollars’ worth of
revenue at least, but it’s billions of dollars of sales. But you have to make
sure you understand the difference between the gross sales figure and the profit
figure which is subject to tax.[63]
The government is expecting that significant additional
revenue will be collected as a result of the proposed changes, but the opaque
nature of the sales revenues earned by affected entities makes the expected
revenue difficult to calculate. The Prime Minister on 15 October 2015 stated:
In terms of the specific multinational measures, the base
erosion and profit shifting measures, the Commissioner of Taxation himself has
said that he expects them to raise hundreds of millions of dollars in
additional revenue. Time will tell, but we are very comforted by the forecast
he has given.[64]
Current law
Section 960-50 ITAA 1997 sets out the method of
translating a ‘foreign currency’ into Australian currency.[65]
Division 960 ITAA 1997 is in Part 6-1, entitled ‘Concepts and Topics’. The
TAA 1953, ITAA 1936 and ITAA 1997 currently do not contain
any references to a ‘significant global entity’, ‘global parent entity’,
‘annual global income’ or ‘global financial statements’.
History
Context of the Schedule
The concept of ‘significant global entity’ was not
discussed prior to the introduction of the Bill. However the reforms were
intended to apply to entities with global revenue over $1 billion.[66]
The Assistant Treasurer stated on 18 May 2015:
Multinationals with revenue over $1 billion, which covers 90
per cent of all multinationals' revenue in Australia, will be subject to a new
stronger anti-avoidance rule. This will capture artificial or contrived
arrangements that are designed to avoid a taxable presence in Australia.[67]
Position of major interest groups
The concepts introduced by Schedule 1 of this Bill were not
part of the exposure drafts.
Shine Wing Australia, an accountancy group, states that:
Whilst these measures are aimed at multinational groups, a
strict reading of the Bill suggests that Australian taxpayers with no overseas
operations (but breach the income threshold) will also meet the definition of a
significant global entity.
...
Furthermore, the proposed rules will apply to Australian
entities with consolidated revenue exceeding AUD$1 billion but have
immaterial overseas operations. A de minimis exemption, similar to that
contained in the thin capitalisation provisions, is strongly recommended. An
exception of this nature will significantly reduce the unnecessary
administrative burden for both taxpayers and the ATO.[68]
DLA Piper raised concern as to consistency of application of
the Bill:
As meeting the definition of a 'significant global entity' is
based on yearly financial reports, the same entity may fall in and out of this
definition from year to year. This will mean that in some years the measures
contained in the Bill will not apply to that entity, and in other years it
will, creating a complex situation for some where different tax laws apply from
one year to the next.[69]
Key issues
A number of issues have been raised in relation to the
proposed amendments in Schedule 1:
-
the definition of ‘significant global entity’ does not require an
entity to have operations in more than one country and as such it may catch
wholly Australian entities operating only within Australia if they have an
annual income of at least $1 billion.[70]
The other side of this concern is that any implied exclusion of wholly
Australian entities, operating in Australia, from the proposed measures may be
seen as unfairly favouring such entities, at the expense of multinational
companies. Such a situation may be seen as providing discriminatory tax
treatment
-
there is no distinction between public and private entities. If
there were a distinction, this may also raise objections of discriminatory tax
treatment
-
the definition of ‘significant global entity’ is broad. Companies
that have businesses in Australia quite separate to the rest of the group may
be within the definition’s ambit. Also if an Australian supplier is a small
part of the global activities of a multinational it would also be subject to
the definition.[71]
However, the Explanatory Memorandum addresses this by pointing out that, while
an Australian business may only be a small part of a multinational enterprise,
it is likely to contribute to the profits of that enterprise, even if its
activity is unrelated to the group’s activities. It is the existence of such Australian
businesses, with little apparent connection to the main activity of their
multinational group, being used to unduly reduce the tax payable of the larger
entity, which has prompted the proposed changes[72]
and
-
as the definition of ‘significant global entity’ is based on
financial reports, an entity may fall in or out of the definition from year to
year as its income changes, meaning that the proposed provisions may apply one
year but not the next. Complicated situations may possibly arise where different
laws apply from one year to the next.[73]
Key provisions
Item 3 inserts proposed Subdivision 960-U into
Part 6-1 (entitled Concepts and Topics) of the ITAA 1997 to define new
terms that are used in the other Schedules of the Bill. The new terms are
‘annual global income’, ‘global financial statements’ ‘global parent entity’
and ‘significant global entity’.
Item 1 of Schedule 1 inserts proposed
subsections 960-50(7A)-(7C) into section 960-50 ITAA 1997. The amendment
requires that the ‘annual global income’ of a ‘global parent entity’, as shown
in ‘global financial statements’ be translated into Australian dollars for the
purpose of determining whether an entity is a ‘significant global entity’.
Significant global entity (proposed
section 960-555)
There are two limbs to the definition of ‘significant
global entity’, as defined in the Bill.
First, a ‘significant global entity’ is a ‘global parent
entity’ with ‘annual global income’ for a period (usually a year) of at least $1
billion or that the Commissioner for Taxation has declared to be a ‘global
parent entity’ under proposed subsection 960-555(3).
Second, a ‘significant global entity’ is an entity that is
a member of a group of entities (determined by being a group consolidated for
accounting purpose as a single group) where one of the members is a ‘global
parent entity’ with ‘annual global income’ for the period of at least $1
billion or in relation to which the Commissioner has made a determination that
it is a ‘global parent entity’ under the above proposed subsection.
A ‘significant global entity’ under this definition does
not have to be the head entity of a group. Consequently, an Australian
subsidiary of a group can be assessed as being a ‘significant global entity’,
despite not being the head office of the group of entities of which it is a
part. Nor do the activities of such an Australian subsidiary need to have any
continuity with the activities of the rest of the group. It is enough that the
Australian subsidiary is part of such a group.
Global parent entity (proposed
section 960-560)
The definition of ‘significant global entity’ depends on the
definition of a ‘global parent entity’. A ‘global parent entity’ is defined to
be an entity that is not controlled by another entity. The assessment of
control is to be made under accounting principles or, if accounting principles
do not apply, under commercially accepted principles related to accounting.
Accounting principles
Section 955-1 ITAA 1997 specifies that accounting
principles are either the accounting standards in the Corporations Act 2001
or ‘authoritative pronouncements of the Australian Accounting Standards Board
(AASB) that apply to the preparation of financial statements’. According to the
definition of ‘accounting standard’ in section 9 of the Corporations Act 2001,
accounting standards refer to either an instrument in force under section 334
of the Corporations Act 2001, or a provision of such an instrument as it
so has effect. [74]
Neither the Explanatory Memorandum nor the second reading speech specifies
which particular AASB standards or instruments would be relevant to defining
when an entity is not controlled by another entity.[75]
Commissioner can determine that a
‘global parent entity’ is a ‘significant global entity’ (proposed subsection
960-555(3)
Item 3 of Schedule 1 introduces proposed
subsection 960-555(3), which empowers the Commissioner for Taxation to
declare an entity to be a ‘significant global entity’.
The conditions for such a determination to be made are
that a ‘global financial statement’ for a given period has not been prepared
and, on the basis of the available information, it is reasonable for the
Commissioner to conclude that if such a statement had been prepared, that
entity’s ‘annual global income’ would have been at least $A1 billion.
