Budget 2015: International tax
May 2015
As expected, multinationals are in the firing line whilst working holidaymakers and FIFO workers can expect some changes.
While the Government has decided to apply GST to all digital downloads by customers in Australia, the so-called "Google Tax" will not go ahead.
The Google Tax had been touted to emulate the UK-style diverted profits tax or any other additional tax structures to prevent the so called "Double Irish Dutch Sandwich" arrangements to prevent multinationals from moving profits to low taxing environments.
- The activities of an Australian company or other entity are integral to an Australian customer's decision to enter into a contract;
- The contract is formally entered into with a foreign related party to that entity; and
- The profit from the Australian sales is booked overseas and subject to no or low global tax.
The measures apply only to large multinationals that meet the specific thresholds.
The Tax Commissioner will have the power to recover unpaid taxes and issue a fine or "compensating adjustment" of an additional 100% of unpaid taxes plus interest.
Transfer pricing documentation for large multinationals
Date of effect: 1 January 2016
- Country-by-Country Report showing information on the global activities of the multinational, including the location of its income and taxes paid;
- A master file containing an overview of the multinational's global business, its organisational structure and its transfer pricing policies; and
- A local file that provides detailed information about the local taxpayer's intercompany transactions.
Working holiday makers lose tax-free threshold
Date of effect: 1 July 2016
Foreigners who are on working holiday visas will now pay tax from the first dollar they earn, as the Budget. Currently a working holiday maker can be treated as resident for tax purposes if they have been in Australia for more than six months.
For some regions in Australia who rely on transient staff for some of their farm or other seasonal work, the move are concerns about how this will affect their ability to attract and retain seasonal workers. However the measure comes as concerns have been raised by the ABC's Four Corners program that many workers were being exploited.
Higher Education Loan recovery from overseas debtors
Date of effect: 1 July 2017
Investment review fees & penalties introduced
Date of effect: 1 July 2017
More from the 2015 Budget:
- The "Have a Go" Budget
- Small Business Package
- Business in General
- Superannuation & Pensions
- Families & Individuals
- Tax Compliance
- Economy in Brief
Follow Bates Cosgrave on Linkedin, Facebook or Twitter
Disclaimer
This article is provided for information purposes only and correct at the time of publication. It should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.
Share this
|
Get Small Business News each month