Australia targets tax avoidance with new tax

THE ROYAL GAZETTE (BERMUDA)
Raymond Hainey
10 May 2016

Australia is to hit multinational giants with a new diverted profits tax to crack down on tax avoidance using jurisdictions like Bermuda.

The new tax — to be introduced next year — will slap big companies with a 40 per cent tax on profits shifted offshore.

A spokeswoman for the Australian Tax Office said the new tax would give government “greater powers to deal with multinationals who transfer profits, assets or risks to offshore-related parties using artificial or contrived arrangements to avoid Australian tax and who do not co-operate with the ATO”.

The new tax will affect firms who move money abroad with the result that less than 80 per cent tax is paid than would otherwise have been paid in Australia.

The move follows an Australian Senate committee hearing into the tax affairs of large companies last year.

Major oil producer Chevron came under fire after the committee heard that the firm had 200 companies registered in Bermuda and a further 200 registered in the low-tax US state Delaware.

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