Under proposed subsection 960-555(4), if an entity
is dissatisfied with the Commissioner’s determination under proposed
subsection 960-555(3), it may object to it (that is, appeal it).
However, the basis for, and impact of, an objection under proposed
subsection 960-555(4) are limited by proposed subsections 960-555(5)
and (7).
Proposed subsection 960-555(5) relates to
situations where there has been an objection made to a taxation assessment
relating to the entity, and that assessment involved the application of proposed
section 177DA of the ITAA 1936 (introduced by item 4, Schedule 2).
Proposed section 177DA of the ITAA 1936 sets out when a scheme
may be considered to have a principal purpose of obtaining a tax benefit. In
such circumstances, the entity retains the right to object, under proposed
subsection 960-555(4), to the Commissioner’s determination that it is a
‘significant global entity’, but the outcome of that objection has no impact on
the taxation assessment or on the outcome of the objection to that assessment.
Annual global income (proposed section 960-565 ITAA 1997)
‘Annual global income’ of an entity is defined as follows:
-
if the entity is a member of a group of entities that are
consolidated for accounting purposes as a single group—the total annual income of
the group or
-
if the entity is a not member of a group of entities—the total
annual income of the entity.
‘Total annual income’ is as shown in the latest ‘global
financial statements’ for the entity for the period.
Under proposed subsection 960-50(7A) (Item 1),
the amounts must be expressed in Australian dollars.
Global financial statements (proposed
section 960-570)
‘Global financial statements’ is defined to be financial
statements of a ‘global parent entity’, or that entity and other entities
(presumably consolidated together for accounting purposes) that:
-
have been prepared in accordance with both accounting and
auditing principles
-
if such principles do not apply—have been prepared in accordance
with commercially accepted principles, relating to accounting and auditing,
that ensure that these statements give a true and fair view of the financial
position and performance of that entity; or that entity and another entity
consolidated together for accounting purposes and
-
are for the most recent period ending no later than the end of
the relevant period and no earlier than 12 months before the start of the
relevant period.
These statements are to be prepared under both the
relevant accounting standards (discussed above) and auditing standards. The
Explanatory Memorandum notes:
Accounting principles’ and ‘auditing principles’ are linked
to definitions of ‘accounting standards’ and ‘auditing standards’ in sections
334 and 336 of the Corporations Act 2001. These definitions refer to
standards set by the Australian Accounting Standards Board and the Auditing and
Assurance Standards Board.[76]
As required under Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the
Schedule’s compatibility with the human rights and freedoms recognised or
declared in the international instruments listed in section 3 of that Act. The
Government considers that the Schedule is compatible.[77]
The Parliamentary Joint Committee on Human Rights
considers that the Bill does not raise human rights concerns.[78]
Schedule 2 adds a new kind of tax avoidance to the
general anti-avoidance regime in Part IVA of the ITAA 1936.
Part IVA, in general terms, deals with schemes having the sole
or dominant purpose of obtaining a tax benefit.
Schedule 2 targets a particular kind of tax
avoidance: schemes entered into by ‘significant global entities’ for the principal
purpose of limiting a taxable presence in Australia.
Current law
Currently, Part IVA of the ITAA 1936 contains the
general anti-avoidance rules (GAARs) relating to income tax.[79]
The Bill proposes to insert a new provision into Part IVA ITAA 1936 and
amend some existing provisions.
General anti-avoidance rules have operated for many years
in most other common law jurisdictions, including Hong Kong (sections 61 and
61A of the Inland Revenue Ordinance), Canada (section 245 of the Canadian
Income Tax Act), New Zealand (sections BG1 and GB1 of the New Zealand Income
Tax Act 1994), South Africa (sections 80A to 80L of the Income Tax Act
1962) and Australia, to name a few.[80]
Currently, the anti-avoidance provisions may be applied
where:
- a
‘scheme’ is identified[81]
- a
‘tax benefit’ in connection with a scheme has been obtained[82]
-
the scheme has one of the effects specified in Part IVA ITAA
1936 and
-
the scheme has been, or was entered into, after 27 May 1981.[83]
The anti-avoidance provisions apply regardless of whether
some or all of a scheme was set up inside or outside Australia.[84]
The existing general anti-avoidance provisions in section
177D in Part IVA ITAA 1936 deal with schemes entered into for the sole
or dominant purpose of obtaining a tax benefit. [85]
The ‘sole or dominant purpose’ test has been a difficult
one for the administration of Part IVA ITAA 1936, as the following
comments from the Commissioner for Taxation suggest:
We have a lower standard, the existing anti-avoidance laws
require the sole or dominant purpose test. Over the years that's been
[inaudible] down somewhat by the courts and was a very difficult test for us to
meet.[86]
That is, it has been difficult for the Commissioner to prove
that an entity has undertaken a scheme, for the ‘sole or dominant purpose’ of
obtaining a tax benefit.
The amendments made by this schedule of the Bill apply a
different test—the principal purpose test—for ‘significant global entities’ that
enter schemes to limit their taxable presence in Australia. That is, the new
anti‑avoidance provisions for ‘significant global entities’ apply to
schemes where the principal purpose is to obtain a tax benefit. If there is
more than one principal purpose, it is sufficient if one of the purposes is to
obtain a tax benefit (proposed paragraph 177DA(1)(b)).
