Amendments to the Exposure Draft regarding Multinational Tax Avoidance

“Isn't it just at the Exposure Draft stage? It's not law yet. I'll worry about it later."

This is a common statement in practice. We live and breathe Exposure Draft legislation, so that you don't have to.

Last week, we lodged a submission to Treasury on a recent Exposure Draft titled Tax Laws Amendment (Tax Integrity Multinational Anti-avoidance Law) Bill 2015: Country by country reporting. This is the latest chapter in Australia's approach to Base Erosion and Profit Shifting but it is interesting for another reason as well.

If the heading of this particular Exposure Draft is excluded (which it would be, if inserted into the tax legislation), a reader would not know what the law is about on the face of the provisions.

It essentially stipulates that an entity above a specified threshold must give a statement to the Commissioner unless the Commissioner says the section does not apply to them. There is no substance in the Exposure Draft as to the content of the statement, or when the Commissioner should exclude an entity. It is extremely uncertain and gives the Commissioner an unprecedented and unacceptable level of discretion.

We have strongly recommended that significant amendments should be made to this Exposure Draft before it ever finds its way onto your desk.

Thilini Wickramasuriya FTI is a Tax Counsel of The Tax Institute.

The Tax Institute is Australia’s leading professional association in tax. Its 13,000 members include tax agents, accountants and lawyers as well as tax practitioners in corporations, government and academia.


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