The Turnbull Government has secured the passage of the Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill, a critical piece of legislation, which will ensure major international companies operating in Australia but booking profits offshore have to pay tax in Australia, on 3 December 2015.

The Australian Government is committed to ensuring companies that earn income in Australia and benefit from the Australian economy pay their fair share of tax in Australia. Under this new law, companies caught cheating will have to pay back double what they owe, plus interest.

The Government’s measures attack the heart of the multinational tax avoidance problem, whilst ensuring Australia remains an attractive and competitive place to do business.

The law will cover all multinationals operating in Australia with global revenues above $1 billion. These 1,000 companies will need to consider the new rules if they have economic activities in Australia but book their Australian sales revenue offshore.

The laws also implement the OECD’s Country-by-Country reporting regime and new transfer pricing documentation standards, giving the Australian Tax Office (ATO) a better picture of how these multinationals companies internally operate.

This package of measures has been developed through an extensive feedback and consultation process undertaken by Treasury and as a result of having ATO officials working within key multinationals operating in Australia. The ATO now has additional detailed information of how many of these companies structure their tax affairs to avoid paying their fair share.