Scheme
A scheme is broadly defined to be any agreement,
arrangement, understanding, promise or undertaking, whether it was express or
implied, or enforceable or intended to be enforceable.[87]
Scheme also includes any scheme, plan, proposal, action, course of action or
course of conduct.[88]
There are a number of possible tax benefits (also referred
to as tax effects), including:
- an
amount not being included in the assessable income of the taxpayer where that
amount would have been included, or might reasonably be expected to have been
included without the scheme
- a
deduction being allowable to the taxpayer where the whole or a part of that
deduction would not have been allowable without the scheme
- a
capital loss being incurred by the taxpayer where the whole or a part of that
capital loss would not have been, or might reasonably be expected not to have
been, incurred without the scheme
- a
foreign income tax offset being allowable to the taxpayer where the whole or a
part of that foreign income tax offset would not have been allowable, or might
reasonably be expected not to have been allowable, without the scheme
- an
exploration credit being issued to the taxpayer where the whole or a part of
that exploration credit would not have been issued, or might reasonably be
expected not to have been issued, without the scheme and
- the
taxpayer not being liable to pay withholding tax on an amount where the
taxpayer either would have, or might reasonably be expected to have, been
liable to pay withholding tax without the scheme.[89]
In assessing whether any of these tax benefits occurred in
connection with a scheme, a comparison is made with a postulate.[90]
When assessing whether a tax benefit would not have occurred without the
scheme, the postulate can only comprise events or circumstances which actually
happened or existed (except for those that are part of the scheme).[91]
When assessing whether it would be reasonable to expect that a tax benefit
would not have occurred without the scheme, the postulate must be a reasonable
alternative to the scheme.[92]
Types of schemes
For the anti-avoidance measures to apply to a scheme, it
must be concluded to have one of the following effects:
- the
scheme was set up for the purpose of obtaining a tax benefit in connection with
the scheme and a tax benefit was obtained[93]
- stripping
of a company’s profits[94]
- creation
of franking debit or cancellation of franking credits[95]
or
- cancellation
of franking credits in a consolidated group[96]
Determinations by the Commissioner
of Taxation
Where a scheme in connection with a tax benefit is concluded
to have occurred, the Commissioner of Taxation is able to make a number of
determinations.[97]
Generally, determinations can be made for:
- an
amount that is to be included in the assessable income of a taxpayer
- a
taxpayer to be subject to an amount of withholding tax
- an
amount not to be included in the assessable income of a taxpayer[98]
- a
deduction of a taxpayer should have been or should have not been allowed[99]
- a
capital loss that should be incurred by a taxpayer
- all
or some of a foreign income tax offset should have been or should have not been
allowed[100]
or
- some
or all of a franking credit in relation to an exploration credit not be allowed.[101]
History
History of Part IVA ITAA 1936
The predecessor to Part IVA was section 260 of the ITAA
1936, a comparatively short section which provided that ‘every contract,
agreement or arrangement was absolutely void as against the Commissioner of
Taxation insofar as it had, or purported to have, a certain purpose or effect.’[102]
That purpose or effect was one of the following:
(a) altering the incidence of
any income tax;
(b) relieving any person from
liability to pay any income tax or make any return;
(c) defeating, evading or
avoiding any duty or liability imposed on any person by this Act; or
(d) preventing the operation
of this Act in any respect.[103]
The provision is thought to have antecedents dating back
to 1915, or possibly even 1895.[104]
Part IVA replaced section 260 in 1981 by way of the Income Tax Laws
Amendment Act (No. 2) 1981.[105]
A number of decisions by the High Court of Australia found limits to the
operation of section 260, which resulted in the provision being largely
ineffective.[106]
The introduction of Part IVA was designed to overcome these limitations.[107]
The Explanatory Memorandum to the Bill stated that the purpose of Part IVA was
to be:
...an effective general measure against those tax avoidance
arrangements that... are blatant, artificial or contrived. In other words, the
new provisions are designed to apply where, on an objective view of the
particular arrangement and its surrounding circumstances, it would be concluded
that the arrangement was entered into for the sole or dominant purpose of
obtaining a tax deduction or having an amount left out of assessable income.[108]
When first legislated, Part IVA applied where a
determination by the Commissioner of Taxation was made under section 177F of
the ITAA 1936. There were two express thresholds in making a
determination; first, that a ‘tax benefit’ had been or would have been obtained
if not for the application of Part IVA itself and second, that the tax benefit
was obtained in connection to a ‘scheme’ to which Part IVA applied.[109]
Part IVA, as legislated in 1981, listed two types of tax
benefits: deductions allowed because of the scheme, and amounts not included in
assessable income because of the scheme.[110]
Avoidance of withholding tax was added to the list of tax benefits in 1998,[111]
capital losses[112]
and foreign tax credits were added to the list in 1999[113]
and exploration credits were added in 2015.[114]
In 2013, amendments were made to Part IVA to clarify the definition of ‘tax
benefit’ in response to issues identified by the courts.[115]
Part IVA ITAA 1936 is designed to counter
arrangements that are entered into for the dominant purpose of avoiding tax.[116]
There are also specific provisions in Division 815 of the ITAA 1997 that
govern multinational intra‑company dealings, such as transfer pricing,
thin capitalisation and the arm’s length principle. Legislative reform in 2012–13
aimed to strengthen and clarify the general anti-avoidance rules in ITAA
1936, and to tighten the cross-border transfer pricing regime in the ITAA
1997 to bring it into line with international standards.[117]
Context of the changes made by Schedule
2
On the day before the Budget announcement of these
measures, the Treasurer announced that the proposed multinational
anti-avoidance provisions were designed to address ‘the activities of 30
identified multinational companies’.[118]
The Treasurer noted that the proposed measures were consistent with OECD
directions.
The Assistant Treasurer stated on 18 May 2015:
Unlike the existing Part IV(A) (sic) of the Tax Act which
only applies to an arrangement where the sole or dominant purpose is the
avoidance of Australian tax obligations, the new rule applies to a broader set
of circumstances based on a principle (sic) purpose test.[119]
A 2014 OECD report, Preventing the Granting of Treaty Benefits in Inappropriate
Circumstances,[120] was
developed under action item six of BEPS (preventing treaty abuse) and
recommends the use of a ‘principal purpose test’ for assessing whether
transactions or arrangements constitute treaty abuse.[121]
In particular, the OECD recommended that:
...the benefits of a tax convention should not be available
where one of the principal purposes of certain transactions or arrangements is
to secure a benefit under a tax treaty and obtaining that benefit in these
circumstances would be contrary to the object and purpose of the relevant
provisions of the tax convention.[122]
Position of major interest groups
Reactions to exposure draft
The Tax Institute
The Tax Institute was supportive of Australia addressing
issues in international tax law but considered that the ‘Exposure Draft seeks
to move ahead of the OECD process which has better prospects of effectively
addressing deficiencies as it involves multilateral cooperation.’[123]
Further, the Tax Institute stated that ‘[t]he proposed measure could garner a
negative reaction from other countries jeopardising the likelihood of a
consistent approach to these issues globally.’[124]
The Tax Institute also raised the following concern:
By deeming a permanent establishment to exist in Australia,
the proposed rule sits contrary to our permanent establishment/business profit
articles in our treaties, where marketing activities are insufficient to create
a taxable presence in Australia. The OECD, through its work on Action 7 of its
BEPS Action Plan, have recognised that the definition of permanent
establishment in our treaties may be deficient and are working to modernise the
definition by September 2015. Further OECD work is also planned to provide
additional guidance on how profits should be allocated to those newly defined
permanent establishments before the end of 2016.[125]
The Tax Institute considered that the ‘principal purpose’
test in the exposure draft’s proposed subsection 177DA(1) was inconsistent with
the ‘sole or dominant purpose’ requirement in Part IVA.[126]
It stated that ‘[o]n its face, “principal” would appear to be equally if not
more strict than “dominant”’ and considered this to be inconsistent with the
Explanatory Memorandum which suggested that the proposed threshold was lower
than the existing Part IVA threshold.[127]
Ernst & Young
Ernst & Young (EY) submitted that the proposals in the
Exposure Draft should not be enacted as:
it will have a negative impact on foreign investment into Australia
by creating uncertainty and the arrangements targeted by the Exposure Draft
should be dealt with on a multi-lateral basis in accordance with the outcomes
of the OECD Action Plan on Base Erosion and Profit Shifting [BEPS].[128]
EY also submitted that:
The proposed law increases the risk of double taxation and
therefore has the capacity to deter foreign investment.
Existing structures should be grand-fathered and not be
subject to retrospective law change, alternatively taxpayers with such
structures should not be subjected to punitive tax penalties.
In line with GST changes for the Digital Economy announced in
the Federal Budget, the proposed start date for the new rules should be
deferred until 1 July 2017 to give both taxpayers and the ATO adequate time to
prepare for the operation of the new rules.[129]
Law Council of Australia
The Law Council of Australia stated that the exposure
draft ‘does not accord with, and in many respects derogates from, key design
principles for a fair and effective tax and transfer system.’[130]
It said that ‘[i]t is not appropriate’ for the exposure draft ‘to tax
non-resident taxpayers on a fiction of its supplies to Australian customers
being made through an Australian PE [permanent establishment].’[131]
It also expressed concern that ‘the proposed provisions... have retrospective
application’.[132]
Further, the Law Council of Australia was of the view that the proposed
provisions in the exposure draft were ‘complex and difficult to understand’ and
that they:
...may apply where the person or persons entering into or
carrying out the scheme has / have no or only an incidental purpose of enabling
the taxpayer to obtain an Australian income tax benefit.[133]
The Tax Justice Network
The Tax Justice Network says that the proposed measures in
the exposure draft did not go far enough, stating that:
...TJN-Aus [Tax Justice Network Australia] does not believe
this draft legislation on its own is enough to address the problem and
encourages the government to continue to develop legislation, regulation and
enforcement tools
...
Under subsection 177DA (1d), TJN-Aus [Tax Justice Network
Australia] believes the amendment should apply to MNES [multinational
enterprises] that meet the ATO definition of a large business in terms of their
global revenue, which would mean applying it to a non-resident with global
revenue in any particular year of $250 million instead of the current threshold
of $1 billion.[134]
Reactions to the Bill
Minter Ellison
Minter Ellison states:
It is notable that a number of the... requirements [which need
to be met before the proposed provisions are applicable] contain terms that are
either currently defined in Australian tax law (such as ordinary income or
statutory income), or are not defined (such as commercially dependent) and will
be subject to interpretation by the Commissioner, and eventually, no doubt, the
courts. This requires multinational Boards to seek advice and carefully
navigate the proposed provisions when assessing risk in Australia.
...
It is also notable that foreign taxes are taken into
consideration, but interestingly 'only so far as information relevant to
foreign tax is available to the Commissioner' and the Commissioner is not
required to make inquiries. This places a burden on a taxpayer to provide
evidence to the Commissioner about tax paid under foreign law.[135]
Further, Minter Ellison anticipates that the construction of
an Australian permanent establishment for some or all of the activities
undertaken by a foreign entity will ‘be the source of controversy and dispute’.[136]
Institute of Chartered Accounts of
Scotland
Donald Drysdale of the Institute of Chartered Accounts of
Scotland notes:
Although this Australian measure is not a separate diverted
profits tax along the lines of the UK's DPT [diverted profits tax], the proposal
reflects some of the thinking behind the first limb of the UK legislation,
namely, the avoidance of a permanent establishment in the country.[137]
DLA Piper
DLA Piper states that ‘[t]he Bill casts a decidedly wider
net over multinationals than the Exposure Draft and ‘[t]he amount of companies
to which the new anti-avoidance rules will likely apply has increased from 30,
as announced during the Budget, to a reported 1,000 companies under the tougher
legislation.’[138]
DLA Piper further states:
Australia’s current general anti-avoidance rule in Part IVA
only applies to schemes that have been entered into for the sole or dominant
purpose of obtaining a tax benefit. The multinational anti-avoidance law,
however, has a lower threshold test. The new rules only require that the tax
benefit obtained was ‘one or more of the principal purposes'. Further it allows
foreign tax purposes to be included in that consideration.
This wider ambit may be problematic for some multinational
companies where the Australian supplies and any subsequent tax benefit obtained
only form a relatively small part of their global business, but will still be
caught under the new rules.
...
When determining the alternative postulate for the purposes
of the multinational anti-avoidance rules the ATO would be expected to consider
a notional Australian permanent establishment with which to compare the scheme
undertaken by the entity. Given the wide array of structures, options and
permutations of a large multinational entity, determining the right alternative
postulate may be an exceptionally challenging and potentially costly activity
for the ATO especially given the various contractual structures that are
regularly adopted by third parties that may be available to the multinational.[139]
Baker & McKenzie
Baker & McKenzie outlines the following issue which it
considers will create high compliance costs:
...whether a foreign tax is reduced (which includes deferring
foreign tax liability without "reasonable commercial grounds") is
also a specific factor that the Commissioner must have regard to in determining
whether there is the requisite "principal purpose" of obtaining an
Australian tax benefit, or obtaining an Australian tax benefit and reducing a
foreign tax liability.
Multinationals need to know how each member in the entity's
global accounting consolidated group is taxed in Australia and in any relevant
foreign jurisdictions, as these factors will be specifically relevant in
finding or disproving the "principal purpose" of tax avoidance.[140]
The amendments proposed in Schedule 2 are intended
to ensure that the profits derived by multinationals from their activities in
Australia are taxed in Australia. The Explanatory Memorandum states that the
proposed measures target those multinational entities that:
-
avoid tax in Australia by booking their revenue offshore even
though significant work is carried out in Australia in relation to the sales
from which that revenue is derived and
-
such arrangements are made with a principal purpose of avoiding
tax in Australia or reducing their foreign tax liability.[141]
The summary of the Regulation Impact Statement states that
the multinational anti-avoidance law proposed in the Bill is targeted at 30
large multinational companies and that up to 100 companies may need to review
their arrangements to make sure they comply with the new law.[142]
Proposed definitions
Item 1 of Schedule 2 amends subsections
177A(1) and (5) ITAA 1936. The amendments to subsection 177A(1) insert a
number of definitions into Part IVA of the ITAA 1936. New definitions to
Australian tax law include:
- ‘Australian customer’ of a foreign entity
- ‘Australian permanent establishment’
- ‘significant global entity’, defined in Item 2 of Schedule
1 and
- ‘global group’.
An ‘Australian customer’ of a foreign entity means an
entity who is in Australia or is an Australian entity and if the foreign entity
is a member of a global group–is not a member of that global group.
For these purposes an entity is defined in section 960-100
ITAA 1997 to be, amongst other things, any of the following:
-
an individual
-
a body corporate
-
a body politic
-
a partnership
-
any other unincorporated association or body of persons or
-
a trust.[143]
In turn, an Australian entity is defined in section 336 ITAA
1936 to be:
-
an Australian partnership
-
an Australian trust
-
an entity (other than a partnership or trust) that is a Part X
Australian resident.[144]
Thus an Australian customer of a foreign entity can be an
individual (for instance, a person buying computer equipment or software from a
foreign entity) or various other types of incorporated or unincorporated
bodies. This definition is important for the functioning of proposed section
177DA in Item 4 of Schedule 2 below.
Item 1, Schedule 2 also inserts a definition
of ‘Australian permanent establishment’ of an entity, which briefly, is defined
to mean:
-
where the country in which the relevant entity is resident has an
international tax agreement with Australia (often known as a Double Tax Agreement),
the meaning in that agreement[145]
or
-
if there is not tax agreement, a permanent establishment of a
person in Australia, where ‘permanent establishment’ is as defined at section 6
of the ITAA 1936.
The term ‘global group’ is defined to be a group of entities,
at least one of which is a foreign entity, which are consolidated together for
accounting purposes. As previously mentioned these definitions do not depend on
who actually owns the entity in question.
The definition of ‘supply’ for the purposes of Part IVA ITAA
1936 is taken from section 9-10 of the A New Tax System (Goods and
Services Tax) Act 1999, but is modified to exclude the supply of equity or
debt or an option on either of these two asset classes or a combination
thereof, for the purposes of this Part.[146]
That is, it refers to the supply of physical goods as well as services for the
purposes of Part IVA. But it does not include the supply of capital to an
entity in any shape or form.
The definitions of ‘foreign entity’ and ‘foreign law’
specifically applied to the operation of Part IVA by this item, are taken from
subsection 955-(1) ITAA 1997.
Amendments to subsection 177A(5) made by Item 2 of Schedule
2 make consequential changes to reflect that the anti-avoidance provisions
for ‘significant global entities’, in proposed section 177DA use a principal
purpose test and not the sole or dominant purpose test that
continues to be used in Part IVA generally.
Comments on Item 4 of Schedule 2 below
provide further details on this matter.
Consideration of effect of foreign
tax laws in assessing alternative postulate
The existing test for determining whether a tax benefit
has been derived due to a scheme entered into by the taxpayer is to ask whether
the benefit would have been derived without the scheme (the alternative
postulate). Existing subsections 177CB(2) to (4) ITAA 1936 are relevant
and provide that:
(2) A decision that a tax effect would have
occurred if the scheme had not been entered into or carried out must be based
on a postulate that comprises only the events or circumstances that actually
happened or existed (other than those that form part of the scheme).
(3) A decision that a tax effect might reasonably
be expected to have occurred if the scheme had not been entered into or carried
out must be based on a postulate that is a reasonable alternative to entering
into or carrying out the scheme.
(4) In determining for the purposes of
subsection (3) whether a postulate is such a reasonable alternative:
(a) have particular regard to:
(i) the substance of the scheme; and
(ii) any result or consequence for the taxpayer
that is or would be achieved by the scheme (other than a result in relation to
the operation of this Act); but
(b) disregard any result in relation to the
operation of this Act that would be achieved by the postulate for any person
(whether or not a party to the scheme).
Item 3 of Schedule 2 inserts proposed
subsection 177CB(5) after these provisions. The effect of the amendment is
that, when assessing whether there is an anti-avoidance scheme under new
section 177DA, all references to ‘the Act’ in subsection 177CB(4) should be
read as ‘the Act and any foreign law relating to taxation’.
The Explanatory Memorandum explains the amendments as
follows:
Subparagraph 177CB(4)(a)(ii) and paragraph 177CB(4)(b)
have the effect that certain tax liabilities are not to be taken into account
in assessing the likelihood or reasonableness of any alternative postulate.
These provisions are intended to make clear that alternative
postulates should not be rejected as unreasonable postulates on the grounds
that the tax costs involved in undertaking those postulates would have caused
the parties to either abandon or indefinitely defer the schemes and/or the
wider transactions of which they were a part. However, these provisions
currently only apply in relation to Australian income tax consequences.
The multinational anti-avoidance law is capable of capturing
schemes that have a purpose of reducing a foreign tax liability. Unlike the
general anti-avoidance rule purpose test in section 177D, the purpose test
under this measure can be satisfied by a purpose of both obtaining a tax
benefit and reducing one or more taxpayers’ liabilities to tax under a foreign
law.
As a consequence, this measure extends
subparagraph 177CB(4)(a)(ii) and paragraph 177CB(4)(b), for the purposes
of schemes captured under the multinational anti‑avoidance law, so that
results in relation to the operation of any foreign law relating to taxation
are also disregarded (and not just Australian income tax consequences). [147]
Multinational schemes
Item 4 of Schedule 2 inserts proposed
section 177DA ITAA 1936 entitled ‘Schemes that limit a taxable
presence in Australia’. Proposed section 177DA targets particular
schemes of multinationals that intend to achieve a tax benefit in Australia or
outside of Australia. The result of proposed section 177DA is that Part
IVA ITAA 1936 will apply in circumstances where a foreign entity[148]
makes a supply to an Australian customer and:
-
activities are undertaken in Australia directly connected to that
supply
-
some or all of those activities are undertaken at or through an
Australian permanent establishment of an entity who is an associate of, or is
commercial dependent on, the foreign entity
-
the foreign entity derives income from that supply
-
some or all of that income is not attributable to an Australian
permanent establishment of that foreign entity
-
a person or one of the persons who entered into or carried out a
scheme (or any part thereof) did so for the principal purpose of, or for
more than one principal purpose of, enabling the relevant
taxpayer, and any other taxpayer, to obtain a tax benefit or reduce a tax
liability under a foreign law in connection with the scheme and
-
the foreign entity is a ‘significant global entity’.
As already discussed, a principal purpose test sets a
lower threshold than a sole or dominant purpose test.
Proposed subsection 177DA(6) applies the whole of proposed
section 177DA to schemes both inside and outside Australia, or partly inside
and partly outside Australia.
The clear target of proposed section 177DA is
situations where a significant global entity makes a supply of non‑financial
goods and services (see the amended definition of ‘supply’ discussed above) to
an Australian customer (broadly defined), and
-
the resulting sales revenue does not pass through the Australian
arm of that significant global entity and
-
the Australian arm of that significant global entity provides
services in relation to that supply.
Significantly, proposed section 177DA cannot be
applied where a significant global entity sells goods and services to an
Australian customer, but otherwise has no presence in Australia and provides no
additional services in relation to that supply.
Administrative penalties
Item 5 of Schedule 2 inserts proposed
subparagraph 284-145(1)(b)(ia) into Schedule 1 of the TAA 1953. This
new provision applies the administrative penalty provisions of the TAA 1953
to assessments made under proposed section 177DA discussed above. It
does this by applying the ‘principal purpose’ test consequential upon the
changes described above.[149]
Item 6 of Schedule 2 amends paragraph
284-145(2A)(b) of Schedule 1 of the TAA 1953 so that a liability for an
administrative penalty still applies if the entity involved would have received
a benefit from the scheme and either:
-
subparagraph 284-145(1)(b)(i) TAA 1953 (the sole or dominant
purpose test for obtaining a tax benefit) or
- proposed subparagraph 284-145(1)(b)(ia) TAA 1953 (the
principal purpose test)
are not satisfied.
That is, if neither test is satisfied in relation to the
application of administrative penalties in particular (or for the purposes of
Part IVA ITAA 1936 in general), any administrative penalties calculated
under Subdivision 284-C Schedule 1 TAA 1953 apply.
Item 7 of Schedule 2 applies the changes in Schedule
2 on or after 1 January 2016, whether or not the scheme was entered into
before that date. Thus existing arrangements may be caught by the proposed
changes if they are not changed before 1 January 2016. As such Schedule 2
may have retrospective application. That is not unusual for amendments to tax
legislation.
Statement of Compatibility with
Human Rights
As required under Part 3 of the Human Rights (Parliamentary
Scrutiny) Act 2011 (Cth), the Government has assessed this Schedule’s
compatibility with the human rights and freedoms recognised or declared in the
international instruments listed in section 3 of that Act. The Government
considers that the Schedule is compatible.[150]
The Parliamentary Joint Committee on Human Rights
considers that the Bill does not raise human rights concerns.[151]
Schedule 3 amends the Taxation Administration Act
1953 (TAA 1953) to double the usual amount of administrative penalty
that may be incurred by a ‘significant global entity’ (see Item 2, Schedule
1) where they either obtain a ‘scheme benefit’ by reducing their tax
liability or increase the amount that is paid by the Commissioner for Taxation
to them.
The Explanatory Memorandum notes that the maximum penalty
is usually 50 per cent of the amount of tax avoided under a scheme, but can be
as higher as 60 per cent where aggravating factors apply.[152]
A lower penalty applies if the taxpayer has a reasonably arguable position with
regard to its tax arrangements.[153]
The Commissioner has the power to reduce the amount of the
administrative penalty but is not compelled to do so. The Explanatory Memorandum
observes:
The Commissioner of Taxation has broad discretion to remit an
administrative penalty in whole or in part so that penalties are not often
imposed at the rate provided for in the Taxation Administration Act.
This discretion would remain.[154]
History
Context of the Schedule
As already noted, from April 2015, the United Kingdom
introduced the Diverted Profits Tax, otherwise known as the ‘Google tax’.[155]
This tax seeks to deter entities operating in the UK from diverting profits from
that jurisdiction. Where a taxable diverted profit is identified the tax levied
is between 25 and 55 per cent of that amount.[156]
The entity is still liable for the ordinary company income tax on the diverted
profit.
In relation to the ‘Google tax’, the Treasurer stated that
‘[a]fter consultation with the United Kingdom it is clear that Australia does
not need to replicate the UK’s ‘Diverted Profits Tax’.[157]
The Treasurer stated that:
Our penalties for diverted profits will go further than the
United Kingdom.
The Tax Commissioner will have the power to recover unpaid
taxes and issue a fine of an additional 100% of unpaid taxes plus interest.[158]
The Assistant Treasurer noted that the increased penalties
were aimed at deterrence:
The government will double penalties for profit shifting and
tax avoidance where the company does not have a reasonably argued position.
Currently the sanction is the tax owed plus a penalty of 50 per cent. That now
increases to 100 per cent.
In judging whether a multinational has a reasonably arguable
position about a related party transaction, attention will be given to factors
like whether the transaction is at a genuine arms-length price and were
appropriate processes followed?[159]
The imposition of tax avoidance penalties was not part of
the BEPS project.[160]
Position of major interest groups
Reactions to Exposure Draft
Deloitte
Deloitte noted that the penalties in the Exposure Draft
applied to a scheme entered prior to 1 July 2015, and in respect of ‘any scheme
benefit that an entity gets on or after 1 July 2015’.[161]
Deloitte stated that ‘[i]t is not clear when an entity “gets” a tax benefit –
eg, date of entry into scheme, lodgement of tax return, issue of amended
assessment, or some other date.’[162]
The Tax Justice Network Australia
and Publish What You Pay Australia
The Tax Justice Network Australia and Publish What You Pay
Australia were supportive of the increased administrative penalties, and stated
that ‘[t]he organisations would prefer if the increased penalties applied to
the large company threshold of businesses with global revenue of $250 million
and more, rather than a global revenue of $1 billion.’[163]
Reactions to the Bill
DLA Piper notes that:
The increased penalties apply for the entire scope of
application of Part IVA capturing both the multinational anti‑avoidance
rules as well as the existing general anti-avoidance rules. In some instances
(where there are aggravating factors), the penalty applied can be up to 120%.
As a result of the definition of significant global entities, this means that
Australian entities that are part of large multinational groups are now subject
to increased penalties where any component of Part IVA applies.
Given the wide definition of significant global entity, many
companies with separate and distinct Australian businesses from their global
parents may fall under the new penalty regime.[164]
Key issues and provisions
Item 1 of Schedule 3 inserts proposed
subsection 284-155(3) into Schedule 1 TAA 1953. Subsections
284-155(1) and (2) in Schedule 1 TAA 1953 specify how the above
mentioned administrative penalty is calculated. Proposed subsection 284-155(3)
requires that where a ‘significant global entity’ (as defined in Schedule 1)
incurs a scheme shortfall, the amount of the penalty is twice that worked out
under existing subsections 284-155(1) and (2) in Schedule 1 TAA 1953.[165]
If the taxpayer’s position is a reasonably arguable position
the penalty is not doubled (proposed subsection 284-155(3)).
What is a reasonably argued
position?
Subsection 284-15(1) in Schedule 1 TAA 1953 provides that
a taxpayer’s position is reasonably arguable ‘if it would be concluded in the
circumstances, having regard to relevant authorities, that what is argued for
is about as likely to be correct as incorrect, or is more likely to be correct
than incorrect’.[166]
A reasonably arguable position in relation to transfer
pricing issues is specified in subdivision 284-E Schedule 1 TAA 1953 and
centres around the quality and the coverage of the related transfer pricing
arrangement documentation. Subdivision 284-E Schedule 1 TAA 1953 states that
undocumented transfer pricing arrangements are not reasonably arguable and
specifies what matters are required to be covered in the documentation to have
a reasonably arguably position.[167]
Item 2 of Schedule 3 applies the changes in Schedule
3 from 1 July 2015, irrespective of the date on which a scheme commences. Schedule
3 is retrospective as it proposes to apply to schemes that commenced before
the Bill is passed. Retrospective tax legislation is not unusual.
The new penalty rates
The following table outlines the new penalties that are
proposed to apply to ‘significant global entities’ that enter into tax
avoidance or profit-shifting schemes. Penalties are expressed as percentages of
the relevant scheme shortfall amount:[168]
Table 3 Penalties proposed by Schedule 3 of the Bill for
Significant Global Entities
Culpable behaviour
|
Base penalty
amount %
|
Aggravating
factors apply %
|
Disclosure during
examination %
|
Disclosure before
examination %
|
Tax avoidance schemes[169]
|
100
|
120
|
80
|
20
|
[if position is reasonably argued]
|
[25]
|
[30]
|
[20]
|
[5]
|
Profit-shifting schemes
|
50
|
60
|
40
|
10
|
[if position is reasonably argued]
|
[10]
|
[12]
|
[8]
|
[2]
|
Source: Explanatory
Memorandum, Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill
2015, op. cit., p. 56.
The Explanatory Memorandum does not further define what
‘aggravating factors’ may be. Such factors could include a deliberate attempt
to conceal the scheme entered into. The above table shows that there is an
incentive for revealing these schemes before or during an examination of the
entity’s affairs by the ATO.
Statement of Compatibility with
Human Rights
As required under Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed this
Schedule’s compatibility with the human rights and freedoms recognised or
declared in the international instruments listed in section 3 of that Act. The
Government considers that this Schedule is compatible.[170]
The Parliamentary Joint Committee on Human Rights considers
that the Bill does not raise human rights concerns.[171]
Current law
Reasonably arguable position in
relation to application transfer pricing laws
As previously discussed in relation to Schedule 3 of the
Bill, there are documentation requirements in Subdivision 284-E Schedule 1 TAA
1953 which, if met, affect whether an entity has a ‘reasonably arguable’
position about whether the transfer pricing provisions in subdivisions 815-B
and 815-C ITAA 1997 apply to the entity or not.[172]
The requirements for these records are:
-
that they be prepared before the income tax return was lodged
-
that they be in English or easily translated into English
-
that they explain how the transfer pricing provisions do or do
not apply, and explain how this conclusion best achieves the consistency
requirement
-
that they allow the arm’s length conditions to be readily
ascertained
-
that they identify the method used and comparable circumstances
that are relevant to the arm’s length conditions
-
that they outline the actual conditions relevant to the transfer
pricing matter(s)
-
that they show the actual profits and arm’s length profits and
-
that they show the actual expenditure and income of the entity
and its permanent establishment.[173]
As already noted, a matter is reasonably arguable where it
is concluded that it is roughly as likely, or more likely, to be correct than
it is to be incorrect.[174]
If an entity is successful in claiming a reasonably arguable position, its
administrative liability may be lessened or administrative liability may not be
attracted.
International dealings schedule
(IDS)
The IDS forms part of an entity’s financial year income
tax return if it has engaged in international transactions or relationships.[175]
Generally, entities are required to submit the IDS if:
-
the aggregate amount of an entity’s transactions or dealing with
international related parties is greater than $2 million[176]
- an
entity has an overseas branch or
-
an entity has a direct or indirect interest in a foreign trust,
foreign company, controlled foreign entity, transferor trust, foreign
investment fund or foreign life policy.[177]
The IDS requires detailed information on international
related party transactions and the transfer pricing method applied to each
transaction, as well as the level of transfer pricing documentation held for
international transactions or dealings.[178]
History
Context of the Schedule
The Assistant Treasurer noted that the purpose of the
transfer pricing documentation measures is to facilitate detection:
...the ATO will use this information to assess the risk to
revenue of a global group with a multi-billion dollar turnover which may
disclose 50 per cent of its profits being earned in a tax haven where they have
an office with just a few employees.[179]
Schedule 4 of the Bill implements the OECD’s
measures relating to transfer pricing documentation and country‑by-country
reporting. These measures are part of the BEPS plan which is an initiative of
the OECD, endorsed by the G20.
BEPS Plan
The BEPS plan aims to develop policy options that address
multinational corporate tax avoidance.[180]
The OECD says ‘BEPS refers to tax planning strategies that exploit gaps and
mismatches in tax rules to artificially shift profits to low or no-tax
locations where there is little or no economic activity, resulting in little or
no overall corporate tax being paid.’[181]
Schedule 4 of the Bill proposes to implement BEPS
action item 13, which aims to re-examine transfer pricing documentation rules to
develop new rules that enhance transparency for tax administration.[182]
The Guidance on Transfer Pricing Documentation and Country-by-Country
Reporting is the deliverable of action item 13 and was delivered in
September 2014.[183]
The guidance recommends a three‑tiered approach to transfer pricing
documentation, made up of:
- a master file which provides an overview of the
multinational enterprise group as a whole, including ‘the nature of its global
business operations, its overall transfer pricing policies, and its global
allocation of income and economic activity’. Lists of important agreements,
intangibles and transactions’ are also recommended[184]
- a local file that provides ‘more detailed information
relating to specific intercompany transactions’ such as ‘financial information
regarding those specific transactions, a comparability analysis, and the
selection and application of the most appropriate transfer pricing method’[185]
and
- a Country-by-Country report which is made up of
information relating to the allocation of income and taxes paid globally. The
report is also recommended to include a ‘listing of all the Constituent
Entities for which financial information is reported, including the tax
jurisdiction of incorporation’ and the main business activities carried out by
listed constituent entities.[186]
Position of major interest groups
Reactions to exposure draft
Australian Bankers’ Association
The Australian Bankers’ Association (ABA) was of the view
that the information outlined in the Explanatory Memorandum to the exposure
draft ‘is likely to be in excess of or different to information required to
meet the OECD transfer pricing documentation standards’.[187]
That Explanatory Memorandum noted that ‘[t]he approved form may require
information to be provided that is relevant to the Commissioner making a
decision under Division 815 of the ITAA 1997 as to whether an entity has
received a transfer pricing benefit.’[188]
The ABA notes the overlap between the exposure draft and
existing documentation requirement for having a reasonably arguable position
for transfer pricing matters. The ABA recommended that the documentation should
‘enable taxpayers to use the local file as support for reasonably arguable
positions’.[189]
It was also stated that there was overlap with the international dealings
schedule (IDS) required of taxpayers with international related party deals of
over $2 million, and recommended that taxpayers required to produce documents
under the Exposure Draft should be exempted from lodging an IDS.
Association of Superannuation Funds
of Australia
The Association of Superannuation Funds of Australia
(ASFA) was supportive of the Exposure Draft’s objectives.[190]
The ASFA raised concern that the documentation obligations could apply to
Australian superannuation entities and submitted that such entities should be
excluded from the application of the documentation requirements as they are
‘low risk’ taxpayers and do not have the capacity to shift profits between
jurisdictions.[191]
Chartered Accountants Australia and
New Zealand
Chartered Accountants Australia and New Zealand also
supported the introduction of the transfer pricing documentation requirements.[192]
Chartered Accountants Australia and New Zealand identified implementation of
the Exposure Draft’s proposed measures as the major challenge, noting that it
will be crucial ‘that the ATO develops strong, clear and practical guidance
before the CbC [Country-by-Country] reporting regime commences on 1 January
2016.’[193]
It also noted possible duplication with IDS requirements and documentation
requirements for having a reasonably arguable position.[194]
Deloitte
Deloitte was of the view that the documentation
requirements would be particularly onerous where an Australian entity’s foreign
parent was not required to file a Country-by-Country report in its jurisdiction
of incorporation.[195]
Deloitte suggested an exemption for taxpayers in this situation.[196]
Reactions to the Bill
Minter Ellison
Minter Ellison is of the view that the documentation
requirements will have potentially high compliance costs:
The proposal also represents a potentially compliance cost
intensive process for taxpayers. It seems that the Government is assuming that
similar proposals will be adopted in other countries to reduce global
compliance costs for taxpayers – that remains to be seen.[197]
However it is likely the BEPS recommendations will be
implemented in a number of countries meaning that a master file and country-by-country
report will only need to be prepared once for all the countries. Where the country-by-country
report and/or the master file is provided to a revenue authority outside
Australia, this can be submitted to the ATO provided that each country implements
the BEPS as recommended by the OECD and G20. A separate local file will need to
be prepared for each country.
Key issues and provisions
Item 1 of Schedule 4 of the Bill will amend
the ITAA 1997 to insert proposed Subdivision 815-E – Reporting obligations
for significant global entities.[198]
The Subdivision requires particular entities to provide transfer pricing
documentation to the Commissioner of Taxation.
Under proposed subsection 815-355(1) the
documentation requirements under Schedule 4 apply to significant global
entities, as defined in Schedule 1, who are any of the following:
- an
Australian resident
- a
resident trust estate
- a
partnership with at least one partner who is an Australia resident
- a
foreign resident operating an Australian permanent establishment
- a
non-resident trust estate operating an Australian permanent establishment or
- a
partnership operating as a Australian permanent resident.
Such entities will be required under proposed
subsection 815-355(3) to provide three statements to the ATO pertaining to:
-
the entity’s, or if part of a group, the group’s, global
operations and activities as well as transfer pricing policies
-
the entity’s operations, activities, dealings and transactions
and
-
how income, activities and taxes paid are allocated by the entity
and members of the entity’s group if it is part of a group.
The note following proposed subsection
815-355(3) indicates that these statements correspond to the three‑tiered
transfer pricing documentation recommended by BEPS. Item 2 of Schedule 4
provides that these statements will be required for income years after 1
January 2016.
Proposed section 815-365 provides for the
Commissioner of Taxation to determine that particular entities are not required
to give statements under proposed section 815-355.
Definitions
The term ‘permanent establishment’ is defined in
subsection 6(1) ITAA 1936. The ATO summarises this definition as
including:
- business operations carried on by an Australian resident
entity at or through a fixed place of business in another country
- business operations carried on by a foreign resident entity
at or through a fixed place of business in Australia.[199]
The ATO also states that trusts, other than unit trusts,
are considered Australian residents if:
- a trustee of the trust estate was a resident at any time
during the income year
- the central management and control of the trust estate was
in Australia at any time during the income year.[200]
Overlap with existing requirements
While there is overlap between Schedule 4 and the
documentation requirement in Subdivision 284-E Schedule 1 TAA 1953 for a
taxpayer to have a reasonably arguable position regarding the transfer pricing
provisions, the proposed measures are separate requirements.
Proposed subsection 815-355(3) ITAA 1997
requires greater detail about overall transfer pricing policies of a taxpayer than
the existing measures in Subdivision 284-E Schedule 1 TAA 1953 which require
specific information regarding whether the transfer pricing provisions apply to
particular transfer pricing matter(s).
Interaction with existing measures
Statements made under Schedule 4 are required to be
in the approved form. The requirements of an approved form are detailed in
subsection 388-50(1) Schedule 1 TAA 1953. The ATO summarises these
requirements to be:
- it is in the form approved in writing by the Commissioner
for that kind of document
- it contains a declaration signed by a person or persons as
the form requires
- it contains the information that the form requires, and any
further information, statement or document as the Commissioner requires,
whether in the document or otherwise, and
- if it is to be given to the Commissioner, it must be given
in the manner that the Commissioner requires.[201]
Under proposed subsection 815-355(2) the statements
must be given to the Commissioner of Taxation within 12 months after the end of
the period the statement relates to. However the ATO will have discretion under
section 388-55 Schedule 1 TAA 1953 to defer the time within which the
statements are due. Further, proposed section 815-360 allows the ATO to
determine that the statements under proposed section 815-355 are required
for a specific 12-month period rather than an income year.
Schedule 4 will be subject to the existing penalties
in subdivision 286-C Schedule 1 TAA 1953.[202]
Under section 286-75 TAA 1953, a penalty may be imposed on
taxpayers required to give a document to the Commissioner of Taxation by a
particular day where they failed to do so. The base penalty amount is one penalty
unit per 28 day period from the day that the document was due, for up to five
periods.[203]
The base penalty may be increased by up to five times if particular
circumstances outlined in section 286-80 Schedule 1 TAA 1953 are met.
Statement of Compatibility with
Human Rights
As required under Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed this
Schedule’s compatibility with the human rights and freedoms recognised or
declared in the international instruments listed in section 3 of that Act. The
Government considers that this Schedule is compatible.[204]
The Parliamentary Joint Committee on Human Rights
considers that the Bill does not raise human rights concerns.[205]
The proposed measures in this Bill are just one part of
the Government’s overall response to problems in collecting the right amount of
tax from multinational entities. Further government action in this area can be
expected.[206]
Members, Senators and Parliamentary staff can obtain further
information from the Parliamentary Library on (02) 6277 2500.
[1]. See
for example J Mather, J Hutchinson and N Khadem, ‘Backlash
over Apple’s low taxes’, Australian Financial Review, 7 March 2014,
pp. 1, 7; J Dagge, ‘Google
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November 2015.
[2]. United
Voice and the Tax Justice Network, Who
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[3]. Ibid.,
pp. 3, 21.
[4]. See
for example H Aston and N Khadem, ‘Hockey
in talks with Britain over planned ‘Google Tax’’, Sydney Morning Herald,
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[5]. See
for example N Khadem, ‘Profit-shifting
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[6]. Organisation
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[7]. N
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[8]. S
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[9]. N
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[10]. Ibid.
[11]. The
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[12]. Ibid.
[13]. D
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[14]. D
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[17]. Ibid.,
pp. 33-35.
[18]. Tax Laws Amendment
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[19]. Tax Laws Amendment
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[21]. Ibid.,
p. 4.
[22]. OECD,
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[23]. Ibid.,
pp. 6–7.
[24]. D
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[25]. OECD,
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[33]. Ibid.,
pp. viii–x.
[34]. Australian
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[35]. Ibid.,
p. 15.
[36]. Ibid.,
p. 16.
[37]. Ibid.,
pp. 14–16.
[38]. Australian
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[39]. Australian
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[40]. Treasury,
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[42]. A
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[49]. A
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[50]. Australia,
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[53]. Australian
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[54]. Ibid.,
p. 2.
[55]. Senate
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[56]. Ibid.,
p. 38.
[57]. Ibid.,
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[58]. Senate
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[64]. M
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[66]. J
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[67]. J
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[68]. ShineWing
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[70]. ShineWing
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[71]. DLA
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[72]. Explanatory
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[73]. DLA
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[74]. Corporations Act 2001 (Cth), section 9, accessed
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[76]. Explanatory
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[77]. The
Statement of Compatibility with Human Rights for this Schedule can be found at
page 22 of the Explanatory
Memorandum to the Bill.
[78]. Parliamentary
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[79]. Income Tax Assessment
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[80]. C
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[81]. Income Tax Assessment
Act 1936 (Cth), subsection 177A(1) definition of ‘scheme’ and section
177D.
[82]. Ibid.,
sections 177C and 177CB, subsection 177D(3).
[83]. Ibid.,
subsection 177D(4).
[84]. Ibid.,
subsection 177D(5).
[85]. Ibid.,
subsection 177A(5), 177D(1).
[86]. J
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[88]. Ibid.
[89]. Ibid.,
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[90]. Ibid.,
section 177CB.
[91]. Ibid.,
subsection 177CB(2).
[92]. Ibid.,
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[93]. Ibid.,
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[94]. Ibid.,
section 177E.
[95]. Ibid.,
section 177EA.
[96]. Ibid.,
section 177EB.
[97]. Ibid.,
section 177F.
[98]. Ibid.,
paragraph 177F(3)(a)
[99]. Ibid.,
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[100]. Ibid.,
paragraphs 177F(1)(d) and 177F(3)(d).
[101]. For
all the determinations that can be made by the Commissioner of Taxation, see
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[102]. G
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[103]. Ibid.
[104]. G
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[108]. Ibid.,
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[109]. DPL,
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[111]. Taxation Laws Amendment
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[112]. Taxation Laws Amendment
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[113]. Taxation Laws Amendment
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[114]. Tax and Superannuation
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[115]. Tax Laws Amendment
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[120]. OECD,
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[121]. Ibid.,
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[122]. Ibid.,
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[123]. The
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[124]. Ibid.
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[126]. Ibid.,
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[127]. Ibid.
[128]. Ernst
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[129]. Ibid.
[130]. Law
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[131]. Ibid.,
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[133]. Ibid.,
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[137]. D
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[139]. Ibid.,
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[142]. Ibid.,
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[145]. The
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[159]. J
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[170]. The
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[172]. See
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[174]. Ibid., subsection
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[175]. ATO,
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[178]. ATO,
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[179]. J
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[180]. OECD,
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[182]. OECD,
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[185]. Ibid.,
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[186]. Ibid.
[187]. ABA,
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[188]. Ibid.,
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[189]. Ibid.,
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[190]. ASFA,
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[191]. Ibid.,
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[193]. Ibid.,
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[194]. Ibid.,
p. 5.
[195]. Deloitte,
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[196]. Ibid.
[197]. J
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[198]. Income Tax Assessment
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[199]. ATO,
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[200]. ATO,
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[202]. Taxation Administration
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[203]. Ibid.,
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[204]. The
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[205]. Parliamentary
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